Latest news with #turnaround
Yahoo
13 minutes ago
- Business
- Yahoo
Starbucks posts 6th straight quarter of US same-store sales declines as turnaround efforts continue
Starbucks (SBUX) reported a sixth straight quarterly drop in US same-store sales on Tuesday as the company continues to grapple with an uncertain consumer environment and its CEO's turnaround efforts. US same-store sales fell 2%, in line with the prior quarter's drop but less than the 2.5% drop that had been forecast. That was driven lower by a 4% decline in comparable transactions. Wall Street expected a sharper 4.5% decline. Starbucks "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," CEO Brian Niccol, who previously led the turnaround at Chipotle, said in the release. Starbucks stock was little-changed near midday on Wednesday. Global same-store sales fell 2%, more than the 1.5% decline expected, per Bloomberg data, marking an acceleration from the previous quarter's 1% drop. Same-store sales in China rose 2% against forecasts for a 1.4% rise, driven by beverage innovation. The jump was driven by an increase in transactions, which was offset by a decline in the average ticket as the company lowered prices to compete with rival Luckin Coffee (LKNCY). This marks the second straight quarter of positive growth for its operations in China as the company seeks out a partner in the region. Niccol said Starbucks seeks a local partner that shares the same "belief that there's this opportunity to grow" and can set up the brand long-term. Adjusted earnings per share came in at $0.50, missing forecasts for $0.65 per share. Revenue rose 5% to $9.5 billion, more than the $9.3 billion that had been forecast. Read more: Live coverage of corporate earnings Since joining the company last fall, Niccol has tried to change the fortunes of the coffee chain by cutting staff earlier this year and announcing plans this month to require more staff to be in the office four days per week. The company has also incentivized its management team to more aggressively turn around the business, offering executives performance-based stock grants focused on cutting costs. The company plans to prioritize a cozy coffeehouse atmosphere and move away from pickup-focused experiences for customers. Consequently, Starbucks plans to execute small, targeted renovations of its stores, amounting to approximately $150,000 per location, to bring back the thousands of chairs for patrons it took away. For new locations, Niccol said it was able to cut the build cost by roughly 30% and will introduce a new stand-alone prototype in fiscal 2026 that will have 32 seats and a drive-through. As Niccol reassess the store portfolio, there are no plans to change one aspect of Starbucks' past — its cup sizes. "We're not changing anything as it relates to the Grande, the Tall, the Venti that that is unchanged," he told Yahoo Finance, there are "certain dayparts and certain occasions where it may make sense to have different cup sizes." As it introduces new innovation like the Cortado, which comes in a short cup, and new food items, it's likely new packages will be introduced to get the "exact right experience" for customers. Starbucks is also investing $500 million dollars of additional labor hours in its US stores over the next year. The plan is a part of its new operating model, dubbed Green Apron service, which is set to roll out to US locations by mid-August. CFO Cathy Smith called it "a foundational operating model that establishes the repeatable, consistent, scalable standards that we want and need in customer service." So far, transactions, sales, and customer service times have improved based on a pilot of 1,500 stores in eight weeks, Niccol said. Innovation is a key part of its strategy, too. Protein cold foam, set to hit the menu in the fourth quarter, will include 15 grams of protein with no added sugar. The company is also exploring coconut water-based tea and improved artisanal food options. Since Starbucks was ridiculed over its complex menus, Niccol said its approach to innovation has changed. "This innovation is being co-built with our baristas in our stores, versus we build it in the support center, we throw it over the wall, and we hope that our baristas can figure it out, right?" he said. "Those days are over," he added. "We're going to build it with the field and our baristas in store at the start of the process." The company did not provide official guidance for the year, but Smith said, "We are confident that 2026 will continue to improve" as it rolls out its Back to Starbucks strategy and eyes the return of the coveted Pumpkin Spice Latte next month. She added, "Taking into account that we have a lot in flight, combined with the uncertain consumer environment, we are conservative on how the current year-over-year trends will change in the fourth quarter for the US company-operated business." As the coffee giant navigates the current tariff environment, Niccol said that the company is "very much diversified in our coffee buying," adding that it will "has minimal impact in the very near term." When Yahoo Finance asked if it would have to raise prices to offset the impact, he said "we don't have any plans to raise prices," but will "be smart" about if it does need to raise prices in the future. — Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on X at @BrookeDiPalma or email her at bdipalma@ Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 hours ago
- Business
- Yahoo
Starbucks stock drops after US same-store sales fall for 6th straight quarter
Starbucks (SBUX) reported a sixth straight quarterly drop in US same-store sales on Tuesday as the company continues to grapple with an uncertain consumer environment and its CEO's turnaround efforts. US same-store sales fell 2%, in line with the prior quarter's drop but less than the 2.5% drop that had been forecast. That was driven lower by a 4% decline in comparable transactions. Wall Street expected a sharper 4.5% decline. Starbucks "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," CEO Brian Niccol, who previously led the turnaround at Chipotle, said in the release. Starbucks stock was down about 2% in morning trade on Wednesday; the stock rose as much as 4% in immediate reaction to the results late Tuesday. Shares of Starbucks are roughly unchanged so far this year. Global same-store sales fell 2%, more than the 1.5% decline expected, per Bloomberg data, marking an acceleration from the previous quarter's 1% drop. Same-store sales in China rose 2% against forecasts for a 1.4% rise, driven by beverage innovation. The jump was driven by an increase in transactions, which was offset by a decline in the average ticket as the company lowered prices to compete with rival Luckin Coffee (LKNCY). This marks the second straight quarter of positive growth for its operations in China as the company seeks out a partner in the region. Niccol said Starbucks seeks a local partner that shares the same "belief that there's this opportunity to grow" and can set up the brand long-term. Adjusted earnings per share came in at $0.50, missing forecasts for $0.65 per share. Revenue rose 5% to $9.5 billion, more than the $9.3 billion that had been forecast. Read more: Live coverage of corporate earnings Since joining the company last fall, Niccol has tried to change the fortunes of the coffee chain by cutting staff earlier this year and announcing plans this month to require more staff to be in the office four days per week. The company has also incentivized its management team to more aggressively turn around the business, offering executives performance-based stock grants focused on cutting costs. The company plans to prioritize a cozy coffeehouse atmosphere and move away from pickup-focused experiences for customers. Consequently, Starbucks plans to execute small, targeted renovations of its stores, amounting to approximately $150,000 per location, to bring back the thousands of chairs for patrons it took away. For new locations, Niccol said it was able to cut the build cost by roughly 30% and will introduce a new stand-alone prototype in fiscal 2026 that will have 32 seats and a drive-through. Starbucks is also investing $500 million dollars of additional labor hours in its US stores over the next year. The plan is a part of its new operating model, dubbed Green Apron service, which is set to roll out to US locations by mid-August. CFO Cathy Smith called it "a foundational operating model that establishes the repeatable, consistent, scalable standards that we want and need in customer service." So far, transactions, sales, and customer service times have improved based on a pilot of 1,500 stores in eight weeks, Niccol said. Innovation is a key part of its strategy, too. Protein cold foam, set to hit the menu in the fourth quarter, will include 15 grams of protein with no added sugar. The company is also exploring coconut water-based tea and improved artisanal food options. Since Starbucks was ridiculed over its complex menus, Niccol said its approach to innovation has changed. "This innovation is being co-built with our baristas in our stores, versus we build it in the support center, we throw it over the wall, and we hope that our baristas can figure it out, right?" he said. "Those days are over," he added. "We're going to build it with the field and our baristas in store at the start of the process." The company did not provide official guidance for the year, but Smith said, "We are confident that 2026 will continue to improve" as it rolls out its Back to Starbucks strategy and eyes the return of the coveted Pumpkin Spice Latte next month. She added, "Taking into account that we have a lot in flight, combined with the uncertain consumer environment, we are conservative on how the current year-over-year trends will change in the fourth quarter for the US company-operated business." — Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on X at @BrookeDiPalma or email her at bdipalma@ Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
5 hours ago
- Business
- Yahoo
VF Corp Jumps After Earnings Beat as Turnaround Takes Hold
(Bloomberg) -- VF Corp. shares soared after the the apparel and shoe company reported fiscal first-quarter earnings that beat Wall Street expectations, signaling that turnaround efforts are beginning to show results. The World's Data Center Capital Has Residents Surrounded An Abandoned Art-Deco Landmark in Buffalo Awaits Revival Budapest's Most Historic Site Gets a Controversial Rebuild San Francisco in Talks With Vanderbilt for Downtown Campus Boston's Dumpsters Overflow as Trash-Strike Summer Drags On The company reported revenue of $1.8 billion, better than the $1.7 billion forecast by a Bloomberg survey of analysts. An adjusted loss of 24 cents was narrower than expectations. VF Corp. said it expects a second-quarter revenue decline between 2% and 4% year-over-year. The company isn't providing detailed full-year guidance as it works on a reset. It said adjusted operating income and operating cash flow will be up this year versus last. The owner of the North Face brand is in the midst of a revamp led by Chief Executive Officer Bracken Darrell, who took the helm about two years ago. He's focused on improving its Vans brand, where sales have been falling. 'We have reset the table and soon will move to growth,' Darrell said in a statement. The company is closing poorly performing Vans stores and trying to pull back on discounting of the brand. Revenue at Vans fell 14% in the most recent quarter versus last year. That's an improvement from the prior quarter. The company said in a presentation that sales of new Vans items, including Super Lowpro and Curren Caples Skate, are increasing. Those gains are offset by sharp declines in its 'icons' products, though. VF Corp. shares rose 14% at 7:05 a.m. in Wednesday premarket trading in New York. The stock had fallen 42% for the year through Tuesday's close. (Updates with additional context in the third and seventh paragraphs. A previous version corrected the day of the premarket move.) Burning Man Is Burning Through Cash It's Not Just Tokyo and Kyoto: Tourists Descend on Rural Japan Everyone Loves to Hate Wind Power. Scotland Found a Way to Make It Pay Off Cage-Free Eggs Are Booming in the US, Despite Cost and Trump's Efforts Russia Builds a New Web Around Kremlin's Handpicked Super App ©2025 Bloomberg L.P. Sign in to access your portfolio
Yahoo
6 hours ago
- Business
- Yahoo
Kering shares rise as market looks past a weak second quarter
(Reuters) -Shares in Kering rose on Wednesday with analysts suggesting investors are looking past another weak quarter of earnings at the luxury goods conglomerate towards hopes for a turnaround. "The market is trying to look forward and anticipate future improvements," Bernstein analyst Luca Solca said, after the Gucci parent reported after Tuesday's market close a 15% drop in quarterly group revenues, falling short of market expectations. In an attempt to revive declining sales and cut debt, Kering has appointed former Renault chief executive Luca de Meo to head of the whole group from September - the first outsider to run the company controlled by the billionaire French Pinault family. It also hired Demna as creative director at its crown jewel business Gucci. Demna will present a new fashion show in March, Kering said, with a full collection shown through a presentation format in September. "The market will likely shift focus to continued cost discipline, the imminent arrival of new CEO Luca de Meo ... and another attempt at relaunching Gucci," said Thomas Chauvet at Citi. Kering shares, which had lost more than 50% of their value since the beginning of last year, were up about 5% by 0927 GMT, making them the second-best performers among France's blue chips. Kering's results on Tuesday showed a 25% decline in second-quarter sales at Gucci to 1.46 billion euros ($1.69 billion). However, it said it saw a slight improvement at the brand going into the third quarter. First-half results showed "early signs of stabilisation at Gucci", UBS analysts said, citing cost control and improvement in retail sales. The analysts added that their estimates would not move down "for the first time in a while." "Although there is still a lot of uncertainty and work ahead ... (the first half) left us feeling somewhat more positive," they said. ($1 = 0.8657 euros) Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Malay Mail
6 hours ago
- Business
- Malay Mail
Starbucks shares rise as CEO Niccol's turnaround plans gains traction
NEW YORK, July 30 — Starbucks shares rose over 4 per cent before the bell on Wednesday as the coffee chain's quarterly strong sales beat signaled that CEO Brian Niccol's turnaround plan was bearing fruit. A simplified menu and investments in store and labor operations were some of the highlights of Niccol's 'Back to Starbucks' initiative since he took the helm in August. The major brand reset follows several quarters of falling sales. 'It seems like the company is planning to be on offense next year once its new operating model is in place,' Morgan Stanley analysts said. Niccol yesterday laid out plans to upgrade the aesthetic design of stores, including a lower cost 'coffee house of the future' design and pledged more than half a billion dollar in investments in thousands of stores across the US next year. 'The goal has shifted from an initial 'Back to Starbucks' to an appropriately ambitious goal for a 'Better Starbucks,' where everyone can experience the best of Starbucks,' JP Morgan analysts said in a note. Tariff uncertainty and elevated inflation have hit US consumer sentiment, forcing some businesses to revamp their strategies. But for Starbucks, the drop in quarterly same-store sales, which refers to sales from stores open for at least 12 months, in its largest North America market was steady at 2 per cent. Meanwhile in China, same-store sales increased 2 per cent amid stiff competition from local rivals like Luckin Coffee and Cotti Coffee. Starbucks has been exploring options such as strategic partnerships and joint ventures for its China business, which was valued at up to US$10 billion (RM42.4 million, according to media reports earlier this month. Following the results, at least five brokerages raised price targets on the stock, while the company trades at a 12-month forward price-to-earnings ratio of 33.28. — Reuters
