Starbucks on Wednesday reported quarterly earnings and revenue that missed analysts’ expectations as sales in the U.S. and China, its two biggest markets, disappointed.
The company previously released a preliminary report of its quarterly results on Oct. 22 and announced it was suspending its fiscal 2025 outlook.
This report marks the first under CEO Brian Niccol, who joined the company on Sept. 9 to revive the floundering business.
“It is clear we need to fundamentally change our strategy to win back customers,” CEO Brian Niccol said in a statement. “We have a clear plan and are moving quickly to return Starbucks to growth.”
Investors are expecting that Niccol will share more details about his turnaround strategy during the company’s conference call, scheduled for 5 p.m. ET.
Shares of the company fell 1% in extended trading on Wednesday.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG:
- Earnings per share: 80 cents vs. $1.03 expected
- Revenue: $9.07 billion vs. $9.36 billion expected
Starbucks reported fiscal fourth-quarter net income attributable to the company of $909.3 million, or 80 cents per share, down from $1.22 billion, or $1.06 per share, a year earlier.
Net sales dropped 3% to $9.07 billion.
The company’s global same-store sales fell 7%, fueled by weak demand in the U.S. and China. Traffic to its stores worldwide fell 8% during the quarter.
The company’s U.S. restaurants reported same-store sales declines of 6%, fueled by a 10% tumble in traffic.
In China, the company’s same-store sales plummeted 14% as both traffic and average ticket fell. Starbucks has been facing greater competition from local rivals, such as Luckin Coffee, which can undercut the company’s prices.