In This Article:
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Revenue: $9.4 billion, flat compared to the prior year.
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Global Comparable Store Sales: Decline of 4%.
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US Comparable Store Sales: Decline of 4% with a 4% ticket growth.
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Operating Margin: 11.9%, a contraction of 380 basis points from the prior year.
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Earnings Per Share (EPS): $0.69, down 22% from the prior year.
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Net New Stores Opened: 377 globally in Q1.
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Store Growth: 7% net new company-operated store growth over the past 12 months.
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Investments Impact: 180 basis point margin pressure from labor investments and 60 basis points from removal of non-dairy milk customization charges.
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Efficiencies: In-store and supply chain efficiencies yielded savings of approximately 150 basis points.
Release Date: January 28, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Starbucks Corp (NASDAQ:SBUX) reported a total company revenue of $9.4 billion for the first quarter of fiscal 2025, meeting their expectations.
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The company has seen a positive response to its 'Back to Starbucks' strategy, which focuses on reintroducing Starbucks as a premier coffeehouse.
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Starbucks Rewards membership and spend grew both quarter over quarter and year over year, indicating strong customer engagement.
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The company is investing in technology and staffing to improve efficiency and customer experience, including a new in-store prioritization algorithm.
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Starbucks Corp (NASDAQ:SBUX) is planning to double its store count in the US, indicating confidence in market potential and growth opportunities.
Negative Points
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Global comparable store sales declined by 4%, with a similar decline in the US market, indicating challenges in driving same-store sales growth.
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The company's operating margin contracted by 380 basis points to 11.9%, primarily due to investments in labor and the removal of extra charges for non-dairy milk customizations.
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Starbucks Corp (NASDAQ:SBUX) suspended its full fiscal year 2025 guidance, reflecting uncertainty in the business environment.
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The company is facing challenges with mobile order sequencing, which is causing bottlenecks and impacting customer experience.
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EPS for the first quarter was $0.69, down 22% from the prior year, reflecting deleverage and heightened investments.
Q & A Highlights
Q: Can you discuss the sales improvement seen throughout the quarter? Was it due to comparisons or structural improvements? A: Brian Niccol, CEO: We observed sequential improvement throughout the quarter, driven by a shift from discounting to broad-based marketing efforts that highlighted our coffee's craft and premium experience. This approach resonated with non-Rewards customers, increasing traffic and transactions, particularly in the morning day part. Our partners are embracing the "Back to Starbucks" initiative, enhancing customer experiences.