Starbucks Corporation Q4 Results

Starbucks Corporation (NASDAQ:SBUX) reported disappointing fourth-quarter results that fell short of analyst expectations, resulting in a 1.5% drop in shares during after-hours trading. The coffee giant's earnings and revenue declined as it faced challenges in customer experience and traffic.

Financial Highlights

• Adjusted Earnings per Share: $0.80 (missed analyst estimate of $1.03)
• Revenue: $9.07 billion (below consensus forecast of $9.38 billion, down 3% YoY)

Comparable Store Sales

• Global comparable store sales decreased by 7% in Q4.
  • Transactions: Down 8%
  • Average Ticket: Up 2%
• In North America and the U.S.:
  • Comparable store sales fell 6%
  • Transactions down 10%, average ticket up 4%.

Leadership Comments

Rachel Ruggeri, Chief Financial Officer, stated, "Our results do not reflect the strength of our brand. I have confidence in our ability to turn around our business and expect we will return to long-term growth."

Operating Margin

The company's operating margin contracted by 380 basis points YoY to 14.4%, primarily due to:
– Deleverage
– Investments in store partner wages and benefits
– Increased promotional activity

Expansion and Loyalty Program

Starbucks opened 722 net new stores in Q4, ending with a total of 40,199 locations globally. Additionally, the Starbucks Rewards loyalty program reached 33.8 million 90-day active members in the U.S., a 4% YoY increase, remaining flat quarter-over-quarter.

Future Strategy

CEO Brian Niccol admitted the necessity for change, stating, "It is clear we need to fundamentally change our strategy to win back customers. 'Back to Starbucks' is that fundamental change."

Fiscal Year 2024

For the full fiscal year 2024, Starbucks reported:
– Global comparable store sales decline of 2%
– Consolidated net revenues increased by 1% to $36.2 billion.