Starbucks reports 7% decline on global sales

Starbucks is set to reports its worst decline in sales since 2020, after global store sales declined by 7% for the fourth quarter. 

The company faced significant challenges, with global comparable store sales down by 7% in Q4 and revenues declining by 3% to $9.1 billion.

US sales dropped by 6%, due to a 10% decline in customer traffic, despite efforts to increase average spending like in-app promotions and integrated marketing.

In China, sales fell by 14%, hit by lower consumer spending and increased competition.

For the full year, global sales decreased by 2%, though revenues rose slightly by 1% to $36.2 billion. Starbucks’ GAAP earnings per share for the year was $3.31, down 8%.

The company acknowledged that its marketing and product investments didn't meet expectations, and economic challenges in China further impacted performance.

Strategic reset

Looking ahead, Starbucks has suspended guidance for fiscal 2025 as it undergoes a strategic reset with new leadership. On a positive note, the company increased its quarterly dividend to $0.61 per share, showing confidence in its long-term growth potential.

“Despite our heightened investments, we were unable to change the trajectory of our traffic decline, resulting in pressures in both our top-line and bottom-line. While our efficiency efforts continued to produce according to plan, they were not enough to outpace the impact of the decline in traffic,” commented Rachel Ruggeri, chief financial officer.

“We are developing a plan to turn around our business, but it will take time. We want to amplify our confidence in the business, and provide some certainty as we drive our turnaround. For that reason, we have increased our dividend,” Ruggeri added. 

While Brian Niccol, chairman and CEO commented: “Our fourth quarter performance makes it clear that we need to fundamentally change our strategy so we can get back to growth and that's exactly what we are doing with our ‘Back to Starbucks’ plan. We need to focus on what has always set us apart."

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