Starbucks (NASDAQ:SBUX) released its preliminary fourth quarter and full year fiscal year 2024 results after markets closed on Tuesday, October 22, 2024. Meanwhile, its new CEO Brian Niccol, who generated buzz after meeting considerable success as chairman and CEO of Chipotle, made headlines with brief comments on the company’s menu.
In Q4 FY2024, Starbucks reported that its global comparable store sales fell 7% compared to the previous quarter. Meanwhile, consolidated net revenues dropped 3% to $9.1 billion. That represented a 3% decline on a constant currency basis. GAAP earnings per share (EPS) dropped 25% year-over-year to $0.80.
The report stated that soft revenues in North America contributed to the declines in the quarter. Moreover, accelerated investments in the range of product offerings as well as in-app promotions have so-far failed to improve customer behaviours. This is especially true when it comes to encouraging increased traffic across Starbucks Rewards and non-SR customer segments. That contributed to the lower-than-expected performance. China comparable store sales also decline 14%. That was led by an 8% drop in average ticket and a 6% decline in comparable transactions.
Starbucks CEO Brian Niccol stated that its turnaround efforts “will take time” and that “we have drifted from our core”. Niccol focused on menus that felt “overwhelming”, an “inconsistent” product, and wait times that were too long. He has focused on improving this experience going forward.
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