Starbucks reported Q4 fiscal year 2024 consolidated net revenues of $9.1 billion, a 3% decrease year-over-year. Global comparable store sales declined by 7%, driven by an 8% decrease in transactions, partially offset by a 2% increase in average ticket. U.S. comparable store sales fell 6%, with a 10% transaction decline.
China comparable store sales experienced a 14% decline, attributed to intensified competition and a soft macro environment. Consolidated operating margin contracted by 370 basis points to 14.4%, and diluted earnings per share were $0.80, down 24% from the prior year.
In response to these results, Starbucks suspended its full fiscal year 2025 guidance to allow for a thorough assessment of the business and solidification of strategic initiatives. CEO Brian Niccol introduced the 'Back to Starbucks' strategy, focusing on reintroducing the brand, enhancing customer experience, reestablishing the community coffeehouse, and ensuring Starbucks is a top employer.
Despite the financial pressures, the Board approved a quarterly cash dividend of $0.61 per share, marking the 14th consecutive annual increase. This commitment to shareholder returns, alongside strategic investments in labor, marketing, technology, and stores, aims to stabilize the business and position it for long-term growth.
Key initiatives announced include bringing back condiment bars, reintroducing ceramic mugs, expanding free refills to non-Starbucks Rewards customers, and implementing a new Coffeehouse Code of Conduct. The company also plans to reduce the number of new stores and renovations in fiscal year 2025 to support a redesign and unlock capital for the broader turnaround.
For the full fiscal year 2024, net revenues increased 1% to $36.2 billion, with an operating margin of 15% (a 110 basis point contraction) and diluted EPS of $3.31 (a 6% decline). The company's efficiency efforts yielded approximately $1 billion in cost reductions, but these were offset by investments and deleverage.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.