Starbucks same-store sales fall for second consecutive quarter
Starbucks reported a mixed third quarter with earnings that met Street estimates but sales that came up short.
The coffee giant reported net income of $1.05 billion, or $0.93 per share, for the quarter ended June 30, down from $1.14 billion, or $0.99 per share, in the year-ago quarter.
Net sales fell 1% to $9.11 billion. Analysts had expected revenue of $9.24 billion. Global same-store sales were down 3%, fueled by a 5% decline in transactions partially offset by a 2% increase in average ticket.
U.S. same-store sales fell 2%, driven by a 6% decline in comparable transactions, partially offset by a 4% increase in average ticket. Starbucks Rewards loyalty program 90-day active members in the U.S. totaled 33.8 million, up 7% year-over-year.
International comparable store sales declined 7%. In China, Starbucks’ second-largest market outside of the U.S., same-store sales declined 14% as both average ticket and transactions fell.
“Our three-part action plan is beginning to work and driving operational improvements that we expect to improve financial performance,” commented Laxman Narasimhan, chief executive officer. “Our growing culture of focused innovation and relentless execution continues to enhance our capabilities, while helping return the business to sustainable growth."
Starbucks opened 526 net new stores in the fiscal quarter, ending the period with 39,477 stores. Of the total, 52% were company-operated and 48% licensed. Starbucks stores in the U.S. and China comprised 61% of the company’s global portfolio, with 16,730 and 7,306 stores in the U.S. and China, respectively.
“Our efficiency efforts, which are tracking ahead of expectations, partially offset investments associated with the cautious consumer environment,” said Rachel Ruggeri, CFO. “Collectively, our disciplined approach enables us to preserve both balance sheet strength and flexibility, positioning us to successfully navigate through the current macroeconomic environment.”
