Starbucks Q1 Earnings & Revenues Top Estimates, Global Comps Decline

Core Insights - Starbucks Corporation (SBUX) reported better-than-expected first-quarter fiscal 2025 results, with earnings and net revenues exceeding the Zacks Consensus Estimate, although the bottom line declined year over year while the top line remained relatively flat [1][5]. Financial Performance - Earnings per share (EPS) for the fiscal first quarter was 69 cents, surpassing the Zacks Consensus Estimate by 4.6%, but down 23% from 90 cents in the prior-year quarter [5]. - Net revenues reached $9.398 billion, exceeding the consensus mark of$ 9.3 billion by 1%, and were nearly flat compared to $9.425 billion in the prior-year quarter [5]. - Global comparable store sales declined 4% year over year, driven by a 6% decrease in comparable transactions, partially offset by a 3% increase in average tickets [6]. Operational Highlights - The company opened 377 net new stores worldwide, bringing the total store count to 40,576 at the end of the quarter [6]. - Operating margin contracted 390 basis points (bps) to 11.9% year over year, primarily due to increased operating expenses and investments in the "Back to Starbucks" plan [7][8]. Segment Performance - North America segment net revenues were$ 7.072 billion, down 1% year over year, with comparable store sales declining 4% [9]. - International segment net revenues increased 1% year over year to $1.871 billion, with comparable store sales also declining 4% [10][11]. - Channel Development segment net revenues fell 3% year over year to$ 436.3 million, attributed to a decline in contributions from the Global Coffee Alliance [12]. Cash and Dividend Information - The company ended the fiscal first quarter with cash and cash equivalents of $3.671 billion, up from$ 3.286 billion at the end of fiscal 2024 [14]. - A quarterly cash dividend of 61 cents per share was declared, payable on February 28, 2025, to shareholders of record as of February 14 [15]. Strategic Initiatives - To enhance global sales growth, Starbucks is focusing on its "Back to Starbucks" plan, supply-chain efficiencies, menu simplification, and effective marketing campaigns [3]. - The Starbucks Rewards loyalty program had 34.6 million 90-day active members in the U.S., reflecting a 2% sequential increase and a 1% year-over-year increase [16]. Guidance and Expectations - The company suspended its guidance for fiscal 2025 but hinted at expectations for the second quarter and the latter half of fiscal 2025 during the earnings call [17]. - Starbucks anticipates lower EPS in the second quarter due to seasonality and elevated investments, with expectations for improvement in the latter half of fiscal 2025 [18].