Starbucks delivered its first-quarter U.S. and North America same-store sales growth in two years, offering early evidence that a turnaround effort under CEO Brian Niccol is gaining traction.
For its fiscal first quarter ended Dec. 28, the company reported U.S. and North America comparable sales rose 4%, doubling Wall Street expectations for a 2% increase. The gain was driven by a 3% rise in transactions and a 1% increase in average ticket size, marking the strongest domestic performance since early fiscal 2024.
Shares of Starbucks climbed more than 5% following the earnings release, as investors welcomed signs of a rebound after two years of uneven demand and traffic declines in the company’s core U.S. market.
The improved results come amid a series of changes implemented since Niccol took over, including trimming the menu by roughly 25% to 30% and refocusing the brand on speed, value, and product clarity. Management credited recent momentum to viral marketing moments such as the Bearista Cup, expanded healthier food offerings, and a stronger value perception among customers.
Starbucks also posted a better-than-expected quarter in China, its second-largest market. Same-store sales there rose 7%, well above forecasts of about 2.5%. Foot traffic increased 5%, while average ticket size grew 2%. More than 60% of Starbucks’ global store base is now split between the U.S. and China.
During the quarter, the company sold a majority stake in its China business to Boyu Capital in a deal valuing the unit at $4 billion. Starbucks said the partnership is intended to accelerate expansion into new cities and strengthen its long-term position in the Chinese market.
Globally, same-store sales rose 4% for a second consecutive quarter, again topping expectations. Revenue for the quarter came in at $9.9 billion, exceeding estimates of $9.65 billion, though adjusted earnings per share of $0.56 narrowly missed forecasts.
Looking ahead, Starbucks said it expects full-year same-store sales growth of at least 3%, led by comparable growth of 3% or better in the U.S. The company projected full-year earnings in a range of $2.15 to $2.40 per share.
Source: Yahoo! Finance