Starbucks Reports 7% Sales Decline, Suspends 2025 Guidance; Shares Drop 6%

Oct 22, 2024, 08:16 PM

Starbucks Corporation (NASDAQ: SBUX) reported preliminary financial results for its fiscal fourth quarter and full fiscal year 2024, indicating declines in sales and profit. In the fourth quarter, global comparable store sales decreased by 7%, with U.S. comparable store sales down 6% due to a 10% decline in comparable transactions partially offset by a 4% increase in average ticket. China comparable store sales declined by 14%, affected by intensified competition and a soft macro environment impacting consumer spending. Consolidated net revenues fell 3% to $9.1 billion, below analysts' estimates of $9.38 billion, and adjusted earnings per share were $0.80, missing the estimated $1.03. Despite increased investments and promotions, the company was unable to reverse the decline in customer traffic. Starbucks suspended its fiscal 2025 guidance and announced plans for a strategic reset to address the challenged customer experience. The company increased its quarterly dividend from $0.57 to $0.61 per share. Shares of Starbucks fell by around 6% in after-hours trading following the announcement.