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Starbucks reported a fourth straight drop in same-store sales for its latest quarter, but the decline was less severe than expected as the world’s largest coffee chain attempts a turnaround.
Global comparable sales fell by 4 per cent in the quarter that ended in December — less than the 5 per cent decrease expected by analysts polled by Visible Alpha. Net revenue was roughly even from a year before at $9.4bn, beating Wall Street estimates of $9.3bn. Net income fell 24 per cent year on year to $781mn, above estimates of $774mn.
The Seattle-based company’s more than 40,000 stores have drawn fewer customers over the past year, including in its largest markets of the US and China.
Brian Niccol came aboard as chief executive in September and introduced a turnaround plan he named “Back to Starbucks”, evoking nostalgia for the company’s past and reflecting an imperative to revive foot traffic in its cafés.
Niccol has initiated changes at headquarters and in stores. Earlier this month he announced imminent job cuts for some of the thousands of people who work in Starbucks support jobs.
On Tuesday he said that two senior executives, Sara Trilling and Arthur Valdez, would be leaving the company. Mike Grams and Meredith Sandland, both of whom worked under Niccol when he was CEO of Yum Brands’ Taco Bell restaurant chain, will join Starbucks.
Grams will hold the title of North America chief stores officer, overseeing “store performance and everything that happens in them” and the more than 200,000 people inside the region’s company-operated cafés. He was most recently global chief operating officer of Taco Bell.
Sandland will become chief store development officer, in charge of designing and building stores. She has since 2022 served as chief executive of restaurant delivery company Empower Delivery and previously was chief development officer at Taco Bell.
The top store executives were hired a day after Starbucks modified offerings inside stores, bringing back condiment bars stocked with milk, cream and sugar, and ceramic mugs with free coffee refills.
Starbucks also imposed a new code of conduct at stores, requiring visitors to purchase something if they want to sit at a table or use the restroom. The code reversed a policy enacted in 2018 that declared anyone who crossed the threshold as a customer.
Niccol has set out longer-term aims, including delivering store-placed orders within four minutes and separating them from orders flowing in from the Starbucks app. Combining the two has led to customer complaints over long wait times.
