Starbucks Q2 Earnings & Revenues Miss Estimates, Stock Down

Core Insights - Starbucks Corporation (SBUX) reported second-quarter fiscal 2025 results, with earnings and net revenues missing the Zacks Consensus Estimate, leading to a 6.4% decline in stock price during after-hours trading [1][3] Financial Performance - Earnings per share (EPS) for the quarter was 41 cents, missing the consensus estimate of 49 cents by 16.3%, and decreased 39.7% year over year from 68 cents [3] - Net revenues were $8.76 billion, slightly below the consensus mark of $8.79 billion by 0.3%, but up 2.3% from $8.56 billion in the prior-year quarter [3] Comparable Store Sales - Global comparable store sales declined 1% year over year, driven by a 2% decrease in comparable transactions, partially offset by a 1% increase in average tickets [4] Store Expansion - Starbucks opened 213 net new stores worldwide during the quarter, bringing the total store count to 40,789 [4] Margin Analysis - Non-GAAP operating margin contracted 460 basis points to 8.2% from the prior year, primarily due to expense deleverage and increased labor costs associated with the "Back to Starbucks" initiative [5] - The North America segment's operating margin decreased 640 basis points to 11.6% from 18% in the prior-year quarter [7] Segment Performance - North America segment net revenues were $6.47 billion, up 1% year over year, with comparable store sales declining 1% [6] - International segment net revenues increased 6% year over year to $1.87 billion, with comparable store sales rising 2% [7] - Channel Development segment net revenues fell 2% year over year to $409 million, attributed to a decline in contributions from the Global Coffee Alliance [9] Financial Position - As of the end of the fiscal second quarter, cash and cash equivalents were $2.67 billion, down from $3.29 billion at the end of fiscal 2024 [11] - Long-term debt totaled $13.3 billion, reduced from $14.3 billion as of September 2024 [11] Dividend Declaration - Management declared a quarterly cash dividend of 61 cents per share, payable on May 30, 2025, to shareholders of record as of May 16 [12]