USA | Starbucks has released its Q4 2024 results, which has demonstrated global comparable store sales declines.
Starbucks Corporation has reported financial results for its 13-week fiscal first quarter ended December 29, 2024.
Global comparable store sales declined four percent, driven by a six percent decline in comparable transactions, partially offset by a three percent increase in average tickets. North America and U.S. comparable store sales declined four percent, driven by an eight percent decline in comparable transactions, partially offset by a four percent increase in average ticket. International comparable store sales declined four percent, driven by a two percent decline in both average ticket and comparable transactions; China comparable store sales declined six percent, driven by a four percent decline in average ticket and a two percent decline in comparable transactions.
The company opened 377 net new stores in Q1, ending the period with 40,576 stores, 53 percent company-operated and 47 percent licensed. At the end of Q1, stores in the U.S. and China comprised 61 percent of the company’s global portfolio, with 17,049 and 7,685 stores in the U.S. and China, respectively.
Consolidated net revenues of USD $9.4 billion were flat to the prior year, including on a constant currency basis. Operating margin contracted 390 basis points year-over-year to 11.9 percent, primarily driven by deleverage and investments in support of “Back to Starbucks,” including store partner wages, benefits and hours, and the removal of the extra charge for non-dairy milk customisations. The contraction was partially offset by the annualisation of pricing and supply chain efficiencies. The operating margin contracted 380 basis points year-over-year on a constant currency basis.
“While we’re only one quarter into our turnaround, we’re moving quickly to act on the 'Back to Starbucks' efforts and we’ve seen a positive response,” commented Brian Niccol, Chairman and Chief executive officer.
“We believe this is the fundamental change in strategy needed to solve our underlying issues, restore confidence in our brand and return the business to sustainable, long-term growth,” Niccol added.
Rachel Ruggeri, Chief Financial Officer, said that Starbucks was encouraged by its Q1 results, which demonstrated the effectiveness of its ‘Back to Starbucks’ strategy.
“Although we are in the beginning chapter, and have much more work ahead of us, we will continue to prioritise shareholder value through dividends, providing a predictable return of capital while we turn around our business.”
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