In this articleSBUXBrian Niccol, CEO of StarbucksAnjali Sundaram | CNBCStarbucks CEO Brian Niccol shared more details about the company's turnaround strategy during the company's quarterly conference call on Wednesday.For three straight quarters, Starbucks has reported declining sales. But the coffee chain is hoping that some easy tweaks to its U.S. business will pay off and help reverse the trend as it plots a more ambitious and comprehensive game plan.Many of the coming changes are meant to help Starbucks ...

Core Perspective - Starbucks is launching a "Back to Starbucks" initiative aimed at enhancing customer experience and reclaiming its identity amidst declining customer visits [1][7] Financial Performance - In the fourth quarter, global comparable store sales fell by 7%, and consolidated net revenue decreased by 3% to $9.1 billion [3][6] - U.S. comparable store sales declined by 6%, driven by a 10% drop in transactions, despite a 4% increase in average ticket [4] - For the full fiscal year, comparable store sales declined by 2%, while consolidated net revenue slightly increased to $36.2 billion [6] Strategic Initiatives - The company aims to simplify its menu and reposition itself as a community gathering place to attract more customers [2][10] - Staffing improvements, streamlined processes, and a commitment to high-quality service are emphasized to enhance customer engagement [9] - The goal is to complete all in-store orders in less than four minutes, with 50% of transactions already meeting this target [12][13] Market Focus - The company is focusing on the U.S. market while exploring growth opportunities internationally, particularly in China [14] - Marketing efforts will shift from targeting only Starbucks Rewards customers to a broader audience, highlighting handcrafted products and coffee innovation [15]

Core Insights - Starbucks is planning to implement "common sense guardrails" on mobile app customizations to streamline the ordering process and improve customer experience [3][4] - The initiative comes after a disappointing third-quarter earnings report, indicating a need for operational overhaul under the new CEO Brian Niccol [3][4] - Mobile orders currently account for over 30% of transactions at Starbucks, but issues like longer wait times and crowded cafés have negatively impacted customer satisfaction [5] Group 1 - The company aims to separate the pick-up process from in-store orders to enhance efficiency [3] - The current app allows extensive customization, complicating orders for both customers and baristas [4] - Pricing architecture will be adjusted to prevent unexpected costs for customers [4] Group 2 - A new sequencing algorithm is being prioritized to provide accurate pickup times for mobile orders, reducing the strain on café operations [5] - The changes are part of a broader strategy to revitalize the brand and improve overall service quality [3][5]

Starbucks (SBUX) reported $9.07 billion in revenue for the quarter ended September 2024, representing a year-over-year decline of 3.2%. EPS of $0.80 for the same period compares to $1.06 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $9.06 billion, representing a surprise of +0.12%. The company has not delivered EPS surprise, with the consensus EPS estimate being $0.80.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street ex ...

Financial Data and Key Metrics Changes - Q4 consolidated revenue was $9.1 billion, down 3% from the prior year, driven by a 7% decline in comparable store sales, consisting of an 8% decrease in transactions and a 2% increase in average ticket [9] - Q4 EPS was $0.80, down 24% from the prior year, primarily due to traffic challenges and heightened investments [15] - Full fiscal year 2024 consolidated net revenues increased 1% to $36.2 billion, driven by 7% net new company-operated store growth, offset by a 2% decline in comparable store sales [15] - Full year consolidated operating margin was 15%, contracting 110 basis points from the prior year [16] Business Line Data and Key Metrics Changes - U.S. comparable store sales declined by 6%, driven by a 10% decline in comparable transactions, partially offset by a 4% increase in average ticket [9] - China comparable store sales declined by 14%, driven by an 8% decline in average ticket and a 6% decline in comparable transactions [11] Market Data and Key Metrics Changes - Active Starbucks Rewards (SR) membership grew 4% year-over-year to 33.8 million, but remained flat compared to Q3 [10] - In China, the market reached an all-time high of 23.5 million SR active members, with 2.2 million net new members versus the prior year [11] Company Strategy and Development Direction - The company plans to reduce the number of new stores and renovations in fiscal year 2025 to accommodate a redesign and support a broader turnaround [19] - The focus is on reestablishing Starbucks as a community coffee house, enhancing customer experience, and simplifying the menu [20][32] - The company aims to improve throughput and service times, targeting a four-minute wait for in-cafe orders [28][90] Management's Comments on Operating Environment and Future Outlook - Management acknowledged traffic challenges and emphasized the need for a fundamental change in strategy to win back customers [24] - The CEO expressed confidence in the brand's strength and the ability to turn around the business by focusing on core values and improving customer experience [26][48] - The guidance for full fiscal year 2025 is suspended to allow for a thorough assessment of the business and strategies [18] Other Important Information - The company announced an annual increase in the quarterly cash dividend from $0.57 to $0.61 per share, marking the 14th consecutive year of annual increase [22] - The company is working on a billion-dollar cost efficiency unlock program, which is expected to continue to provide benefits in the coming years [110] Q&A Session Summary Question: Key learnings from baristas and opportunities for improvement - The CEO highlighted that baristas love the brand and emphasized the need for better staffing and a return to the coffee condiment bar to improve service speed [52][53] Question: Resource reallocation and marketing strategies - The CEO confirmed the intention to stop ineffective practices and shift resources to more productive areas, including marketing and labor [63][64] Question: Menu simplification and customization guardrails - The CEO stated that menu simplification is underway, focusing on both beverage and food, and emphasized the need for guardrails on customization to improve execution [71][73] Question: Food as a growth opportunity - The CEO acknowledged food as a key piece of the business and indicated a commitment to improving food quality while focusing on fewer, better offerings [79] Question: Store redesign and renovation plans - The CEO discussed plans to create a welcoming cafe experience and separate mobile order pickup from in-store experiences, with a focus on reducing renovation costs [82][87] Question: Siren system and operational improvements - The CEO expressed enthusiasm for the Siren Craft system as a key unlock for improving service times and operational efficiency [90][92] Question: Investment areas for restoring traffic momentum - The CEO outlined several areas for investment, including improving partner and customer experiences, pricing architecture, and broadening marketing reach [107][108]

Starbucks CEO Brian Niccol on Wednesday told investors that he plans to overhaul Starbucks' US locations, adding more comfortable seating, ceramic mugs and a coffee-condiment bar, with customer wait times of less than four minutes. Faced with falling demand for its pricey beverages in the key US and China markets as well as a slide in its share price, Starbucks' investors are counting on the new CEO to steer the company back to growth. The company last week suspended its forecast for its 2025 fiscal year. " ...

Topline Starbucks customers who prefer non-dairy milk will soon start saving a bit of change when ordering from the coffeehouse chain, as Starbucks announced Wednesday it will remove its extra charge for dairy substitutes next week. The change will take effect next week. (Photo by Stephen Chernin/Getty Images) Getty Images Key Facts The change will go into effect Nov. 7 alongside Starbucks' holiday launch, removing extra charges for people customizing their drinks with non-dairy alternatives like soy milk, ...

Starbucks (SBUX) came out with quarterly earnings of $0.80 per share, in line with the Zacks Consensus Estimate. This compares to earnings of $1.06 per share a year ago. These figures are adjusted for non-recurring items.A quarter ago, it was expected that this coffee chain would post earnings of $0.93 per share when it actually produced earnings of $0.93, delivering no surprise.Over the last four quarters, the company has not been able to surpass consensus EPS estimates.Starbucks, which belongs to the Zack ...

Starbucks will stop surcharges on non-dairy milk ahead of the holidays.CEO Brian Niccol announced the change during a Wednesday earnings call.The new policy will save some customers as much as 10% on their orders, Niccol said. Sign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. Read preview Thanks for signing up! Go to newsletter preferences Thanks for signing up! Access your favorite topics in a personalized feed while you're on the go. ...

Starbucks said Wednesday that it will remove the surcharge for dairy substitutes, saving some U.S. customers more than 10% on their drinks. The change goes into effect Nov. 7 and follows years of pleading from customers to eliminate the extra fee, especially as milk alternatives have grown more popular. More recently, Starbucks has seen its U.S. sales fall as its higher prices scare away occasional customers whose wallets have already been stretched by inflation. "This is just one of many changes we'll make ...