Starbucks will remove extra charges for nondairy milk. Credit: Starbucks/Business Wire.

Starbucks has reported a 22% decrease in operating income to $1.3bn for the North American Segment during the fourth quarter (Q4) of 2024 compared to $1.6bn in Q4 FY23. 

Net revenues also fell 3% to $6.7bn in Q4 FY24 against $6.9bn in Q4 FY23, primarily due to a decline of 6% in comparable store sales. 

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A 3% decrease was posted in consolidated net revenues to $9.1bn in Q4 2024.  

For the full year, the company’s consolidated net revenues witnessed a 1% growth, including on a constant currency basis, to $36.2bn. 

During the quarter, generally accepted accounting principles earnings per share of $0.80 fell 25% compared to the previous year. 

The North American and US comparable store sales dropped by 6% while international sales saw a 9% decline.

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Despite these challenges, Starbucks expanded its global presence, opening 722 new stores and concluding the quarter with a total of 40,199 stores. 

For Q3 ending 30 June 2024, Starbucks reported total net revenues of $9.11bn. In an executive move, the company appointed former Chipotle executive Brian Niccol as its chair and CEO in August.

Starbucks chief financial officer Rachel Ruggeri said: “I have seen what Starbucks is capable of when we focus on what we do best. I have confidence in our ability to turn around our business and expect we will return to long-term growth.” 

Niccol said: “It is clear we need to fundamentally change our strategy to win back customers. ‘Back to Starbucks’ is that fundamental change. My experience tells me that when we get back to our core identity and consistently deliver a great experience, our customers will come back.

“We have a clear plan and are moving quickly to return Starbucks to growth.” 

In a separate development, Starbucks announced it will no longer charge customers extra for choosing nondairy milk alternatives in their beverages, starting 7 November, with the introduction of its holiday menu.  

This decision follows widespread customer demand for such customisation options, with nondairy milk substitutions being the second most requested change after adding a shot of espresso.  

With this new policy, nearly half of the customers at Starbucks-operated stores in the US will benefit from a price reduction exceeding 10% on their customised drinks.