Starbucks reports first global sales growth in seven quarters as turnaround strategy gains momentum 

USA – Starbucks has reported a return to global comparable store-sales growth for the first time in seven quarters, supported by improving performance in its international markets.  

The coffee chain said international comparable store sales rose 3% during the quarter, driven by a 6% increase in comparable transactions. 

Consolidated net revenues for the period reached US$9.6 billion, marking a 5% increase from the same quarter last year. In North America, net revenues rose 3% year-on-year to US$6.9 billion, though the gain was partially weighed down by softer performance in the licensed store segment. 

Chairman and Chief Executive Officer Brian Niccol stated that the company’s strategic initiatives are beginning to show results. “We’re a year into our ‘Back to Starbucks’ strategy, and it’s clear that our turnaround is taking hold,” he said.  

Niccol, who assumed leadership in September 2024, has prioritized simplifying store operations and improving the customer experience across Starbucks locations. 

As part of its restructuring program, Starbucks recorded a US$1 billion charge during the quarter. The company closed 627 stores, more than 90% of which were located in North America, and reduced its workforce by 900 employees. These actions, while aimed at long-term restructuring, significantly affected profitability. 

Net income attributable to Starbucks fell sharply to US$133.1 million, or US$0.12 per share, compared with US$909.3 million, or US$0.80 per share, in the same quarter a year earlier. The company’s generally accepted accounting principles operating margin dropped 1,150 basis points year-on-year to 2.9%.  

Starbucks attributed the decline primarily to restructuring expenses linked to store closures and organisational streamlining, as well as inflation, higher labor-related investments under its “Back to Starbucks” plan, and deleveraging. 

Starbucks closed 107 net stores in the quarter, ending the period with 40,990 locations worldwide. The United States and China continued to represent the bulk of its global footprint, accounting for 61% of total stores. At the close of the quarter, the U.S. market had 16,864 stores, while China had 8,011. 

Chief Financial Officer Cathy Smith described the three-month period as an important milestone. She said the company remains focused on growing revenue while managing costs to support “durable, sustainable growth and long-term shareholder value.” 

Meanwhile, private equity firm Boyu Capital has emerged as the leading contender in Starbucks’ search for a strategic partner in China, according to Bloomberg. 

 Sources familiar with the discussions indicated that Boyu outbid other competitors, including Carlyle Group Inc., and could acquire a controlling stake valuing the Chinese operations at more than US$4 billion. The parties may take several months to finalize terms, and no agreement has yet been guaranteed. 

A Starbucks spokesperson confirmed strong interest from multiple prospective partners, noting that the company is reviewing five bids, but did not specifically comment on Boyu’s position in the process. 

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