Starbucks reveals shock earnings in latest report
The coffee company has been in turnaround mode under new CEO Brian Niccol for almost a year.
However, Niccol's efforts to simplify menus, cut waiting times and make cafe's friendlier have yet to show up in the figures.
Starbucks global sales declined two percent in the quarter ending June 29.
This was an even greater drop than the 1.3 percent decline expected by analysts.
The company's North America same-store sales fell by two percent, a smaller drop than was anticipated by Wall Street, according to StreetAccount.
The results come just weeks after Starbucks launched its biggest hiring spree in history.
Soaring prices and what critics call a 'soulless' in-store experience have only added to the customer exodus from the chain.
The coffee company has been in turnaround mode under new CEO Brian Niccol
Niccol said last month that the goal isn't just to speed up service, but to ease pressure on overworked employees and bring back the warmth and personal touch that once made Starbucks a beloved 'third place' between home and work.
Five years ago, Starbucks stores averaged 23 employees. Cost-cutting has since trimmed that number down to 18 to 19 — four to five fewer workers per location.
Restoring pre-Covid staffing levels would mean hiring between 68,000 and 85,000 people across all US stores.
Even focusing solely on the 11,000 company-owned locations, the increase would still be a massive 44,000 to 55,000 hires.
As part of his turnaround plans Niccol has set about axing complicated drinks from Starbucks menus, asking staff to put messages on customer's coffee cups and scaling back promotions.
The hiring plan will help address the major customer peeve of long wait times before getting their hands on a coffee.
It will also likely be popular with front of house employees who have complained of chronic issues with understaffing, which compounds the backlogs.
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Daily Mail
2 hours ago
- Daily Mail
JEFF PRESTRIDGE: Neil Woodford must pay for his failures
A lot has happened in the UK since June 2019. None of us will ever forget Covid, the loss of loved ones, the economic destruction it brought about and the hole it put in the nation's finances. A black hole that Rachel from Accounts widens every day as a result of her inability to curb public spending. We've seen four prime ministers come and four go – and, for better or worse (I will let you be the judge), we now have the first Labour government since 2010. Personally, I've lost my mother (Helen of Troy) to cancer, finally got divorced after a 13-year separation, and been diagnosed with prostate cancer. Yet, in the financial world, one thing has not changed. Investment manager Neil Woodford once considered the UK's answer to Warren Buffett, has yet to be punished for the part he played in the collapse of his flagship fund, Woodford Equity Income. A collapse that was hurried along by the fund's suspension in June 2019 when a big institutional investor – Kent County Council – wasn't able to get its money out. The withdrawal couldn't be made because the fund's portfolio was chock-a-block with illiquid stocks that were difficult to sell in a hurry. A collapse which triggered painful losses for hundreds of thousands of investors despite a subsequent redress scheme. Last week, after six long years, the City's regulator, the Financial Conduct Authority, finally spelt out the punishment it would be meting out to Neil Woodford and his company, Woodford Investment Management: respective fines of £5.9 million and £40 million – and a ban preventing Mr Woodford from running retail investment funds in the future. Hurrah, you would think. Justice at long last. But not yet. Mr Woodford passionately believes he is innocent of any wrongdoing and has appealed against the regulator's decision. It will be heard in the Tax and Chancery Chamber of the Upper Tribunal, which deals with appeals against enforcement decisions made by the FCA and other financial regulators, such as the Prudential Regulation Authority and The Pensions Regulator. If the judge sides with Woodford, the fines and ban could be quashed. Fund expert Alan Miller believes there are enough flaws in the basis of the regulator's decision to make this a possibility. Equally, the judge could rubber stamp the FCA's decision. But irrespective of the outcome, we won't find out for a while. Judgments made in the Upper Tribunal are not handed out quickly. For example, an appeal made by two former Metro Bank executives against fines that the FCA wanted to impose on them for breaches of City listing rules was made in late 2022. It was only in June this year that the Upper Tribunal decided to uphold the FCA's decision – a wait of more than two and a half years. There is nothing to indicate that Woodford's appeal will be judged any quicker. So investors, sore over how Woodford has so far escaped financial punishment, might need to wait until the end of 2027 or early 2028 to discover whether he will finally pay a price for leaving them out of pocket. I know this will irk many former Woodford investors because they have repeatedly told me they have waited too long for him to get his comeuppance. They feel let down on many levels. First, by Woodford's risky management of a fund labelled as a plain vanilla UK equity income fund – skewing the portfolio towards smaller illiquid stocks. Most investors bought the fund on the understanding they were getting exposure to a basket of dividend-friendly UK blue chip shares, the strategy that proved so successful for Woodford investors when he previously ran money for Invesco Perpetual. Secondly, by an inadequate £235 million redress scheme arranged by the FCA which still left most investors nursing big losses. Thirdly, by the fact that while the FCA has been looking into Woodford, he reinvented himself as an investment strategist, inviting people to pay for details of portfolios designed to deliver income, growth or a mix of the two. It's a business which currently sits outside the financial regulatory framework. And of course, finally, by the regulator's protracted probe into Woodford's management of the fund in the run up to its suspension. Many Woodford victims will not like to hear this, but even if the FCA's decision is upheld it is likely the bulk of the fines will never be paid. Woodford Investment Management, a limited company, might have generated big profits in the past – and regularly paid Woodford and his colleague Craig Newman multi-million-pound dividends – but it now has barely two pennies to rub together. Unaudited financial statements for the year to the end of March 2024 indicate that it has net liabilities of £230,028. In other words, its debts exceed its assets – and it does not have the financial wherewithal to pay a £4 million fine, let alone a £40 million one. The £5.9 million personal fine shouldn't be a problem – and it's interesting that Woodford has just put his Salcombe bolthole on the market for £10 million. Yet there is a possibility Woodford might not end up having to pay a penny. Miller, the founding partner of wealth manager SCM Direct and previously with both Jupiter and New Star, has been a long-term critic of the way Woodford ran the Equity Income fund. But he believes Woodford's lawyers may well be able to pick holes in how the regulator has arrived at its decision. He says the illiquidity of Woodford Equity Income's portfolio was not just an issue 'between 31 July 2018 and 3 June 2019' – the time period used by the FCA to base the fines on. It went back even further. For example, at the end of December 2014, according to the fund's own accounts, 30 per cent of the portfolio were in illiquid assets, compared to 5 per cent for the Invesco Perpetual High Income fund that Woodford previously managed. Miller says: 'The fund was illiquid from day one, which begs the question: why didn't anyone – the regulator or the fund's overseer Link – do anything about it?' He also says that there are a number of small cap UK funds open today which have highly illiquid portfolios. These issues, Miller says, could help Woodford in his quest to get the FCA's decision overturned. A travesty, but one of the regulator's making. Last Wednesday, in the wake of the announcement from the FCA on the intended fines, I asked to speak to Neil Woodford to get his side of the story, but I was met with a wall of silence. No surprise there. Six years ago the same happened when I drove to his company's head office in Oxford at the crack of dawn to confront him in the wake of the fund's suspension. Although I was standing outside his offices when he arrived at 7am in a swish black Audi, he sneaked in before I could get anywhere near him – the company's facilities manager at the time had just ordered me and my photographer to leave because we were on private property. He might think silence is golden. I think he should pay a price for the way he let down his investors. But I'm not banking on it.
The Sun
10 hours ago
- The Sun
First pic of Man Utd's new-look Old Trafford VIP stand emerges after fan backlash and protests
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The Herald Scotland
19 hours ago
- The Herald Scotland
Scotland small-group tours firm Rabbie's eyes global growth
Hazel Rickett Job title: CEO at Rabbie's Tours. What is your business called? Rabbie's Tours Where is it based? Headquarters in Edinburgh. Departure points across the UK and Europe including Edinburgh, Glasgow, Inverness, Aviemore, Aberdeen, Dublin, Killarney, London, Bristol, Bath, Manchester, Rome, Milan, Catania, Madrid, Barcelona, Lisbon and Zurich. What does it produce/do? Small group tours guided by story tellers To whom does it sell? Our typical guest is curious and open-minded, they don't just want to see a place - they want to understand it, meet the people, hear their stories, and come home with experiences worth sharing. Eighty percent of our guests are international and mainly from North America, Australia and Europe. What is its turnover? Turning over approximately £30 million a year. How many employees? 297 employees. What attracted you to your current role? I've always loved travel, and being part of a team that's passionate about creating amazing experiences just felt like the perfect fit. What were you doing before? I am a trained botanist so don't ask me how I ended up as a Rabbie's driver guide! I was one of the first driver guides hired at Rabbie's, which I think has helped me to reach the point I am at today. Before that I had been travelling and working in various places around the world from a cloud forest in Costa Rica to an insurance firm in Australia! What do you least enjoy? Some of the admin - no surprise there. But even that can be weirdly rewarding sometimes! What do you consider to be the main successes of the business? Definitely our tours, our team, and the positive culture we've built. There's a real pride in how we look after each other, our communities and our customers. What are your ambitions for the firm? I'd love to see Rabbie's small-group tours running all over the world, helping people discover the hidden gems and local stories that make travel so special. What are the challenges facing the sector and market, and what could be done to overcome or address these? I'd love to have a magic wand and make the world a more peaceful place. Global uncertainty can impact travel, but all we can do is stay adaptable, keep looking after our people and customers, and focus on what we do best. Read more What single thing would most help? Having that magic wand! But short of that, a bit more certainty in the world wouldn't go amiss, it'd make planning (and sleeping!) a whole lot easier. What is the most valuable lesson you have learned? Be true to yourself, trust your instincts, and stick to your values. What was your best moment? Taking my first tour and seeing that the customers had actually enjoyed it! And being asked by Robin [Worsnop], the founder, to lead the company in 2013 was a real honour. What has been your most challenging moment in life or business? Navigating the company through the Covid pandemic. How do you relax? I run, garden, swim in the sea, and spend time with friends and family. What phrase or quotation has inspired you the most? Live for the day! What is the best book (fiction or non-fiction) you have ever read? Why is it the best? The Nightingale. It's beautifully written and a powerful reminder of the strength and resilience of women in the toughest of times. Where do you find yourself most at ease? When I'm out in nature or surrounded by friends and family. If you weren't in your current role, what job would you most fancy? Something outdoors and adventurous - anything that lets me explore new places and meet interesting people. What countries have you most enjoyed travelling to, for business or leisure, and why? I loved travelling around South and Central America, the wildlife, scenery, and culture are fascinating. And the beaches in India and Thailand are absolutely breathtaking.
