Starbucks (SBUX, Financial) announced a larger-than-expected decline in global comparable sales for the quarter, attributed to weak demand for its high-priced coffee in the U.S. amid rising macroeconomic uncertainties. According to data compiled by the London Stock Exchange Group (LSEG), same-store sales fell by 1%, surpassing analysts' average expectation of a 0.26% decline.
CEO Brian Niccol stated that while financial results have not yet reflected progress, their "Return to Starbucks" plan is gaining momentum. The company aims to revitalize sales by focusing on its café roots, but faces cautious consumers dealing with the impact of unpredictable trade policies.
The company's stock dipped about 1% in after-hours trading, closing at $84. Despite a surge in share price following Niccol's appointment as CEO, the stock has fallen roughly 7% this year due to trade policy uncertainties. In North America, same-store sales fell 1%, against an expected 0.24% decline, as consumer sentiment weakened.
International comparable sales grew by 2%, contrary to the expected 1.13% decline. The quarter saw a 590 basis point drop in gross margin, with adjusted earnings per share at 41 cents, below the expected 49 cents. Starbucks plans to cut around 1,100 corporate jobs to streamline operations and reduce costs.
