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Starbucks reports better-than-expected quarterly sales as turnaround efforts begin
Starbucks on Tuesday reported better-than-expected sales in its fiscal first quarter as some of its turnaround efforts start to take hold.
The Seattle coffee giant said its revenue was flat at $9.4 billion for the 13-week period ending Dec. 29. That beat Wall Street’s forecast of $9.3 billion, according to analysts polled by FactSet.
Chairman and CEO Brian Niccol, who joined the company in September, said customer-focused changes — such as a decision to stop charging extra for non-dairy milk and a streamlining of the menu — were helping to improve service and drive store traffic.
Starbucks is trying to reestablish itself as a gathering place, and this week announced that it will start using ceramic mugs and offering in-store customers free refills of coffee or tea. The company is also trying to appeal to customers with a new rule that requires people to buy something if they want to hang out or use the restroom.
Starbucks’ same-store sales — or sales at locations open at least a year — fell 4% compared to the same period last year. The decline was less than the 5.5% analysts anticipated, according to FactSet. It was also better than the previous quarter, when global same-store sales were down 7%.
U.S. same-store sales also fell 4% in the first quarter. Starbucks said transactions were down 8% but customers spent more per visit. Starbucks also pulled back on discounts during the quarter, Niccol said.
“We’ve taken steps to refocus the business, our mission and our marketing to better align with our identity as a coffee company,” he said in a video message.
Also Tuesday, Niccol announced the departure of two senior executives and a reshuffling of their job responsibilities.
Niccol said Mike Grams, who most recently served as president of Taco Bell, will become Starbucks’ chief stores officer for North America. Meredith Sandland, the CEO of Empower Delivery and the former chief development officer at Taco Bell, will become Starbucks’ chief store development officer. Niccol led Taco Bell until 2018, when he left to run Chipotle.
Niccol also announced earlier this month that Starbucks plans an unspecified number of corporate layoffs by early March.
Starbucks’ shares rose 3% in after-hours trading Tuesday.
Starbucks Surges: Reports Better-Than-Expected Quarterly Sales as Turnaround Efforts Begin
In a surprising turn of events, Starbucks has reported better-than-expected quarterly sales as their turnaround efforts begin to take effect. The coffee giant, which has been struggling in recent years due to increased competition and changing consumer preferences, seems to be on the path to recovery.
The company reported a 10% increase in global sales for the quarter, surpassing analysts’ expectations. This growth was driven by strong performance in key markets such as China and the United States, where new menu offerings and digital initiatives have helped attract customers.
Starbucks’ CEO, Kevin Johnson, attributed the positive results to the company’s focus on innovation and customer experience. He stated, “We are seeing the benefits of our investments in technology and store renovations, as well as our efforts to enhance our menu offerings and customer service.”
Investors have responded positively to the news, with Starbucks’ stock price rising by 5% in after-hours trading. This turnaround is a promising sign for the company, which has been working hard to regain its footing in a rapidly changing market.
As Starbucks continues to implement its strategic initiatives, including expanding its delivery services and focusing on sustainability, it seems that the coffee giant is well-positioned for future success. Only time will tell if this positive momentum can be sustained, but for now, Starbucks fans can breathe a sigh of relief knowing that their beloved coffee chain is on the right track.
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Starbucks, quarterly sales, turnaround efforts, better-than-expected, financial report, coffee industry, revenue growth, marketing strategy, customer satisfaction, store performance
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