Starbucks Still Needs More Time

Core Viewpoint - Starbucks' fiscal third-quarter results were mixed, with revenue growth but significant declines in earnings per share and comparable sales in North America [1][4]. Financial Performance - Total revenue for Q3 FY 2024 was $9.11 billion, increasing to $9.46 billion in Q3 FY 2025, representing a 4% growth and beating expectations [2]. - Adjusted earnings per share fell from $0.93 to $0.50, a decline of 46%, which missed expectations [2]. - North America comparable sales remained unchanged at -2%, while international comparable sales improved by 7 percentage points, moving from -7% to 0% [2]. Business Insights - The company reported a 4% global revenue increase, with a 2% rise in North America and a 9% increase in the international segment [4]. - Despite the revenue growth, global comparable sales decreased by 2%, driven by a 2% drop in North America, while international sales remained flat [4]. - CEO Brian Niccol expressed confidence in the company's turnaround, stating that significant progress has been made and a "wave of innovation" is expected next year [5]. Market Reaction - Following the quarterly release, Starbucks' stock rose by 5% in after-hours trading, indicating investor acceptance of the CEO's optimistic outlook despite the earnings miss [6]. Regional Performance - China showed positive signs with comparable sales increasing by 2% year over year, reversing a previous decline, and the company opened over 500 new locations in China in the past 12 months [7].