Starbucks execs say 'tangible progress' made in turnaround effort; sales slump slightly

USA Today

30-07-2025

Starbucks executives praised the company's turnaround plan in its third quarter earnings release as sales hovered around expectations.
The July 29 earnings release showed that comparable store sales around the globe declined 2%, fueled by a 2% drop in transactions buffered by a 1% increase in the average ticket.
Domestic sales saw the same 2% drop, with transactions dropping 4% and average ticket costs increasing 2%.
Starbucks chairman and CEO Brian Niccol noted on the earnings call that price increases would be the "last lever I'd like to pull" as a part of the company's turnaround strategy
Bloomberg reported that the analysts it surveyed saw the global sales numbers as a .5% miss from expectations and that domestic sales were "slightly better than analysts had expected."
"We've fixed a lot and done the hard work on the hard things to build a strong operating foundation, and based on my experience of turnarounds, we are ahead of schedule," Niccol said in the earnings release.
The company stated that it opened a net 308 new stores worldwide and finished the quarter with stores in the U.S. and China comprising 61% of the company's outlets.
Comparable store sales figures in China saw a 2% increase with a 6% increase in transactions and a 4% decline in average ticket cost. It is the first sales gain in the country since 2023, according to Bloomberg.
CFO says "Back to Starbucks" has made progress
Starbucks Chief Financial Officer Cathy Smith said that the company has made "tangible progress" in its "Back to Starbucks" strategy.
"We are focused on growing back better and delivering durable, sustainable long-term growth," Smith added.
Niccol told Reuters in June that he would accelerate the rollout of the coffeehouse chain's new staffing and service model, aiming for all corporate-owned North American stores by summer's end.
"We're working hard to ensure our coffeehouses have the right vibe," Niccol said at the company's annual meeting in March. "We want to invite customers in, showcase our great coffee, provide a comfortable place to stay, and make them feel like their visit was time well spent."
The CEO said that early tests of the model have sped up service times and grown sales, without providing the wire service specifics at the company's leadership summit in Las Vegas.
Smith said on the call that the company will spend $500 million on more labor in company owned stores.
Other changes under Niccol, who took the reins in September, include an announced increase in in-office work requirements for corporate employees and the implementation of an updated dress code that caused unionized baristas to strike in May.
Contributing: Anthony Robledo