US coffee giant Starbucks has suspended its forecast for the full fiscal year 2025 as its new CEO Brian Niccol calls for fundamental change in the company’s strategy to return to growth.
The company has reported preliminary financial results for its 13-week fiscal fourth quarter (Q4) and the 52-week fiscal year ended 29 September 2024.
Consolidated net revenue for Q4 of the fiscal year was $9.1bn – a decline of 3%.
For the full fiscal year, the brand’s consolidated net revenues rose by 1% to $36.2bn.
The company’s generally accepted accounting principles earnings per share stand at $0.80 – a 25% decrease from the previous year.
Global comparable store sales fell by 7% in Q4 and have dropped 2% for the full fiscal year 2024.
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By GlobalDataThe company’s performance was affected by a decline in North American revenues, with US comparable store sales down 6%. This was due to a 10% drop in transactions, partially offset by a 4% increase in average ticket size.
In China, comparable store sales fell 14%, influenced by an 8% decrease in average ticket size and a 6% drop in comparable transactions. This decline was exacerbated by heightened competition and a sluggish macroeconomic environment affecting consumer spending.
Due to Starbucks’ recent CEO transition and current business conditions, the company is suspending its guidance for the entire fiscal year 2025.
Niccol said: “Our fourth quarter performance makes it clear that we need to fundamentally change our strategy so we can get back to growth and that’s exactly what we are doing with our Back to Starbucks plan.
“I’ve spent my first several weeks in stores engaging with and listening to feedback from our partners and customers. It’s clear that Starbucks is a much-loved brand.
“We need to focus on what has always set us apart — a welcoming coffeehouse where people gather and where we serve the finest coffee, handcrafted by our skilled baristas. We are energised and the team is already moving quickly.”
Starbucks remains committed to creating shareholder value with a strategic reset underway.
The company’s board of directors approved an increase in the quarterly cash dividend from $0.57 to $0.61 per share of outstanding common stock.
