Starbucks posts first same-store sales gain in nearly two years
Starbucks Corp. ended its fiscal year with mixed results but a positive sign, reporting its first same-store sales increase in seven quarters.
“We’re a year into our ‘Back to Starbucks’ strategy, and it’s clear that our turnaround is taking hold,” CEO Brian Niccol stated in the earning release. “Our return to global comp growth and the momentum we’re building give me confidence we’re on the right path to deliver the very best of Starbucks for our customers, partners and shareholders.”
During the quarter, the company closed 627 locations (mostly in North America) and laid off roughly 900 non-retail employees as part of a $1 billion restructuring plan it announced in September. The plan is part of its “Back to Starbucks” turnaround strategy which also improving its in-store customer experience.
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Starbucks reported net income of $133.1 million, or $0.12 per share, for the quarter ended Sept. 28, down from $909.3 million, or $0.80 per share, in the year-ago period. Excluding restructuring costs, litigation settlements and other items, Starbucks earned $0.52 per share, missing analysts’ estimates of $0.56 per share.
Fourth Quarter
Starbucks reported net income of $133.1 million, or $0.12 per share, for the quarter ended Sept. 28, down from $909.3 million, or $0.80 per share, in the year-ago period. Excluding restructuring costs, litigation settlements and other items, Starbucks earned $0.52 per share, missing analysts’ estimates of $0.56 per share.
In addition to the restructuring plan, Starbucks has been investing heavily in labor, including piloting an assistant store manager position in select U.S. stores.
Net sales rose 5% to $9.57 billion, topping estimates of $9.35. Net revenues for the North America segment increased 3% to $6.9 billion.
Same-store sales increased 1%, lifted by global markets. North America and U.S. same-store sales were flat, driven by a 1% increase in average ticket which was offset by a 1% decline in comparable transactions. But U.S. comp sales turned positive in September, and the momentum has held through October, Niccol told analysts on the company’s earnings call.
“We’re a year into our ‘Back to Starbucks’ strategy, and it’s clear that our turnaround is taking hold,” Niccol stated in the earnings release. “Our return to global comp growth and the momentum we’re building give me confidence we’re on the right path to deliver the very best of Starbucks for our customers, partners and shareholders.”
Analysts were expecting global same-store sales declines of 0.3% and a 0.9% decrease in U.S. same-store sales.
International comparable store sales increased 3%, driven by a 6% increase in comparable transactions, partially offset by a 3% decline in average ticket. In China, Starbucks’ biggest market outside of the U.S. comparable store sales increased 2%, driven by a 9% increase in comparable transactions, partially offset by a 7% decline in average ticket.
Starbucks ended the quarter with 40,990 stores.
