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Starbucks’ same-store sales are rising again, ending an 18-month slide in a positive sign for turnaround efforts at the world’s largest coffee chain.
The Seattle-based company reported a 1 per cent increase in global comparable sales in the fourth quarter that ended in late September, driven by the international business that accounts for a slim majority of its nearly 41,000 stores.
Same-store sales in North America were unchanged from a year ago, an improvement from previous quarters.
Starbucks has been struggling as customers cut back on discretionary spending and competing coffee outlets battle for share in markets such as the US and China.
Chief executive Brian Niccol launched his plan to turn around flagging sales after he joined Starbucks in September 2024, an effort that includes remodelling cafés and simplifying its elaborate menu offerings. Starbucks is also spending more on barista hours in an effort to speed up and improve service.
“Our plan is working and our turnaround is taking hold,” Niccol told analysts. The shares rose 1.6 per cent in after-hours trading.
Before the close of the fiscal year in September, Starbucks shut down 627 stores, it confirmed on Wednesday, more than 90 per cent of them in North America, and laid off 900 office workers in a restructuring that will cost $1bn.
Revenue in the quarter rose by 5 per cent to $9.6bn, beating estimates. However, Starbucks’ net profit dropped by 85 per cent year on year to $133mn, missing estimates, reflecting the restructuring charges and spending to increase hours for baristas, among other costs.
