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Starbucks’ profit fell by half in its latest quarter, in results that reveal the mounting costs of the coffeehouse chain’s turnaround effort.
The US-based company on Tuesday reported a 2 per cent year-on-year increase in quarterly revenue to $8.8bn — in line with expectations — but a 50 per cent slide in net income to $384.2mn. Analysts polled by Visible Alpha had predicted quarterly profits of $551mn.
Global comparable store sales fell 1 per cent, marking a fifth straight quarter of declines. US stores reported 4 per cent fewer transactions year on year.
Under chief executive Brian Niccol, who took charge in September, Starbucks has sought to reverse a sales slump that has now persisted for more than a year.
Niccol, a former Taco Bell and Chipotle Mexican Grill executive, has sought to reduce customers’ wait times, simplify menus and restore the welcoming coffeehouse feel that was lost as more business moved online during the pandemic.
Starbucks said store operating expenses rose 12.1 per cent to $4.2bn in the quarter.
