Starbucks reported Q1 fiscal year 2025 consolidated net revenues of $9.4 billion, which were flat year-over-year. Global comparable store sales declined by 4%, driven by an 8% decrease in comparable transactions in North America and a 2% decline in both average ticket and comparable transactions internationally.
North America comparable store sales fell 4%, while International comparable store sales also declined by 4%, with China comparable sales specifically down 6%. Consolidated operating margin was 11.9%, contracting 380 basis points from the prior year, and diluted earnings per share were $0.69, a 22% decrease.
Despite these declines, CEO Brian Niccol highlighted early positive responses to the 'Back to Starbucks' strategy. The company saw 40% fewer discount-driven transactions, removed extra charges for non-dairy milk customizations, and observed a shift in sales mix towards coffee and espresso-based beverages.
U.S. category share among Quick Service Restaurants (QSRs) recovered in Q1, following two quarters of decline, and non-Starbucks Rewards customer traffic grew quarter-over-quarter. Starbucks Rewards membership and spend also increased both quarter-over-quarter and year-over-year.
The company reiterated its commitment to not taking further price hikes this year, even as coffee costs are expected to rise. These results indicate that while significant challenges remain, the strategic changes are starting to show 'green shoots' of improvement in customer engagement and operational focus.
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