Financial Data and Key Metrics Changes - In Q1 fiscal 2026, global revenue increased by 5% to $9.9 billion, with operating margins at 10.1% and EPS at $0.56, down 19% year-over-year [7][21][26] - North America revenue grew by 3% to $7.3 billion, with comparable store sales also increasing by 4% [7][22] - International revenue rose by 10% to $2.1 billion, with comparable store sales growth of 5% [16][24] Business Line Data and Key Metrics Changes - North America saw a 4% increase in comparable store sales, driven by a 3% growth in transactions [22] - The U.S. company-operated sales comps were up 4%, marking the first transaction growth in eight quarters [8][22] - The international segment's comparable sales growth was led by strong performance in China, Japan, and the U.K. [16][24] Market Data and Key Metrics Changes - Starbucks Rewards' 90-day active members reached a record 35.5 million, with both rewards and non-rewards transactions growing year-over-year for the first time in eight quarters [8][22] - In China, comparable store sales grew by 7%, reflecting strong momentum and effective marketing [16][24] Company Strategy and Development Direction - The company is focused on its "Back to Starbucks" plan, aiming for sustained growth and profitability through improved customer service and operational efficiency [6][20] - Strategic investments are being made to enhance technology and streamline operations, with a new Chief Technology Officer appointed to drive improvements [10][20] - The company plans to open approximately 600-650 net new coffeehouses in fiscal 2026, with a focus on international expansion, particularly in China [30][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the turnaround strategy, noting that top-line growth is expected to lead to improved margins and earnings [19][34] - The company anticipates that pressures from product and distribution costs will begin to ease in the latter half of the fiscal year [25][32] - Management highlighted the importance of maintaining customer engagement and brand relevance through innovative marketing and menu offerings [15][19] Other Important Information - A joint venture with Boyu Capital in China is expected to enhance Starbucks' growth potential in the region, with a 60% interest being sold to Boyu [27][28] - The company is implementing a new labor model and refining its supply chain to improve efficiency and reduce costs [9][44] Q&A Session Summary Question: North America traffic performance and Green Apron service model - Management noted that North America comp results were driven by transactions, with about 0.5 points attributed to sales transfer from closed stores [36][37] Question: Additional cost opportunities - The company has identified a plan to track down $2 billion in costs over the next two years, focusing on efficiency across the P&L [43][44] Question: Earnings guidance for fiscal 2026 - The higher end of earnings guidance is contingent on maintaining strong comp performance and effective execution of the Green Apron service model [46][47] Question: Same-store sales momentum and service versus innovation - Management emphasized that a strong operating foundation enhances the effectiveness of marketing and innovation efforts [66][69] Question: Afternoon execution and competition - The company sees significant opportunities in the afternoon daypart and plans to enhance its offerings to compete effectively [55][60]

Financial Data and Key Metrics Changes - In Q1 fiscal year 2026, global revenue increased by 5% to $9.9 billion, with operating margins at 10.1% and EPS at $0.56, down 19% from the prior year [5][18][24] - North America revenue grew 3% to $7.3 billion, with comparable store sales also increasing by 4% [5][19] - International segment revenue rose by 10% to $2.1 billion, with comparable sales growth of 5% [13][21] Business Line Data and Key Metrics Changes - North America saw a 4% increase in comparable store sales, driven by a 3% growth in transactions [5][19] - The U.S. company-operated transaction comps grew year over year for the first time in eight quarters, with Starbucks Rewards' active members reaching 35.5 million [6][20] - The international segment's comparable store sales in China grew by 7%, marking the third consecutive quarter of growth [13][22] Market Data and Key Metrics Changes - The U.S. licensed store portfolio revenue declined due to ongoing trends in grocery and retail channels, but growth was noted in business, college, and healthcare segments [21] - The international segment's growth was supported by strong performance in major markets like China, Japan, and the U.K. [21][22] Company Strategy and Development Direction - The company is focused on its "Back to Starbucks" plan, aiming for sustained growth and profitability through disciplined execution [4][5] - Strategic investments are being made to enhance operational foundations, with a focus on technology and supply chain improvements [8][19] - The company plans to open approximately 600-650 net new coffeehouses in fiscal 2026, with a significant portion in China [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the turnaround strategy, noting that top-line growth is expected to lead to improved margins and earnings [4][16] - The company anticipates that pressures from product and distribution cost inflation will begin to ease as the fiscal year progresses [23][29] - The outlook for fiscal 2026 includes expectations for 3% or better global comparable sales growth [27][30] Other Important Information - A joint venture with Boyu Capital was announced to enhance Starbucks' potential in China, with expectations to close the deal in spring 2026 [24][25] - The company has reduced its menu by approximately 25-30% to streamline offerings and focus on health and wellness platforms [78] Q&A Session Summary Question: North America traffic performance and Green Apron service model - Management noted that North America comp results were driven by transactions, with about 0.5 points attributed to sales transfer from closed stores [36] Question: Additional cost opportunities - The company is tracking down about $2 billion in costs over the next two years, focusing on efficiency across the P&L [41] Question: Earnings guidance for fiscal 2026 - Higher-end guidance is contingent on maintaining strong comp performance, supported by effective execution of the Green Apron service model [44][46] Question: Same-store sales momentum and non-rewards member growth - Management emphasized the importance of engaging both rewards and non-rewards customers, with a focus on broad marketing and menu innovation [48][50] Question: Afternoon execution opportunities - The company plans to enhance afternoon offerings with more relevant beverages and food, leveraging digital menu boards for better customer engagement [54][55]

Core Insights - Starbucks is expanding its pilot program by implementing at least one assistant store manager, now termed "coffeehouse coaches," at each domestic location by the end of 2026 [1][2][4] Group 1: Program Implementation - The pilot program involved 62 employees in select locations across the U.S., with positive feedback regarding support and operational efficiency [1][3] - The initiative aims to enhance the customer experience and employee growth opportunities, aligning with the "Back to Starbucks" plan to address declining sales and traffic [2][3] Group 2: Role and Responsibilities - Coffeehouse coaches will focus on leadership, supporting customers, and assisting partners during busy shifts, acting as a resource for real-time coaching [4] - The company plans to hire 90% of its leaders from internal candidates, with nationwide postings for coffeehouse coach positions expected soon [4] Group 3: Broader Strategic Goals - The "Back to Starbucks" plan includes various strategies such as closing underperforming locations, reimagining product offerings, and redesigning the Rewards program [5] - CEO Brian Niccol emphasizes returning to the original third-place environment, enhancing the coffeehouse atmosphere by reintroducing features like the condiment bar and personalizing customer interactions [5]

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

Financial Performance - Starbucks' global net revenue reached $8.8 billion, a 3% year-over-year increase[3] - The company's global operating margin was 8.2%, a decrease of 450 basis points year-over-year[3] - Diluted net earnings per share (EPS) were $0.41, a 38% year-over-year decrease[3] Sales and Store Growth - Overall comparable store sales decreased by 1%[3] - North America's comparable store sales decreased by 2%[3] - China's comparable store sales remained flat at 0%[3] - The global store count increased by 5% year-over-year, reaching 40,789 stores[3] Strategic Direction - The company is focused on its "Back to Starbucks" plan to improve the business[2] - Starbucks aims to re-introduce the Starbucks experience to the world by focusing on customer service, coffee quality, and community coffeehouses[6, 7, 8] - The company emphasizes its mission to be the premier purveyor of the finest coffee, inspiring and nurturing the human spirit[5]

Core Insights - Starbucks reported disappointing second-quarter fiscal 2025 results, leading to a 9.6% decline in stock price before market open on April 30, although it has since recovered by approximately 6.6% as of May 1 [1][3] Financial Performance - Adjusted earnings per share decreased by 39.7% year over year, from $0.68 to $0.41, missing the Zacks Consensus Estimate of $0.49 by 16.3% [3] - Total revenue increased by 2.3% year over year to $8.76 billion, but fell short of the Zacks Consensus Estimate of $8.79 billion [3] - Global comparable store sales declined by 1% year over year, driven by a 2% decrease in comparable transactions, partially offset by a 1% increase in average tickets [4] Operational Highlights - The company opened 213 net new stores, bringing the total store count to 40,789 [4] - Non-GAAP operating margin contracted by 4.60% to 8.2% due to deleverage and increased labor costs associated with the "Back to Starbucks" initiative [4] Segment Performance - North America segment net revenues were $6.47 billion, up 1% year over year, but operating margin contracted by 6.4% to 11.6% [5] - International segment net revenues increased by 6% year over year to $1.87 billion, with operating margin contracting by 1.7% to 11.6% [5] Strategic Initiatives - CEO Brian Niccol expressed optimism regarding the "Back to Starbucks" plan, which focuses on enhancing atmosphere, improving throughput, and boosting customer satisfaction through increased staffing and digital engagement [2]

Core Viewpoint - Starbucks reported better-than-expected first-quarter fiscal 2025 results, with earnings and net revenues exceeding estimates, but faced a decline in year-over-year earnings and flat revenues [2][5]. Financial Performance - Earnings per share (EPS) for the 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, 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 Insights - The company opened 377 net new stores globally, bringing the total store count to 40,576 [6]. - Operating margin contracted 390 basis points to 11.9% 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% to $1.871 billion, with comparable store sales also down 4% [10]. - Channel Development segment net revenues fell 3% to $436.3 million, attributed to declines in the Global Coffee Alliance and ready-to-drink revenues [12]. Strategic Initiatives - Starbucks aims to enhance sales growth through the "Back to Starbucks" plan, supply-chain efficiencies, menu simplification, and effective marketing campaigns [4]. - The company has suspended its guidance for fiscal 2025 but expects EPS to improve in the latter half of the fiscal year [17][18]. Financial Position - As of the end of the fiscal first quarter, cash and cash equivalents stood at $3.671 billion, up from $3.286 billion at the end of fiscal 2024 [14]. - Long-term debt was $14.312 billion, slightly down from $14.319 billion as of September 2024 [14]. Market Outlook - Estimates for Starbucks have trended downward, with a consensus estimate shift of -8.67% [20][21]. - The stock currently holds a Zacks Rank 3 (Hold), indicating expectations for an in-line return in the coming months [23].