Starbucks finally brewed up some good news: its North American stores saw same-store sales climb 4% in the fiscal first quarter ended December 28—the first positive growth in that key region in two long years.
The chain, led by CEO Brian Niccol (the man who once made burritos faster than you can say “extra guac”), beat Wall Street’s modest 2% expectations, proving that sometimes returning to basics tastes better than inventing new $8 concoctions.
Investors perked up faster than a double espresso shot, sending shares up more than 7% as the market decided this might not be another false alarm in the endless quest to make lines move and customers smile again.
For a company whose stock had been nursing a hangover from declining traffic, this modest uptick feels like the first sober morning after a rough party—promising, but everyone’s still cautious about the next round.
The numbers tell a quietly triumphant tale. North American same-store sales rose 4%, fueled by 3% more transactions and a 1% bump in average ticket size. Translation: more people are actually showing up, and when they do, they’re not just grabbing the cheapest drip. Globally, same-store sales also grew 4%, beating forecasts, while China—Starbucks’ other caffeine empire—delivered a robust 7% increase, with foot traffic up 5%.
Meanwhile, the company quietly sold a majority stake in its China business to Boyu Capital in a deal valuing it at $4 billion, which sounds less like a retreat and more like a strategic “you handle the heavy lifting while we count the money” move.
Not everything was frothy perfection. Adjusted earnings per share came in at $0.56, a hair below the expected $0.59, proving that even when sales wake up, profits can still hit the snooze button. Revenue, though, topped estimates at $9.9 billion versus $9.65 billion anticipated—enough to keep the accountants from reaching for decaf.
Niccol, the former Chipotle turnaround artist now applying his fast-casual magic to slow-brew coffee, declared the “Back to Starbucks” strategy is working—and perhaps even ahead of schedule. His team has been simplifying menus, speeding up service, and reminding everyone that the place was once famous for coffee, not seasonal sugar bombs.
The result? Customers are returning in slightly larger numbers, loyalty members and casual visitors alike are transacting more, and for once, the siren logo isn’t screaming for help. In a world where everything feels overcomplicated, Starbucks betting on simpler, faster, friendlier coffee appears to be paying its first modest dividend in customer visits.
CFO Cathy Smith chimed in with the financial equivalent of cautious optimism: a clear path to sustainable earnings growth. Investors, apparently tired of hearing about declines, seem willing to believe it—for now.
Leave a Reply