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Starbucks reported strong sales and better-than-expected profits in the US last quarter, indicating that its transformation plan is taking effect. However, the company’s share price declined after hours due to sluggish international markets and a conservative forecast for the full year.
starbucks (Starbucks) U.S. sales grew faster than expected last quarter, suggesting the transformation plan is boosting U.S. revenue. However, sales in international markets were disappointing last quarter, and full-year revenue forecasts were also below expectations.wall Street It is estimated that the stock price will fall by about 1.8% after the market opens.
Starbucks’ net profit in the fourth quarter (last quarter) of the year ended at the end of September more than quadrupled year-on-year to US$677.2 million, and adjusted earnings per share were US$0.8, better than analysts expected.
Last quarter, global same-store sales increased by 7.2%, which was also better than expected, mainly because the average customer value and transaction volume increased together. Most of the growth came from North America, with same-store sales increasing 7.7% in the U.S. market alone, showing that the “Return to Starbucks” transformation plan led by CEO Brian Niccol is making progress.
Nico said the results gave him confidence that performance would continue to improve. He has repeatedly said that the “return to Starbucks” strategy is no longer a plan to reverse the decline, but a growth plan. “The power is coming out of the foundation.” “I can’t emphasize this enough.” The company will be able to achieve the target of annual revenue growth of at least 5% in 2028.
However, Starbucks’ total revenue fell 4% year-over-year last quarter, and same-store sales in international markets increased only 0.9% year-over-year, both of which were lower than expected. This mainly reflects the impact of Starbucks converting its mainland Chinese stores to a licensed joint venture business model.
Starbucks’ next challenge will be maintaining its growth momentum. Starbucks expects total revenue to decline about 1% this year, and same-store sales in North America are expected to grow about 4%, indicating a slowing in the market after growing at 7% for three consecutive quarters.
Starbucks announced in September that it would close about 1% of its North American stores, or about 250 stores. A decline in the number of North American stores is expected to weigh on its revenue outlook.
Nico said there will be a focus on technology and monetization next year, such as using AI systems to speed up the processing of delivery orders, and systems that can recognize customers when they enter a store, provide personalized digital menus, and improve the ease of payment.
Analysts believe that Starbucks’ sales growth in the US market last quarter was encouraging, but the outlook is weak, perhaps because it wants to lower market expectations, and warned that Starbucks is constantly losing young consumers to competitors such as 7 Brew.
Summary FAQ
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Last quarter, U.S. same-store sales increased 7.7% year-over-year, which was better than market expectations and primarily driven by simultaneous increases in unit value and transaction volume. This suggests that the “return to Starbucks” plan promoted by CEO Brian Niccol has begun to boost local revenues.
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Starbucks’ net profit last quarter more than quadrupled year-on-year to US$677.2 million, and adjusted earnings of US$0.8 per share were better than expected. However, total revenue still declined 4% year-on-year, reflecting pressure on overall performance from adjustments in international markets and stores.
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Because Starbucks estimates total revenue will decline by about 1% this year, less than Wall Street expected, and due to the shrinking of North American stores and the impact of China’s sub-licensing model on international sales, investors are worried about the slowing pace of growth, and the stock price fell about 1.8% after the bell.
