Starbucks reports better-than-expected quarterly results, focusing on growth initiatives and future outlook.

From CNBC: 2024-07-30 22:18:16

Starbucks reported better-than-expected quarterly results, with revenue falling 0.6% year over year to $9.11 billion and adjusted earnings per share of 93 cents. The company’s stock rose in after-hours trading as the market reacted positively to the news. Analysts reiterated their buy rating after activist firm Elliott Management took a stake in Starbucks.

Despite missing revenue expectations, Starbucks showed signs of improvement in North America, with a 2% drop in comparable store sales, beating estimates of a 2.2% decline. The company implemented a three-part action plan to drive growth, including the rollout of the Siren Craft System in stores. Starbucks saw positive results from its initiatives, leading to increased active U.S. Starbucks Rewards memberships.

Starbucks also faced challenges internationally, with comparable store sales falling 7%, driven by a 14% decline in China. Management highlighted progress in key areas, such as average daily transactions and operating margin, despite intense competition and price wars in the region. The company is exploring strategic partnerships to strengthen its competitive positioning in China and other international markets.

Looking ahead, Starbucks reiterated its guidance for total global revenue growth in the low single digits and adjusted EPS growth flat to up in the low single digits. The company is expected to see total sales increase about 2% year over year and adjusted EPS up 1% year over year, according to FactSet. With Elliott Management’s involvement and strategic initiatives in place, Starbucks aims to improve its operations and drive growth in the coming quarters.



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