Starbucks suspends 2025 guidance as comparable store sales decline by 7%

GLOBAL – Multinational coffeehouse chain and roastery Starbucks has suspended its forecast for the 2025 financial year after its global comparable store sales declined by 7% in the last quarter of the 2023/2024 financial year.

The newly appointed CEO, Brian Niccol, has emphasized the need for significant changes in the company’s strategy to facilitate a return to growth.

Starbucks has released preliminary financial results for its 13-week fiscal fourth quarter and the 52-week fiscal year ending September 29, 2024.

In the reported quarter, consolidated net revenue was reported at US$9.1 billion, reflecting a 3% decline.

However, for the entire fiscal year, consolidated net revenues increased by 1%, reaching US$36.2 billion. The company’s earnings per share, based on generally accepted accounting principles, were US$0.80, which marks a 25% decrease compared to the previous year.

Global comparable store sales dropped by 7% in the reported quarter and fell by 2% for the full fiscal year 2024.

The decline in performance was particularly notable in North America, where U.S. comparable store sales decreased by 6%, largely due to a 10% reduction in transactions, though this was somewhat mitigated by a 4% rise in average ticket size.

In China, comparable store sales saw a 14% decline, driven by an 8% decrease in average ticket size and a 6% drop in transactions. This downturn was further impacted by intensified competition and a sluggish macroeconomic climate that has affected consumer spending.

In light of the recent transition in leadership and current business conditions, Starbucks has decided to suspend its guidance for the entire fiscal year 2025.

Niccol stated, “Our fourth quarter performance makes it clear that we need to fundamentally change our strategy so we can get back to growth and that’s exactly what we are doing with our Back to Starbucks plan.”

“We need to focus on what has always set us apart — a welcoming coffeehouse where people gather and where we serve the finest coffee, handcrafted by our skilled baristas. We are energized and the team is already moving quickly.”

Starbucks is dedicated to enhancing shareholder value through a strategic reset, and the company’s board of directors has approved an increase in the quarterly cash dividend from US$0.57 to US$0.61 per share of outstanding common stock.

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