Turnaround gains traction under CEO Brian Niccol as traffic rebounds in the U.S. and China
Starbucks (SBUX) delivered a key milestone in its turnaround efforts, reporting its first quarter of positive same-store sales growth in the U.S. and North America in two years. For the fiscal first quarter ended December 28, the coffee giant said U.S. and North America comparable sales rose 4%, handily beating Wall Street expectations for a 2% increase.
The improvement was driven primarily by a 3% rise in comparable transactions and a 1% increase in average ticket size, signaling renewed customer engagement. CEO Brian Niccol said the results show the company’s “Back to Starbucks” plan is gaining momentum, pointing to viral marketing moments like the Bearista Cup, healthier food options, and a stronger value proposition resonating with customers.
Starbucks shares jumped more than 5% following the earnings release as investors welcomed the return to growth. The company last posted positive same-store sales in the U.S. and North America in the first quarter of fiscal 2024, making the latest results a notable inflection point.
Internationally, Starbucks also exceeded expectations. Same-store sales in China rose 7%, well above forecasts for a 2.5% increase. Foot traffic climbed 5%, while average ticket size grew 2%. China and the U.S. together account for more than 60% of Starbucks’ global store base. During the quarter, Starbucks sold a majority stake in its China business to Boyu Capital in a transaction valuing the unit at $4 billion, a move Niccol said will support expansion into new cities and strengthen long-term growth.
Globally, same-store sales increased 4% for the second consecutive quarter. While adjusted earnings per share of $0.56 missed expectations, revenue topped estimates at $9.9 billion.
Looking ahead, Starbucks expects full-year same-store sales growth of at least 3% and plans to open 600 to 650 new locations. Management remains focused on menu simplification, health-and-wellness offerings, and cost discipline as the turnaround continues to take shape.
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