Starbucks (NASDAQ:SBUX) is a Seattle-based company that operates as a roaster, marketer, and retailer of coffee around the world. The company has grown into one of the premier fast-food operators on the planet. However, its board of directors recently tabbed new leadership to chart a bolder approach going forward. Brian Niccol, the former chairman and CEO of Chipotle, was named Starbucks’ new CEO on September 9, 2024.
The company unveiled its third quarter (Q3) fiscal 2024 earnings after markets closed on Wednesday, October 30, 2024. In Q3 2024, the company opened 526 new stores. It ended the third quarter with 39,477 stores worldwide, of which 52% are company-operated and 48% licensed. Stores in the United States and China comprise 61% of its portfolio.
Consolidated net revenues fell 1% year-over-year to $9.1 billion. That represented a 1% increase on a constant currency basis. Starbucks’ loyalty rewards program 90-day active members totalled 33.8 million at the end of Q3 2024 – up 7% compared to the previous year.
Starbucks suspended its 2025 forecast when it unveiled its preliminary results last week. CEO Brian Niccol expressed his disappointment in the company’s financial results, saying “It is clear we need to fundamentally change our strategy to win back customers and return to growth.” Niccol has said that he wants to make it “easier for our customers to get a cup of coffee”, as he endeavors for Starbucks to dramatically reduce wait times going forward. To achieve this, he also aims to simplify the Starbucks menu.
Shares of Starbucks have increased 3.9% so far in 2024 as of close on October 30. The stock last had a price-to-earnings ratio of 27. The next 6-12 months will be a crucial period of transition for the coffee behemoth, one that investors will want to watch closely.
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