Starbucks Corporation has reported financial results for its 13-week fiscal second quarter ended March 31, 2024. GAAP results in fiscal 2024 and fiscal 2023 include items that are excluded from non-GAAP results.
Net revenues for the International segment declined five percent over Q2 FY23 to USD 1.8 billion in Q2 FY24, primarily driven by an approximate five percent unfavourable impact from foreign currency translation and a six percent decline in comparable store sales, driven by a three percent decline in both comparable transactions and average ticket. Also contributing were lower product and equipment sales to, and royalty revenues from, our licensees. This decline was partially offset by net new company-operated store growth of 12 percent over the past 12 months.
Operating income decreased to USD 233.8 million in Q2 FY24 compared to USD 314.7 million in Q2 FY23. Operating margin of 13.3 percent contracted from 17.0 percent in the prior year, primarily driven by promotional activities, incremental investments in store partner wages and benefits, as well as sales mix shift, partially offset by pricing in certain markets.
“In a highly challenged environment, this quarter’s results do not reflect the power of our brand, our capabilities or the opportunities ahead,” commented Laxman Narasimhan, chief executive officer.
“It did not meet our expectations, but we understand the specific challenges and opportunities immediately in front of us. We have a clear plan to execute, and the entire organisation is mobilised around it. We are very confident in our long-term and know that our Triple Shot Reinvention with Two Pumps strategy will deliver on the limitless potential of this brand,” Narasimhan added.
“While it was a difficult quarter, we learned from our own underperformance and sharpened our focus with a comprehensive roadmap of well thought out actions making the path forward clear,” commented Rachel Ruggeri, chief financial officer.
“On this path, we remain committed to our disciplined approach to capital allocation as we navigate this complex and dynamic environment,” Ruggeri added.
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