Starbucks just had a ‘disappointing’ quarter. Here’s how it plans to turn things around
CNN
Starbucks is brewing a turnaround plan that involves speedier service and expanding the number of promotions after its most recent quarter was “disappointing,” in the words of its own chief executive.
Starbucks is brewing a turnaround plan that involves speedier service and expanding the number of promotions after its most recent quarter was “disappointing,” in the words of its own chief executive. Shares fell more than 12% in premarket trading Wednesday after the coffee giant reported a decline in same-store sales for the first time since 2020 and slashed its full-year sales outlook, culminating in a concerning quarter for Starbucks, which traditionally reports strong earnings. “Let me be clear from the beginning, our performance this quarter was disappointing,” said CEO Laxman Narasimhan on the earnings call. Same-store sales in the United States fell 3%, a sharp reversal from the same quarter a year ago, when they grew 12%. In China, the chain’s second-largest market, sales fell a staggering 11%, with the company blaming competition from “value players” in the country. In total, global revenue dipped nearly 2%, to $8.56 billion, coming in below analysts’ expectations. Starbucks is now forecasting revenue to grow in the low single digits, a steep decline from its previous forecast of 7% to 10%. “We face a challenging operating environment,” Narasimhan said. “Headwinds discussed last quarter have continued in a number of key markets, we continue to feel the impact of a more cautious consumer, particularly with our more occasional customer, and a deteriorating economic outlook has weighed on customer traffic and impact felt broadly across the industry.”
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