Starbucks Corporation (NASDAQ: SBUX) today announced its preliminary financial results for the 13-week fiscal fourth quarter and 52-week fiscal year ending September 29, 2024. Both fiscal 2024 and fiscal 2023 GAAP results include adjustments that are excluded from non-GAAP results. Please refer to the reconciliation of GAAP to non-GAAP measures at the end of this release for additional details.
For the fourth quarter of fiscal 2024, global comparable store sales declined by 7%, while consolidated net revenues dropped by 3% to $9.1 billion, representing a 3% decline on a constant currency basis. GAAP earnings per share (EPS) came in at $0.80, a 25% decrease year-over-year. Non-GAAP EPS also stood at $0.80, declining by 24% on a constant currency basis.
The results were largely impacted by weak performance in North America, where U.S. comparable store sales dropped by 6%, driven by a 10% decline in comparable transactions, partially offset by a 4% increase in the average ticket size. Despite efforts to stimulate traffic through an expanded product lineup, in-app promotions, and marketing campaigns, the company was unable to boost customer frequency or stem the decline in store traffic, affecting both Starbucks Rewards members and non-members. Additionally, China’s comparable store sales fell by 14%, with an 8% drop in average ticket and a 6% decrease in comparable transactions, influenced by rising competition and a sluggish macroeconomic environment.
For the full fiscal year 2024, global comparable store sales decreased by 2%, while consolidated net revenues rose by 1% to $36.2 billion, also reflecting a 1% increase on a constant currency basis. GAAP EPS for the year was $3.31, down 8% from the previous year, while non-GAAP EPS also came in at $3.31, marking a 6% decline on a constant currency basis. The company’s overall performance was affected by reduced store traffic and customer spending, coupled with a challenging market in China.
Due to the ongoing CEO transition and the current business environment, Starbucks has decided to suspend its guidance for fiscal year 2025. This will allow the company to reassess its strategies and focus on stabilizing the business for long-term growth.
Despite these challenges, Starbucks remains committed to delivering shareholder value. The Board of Directors has approved an increase in the quarterly dividend from $0.57 to $0.61 per share, reflecting confidence in the company’s future growth potential.
“Despite our significant investments, we were unable to reverse the decline in traffic, leading to pressures on both revenue and profitability,” said Rachel Ruggeri, Starbucks’ chief financial officer. “We are developing a turnaround plan, but it will take time. To demonstrate our confidence in the business, we have increased our dividend.”
“Our fourth-quarter results make it clear that we need to fundamentally shift our strategy to return to growth, and that’s what we’re focused on with our ‘Back to Starbucks’ plan,” said Brian Niccol, Starbucks’ chairman and chief executive officer. “Over the past few weeks, I’ve spent time in stores, listening to feedback from partners and customers. It’s evident that Starbucks is a beloved brand, and we need to return to what makes us special—our welcoming coffeehouse atmosphere and the finest handcrafted coffee. Our team is moving quickly, and I’ll share more during our upcoming earnings call.”
Starbucks has also released a video statement from CEO Brian Niccol, available on its investor relations website. The video will remain online until December 5, 2024.
Starbucks plans to release its final Q4 and full fiscal year 2024 financial results after market close on Wednesday, October 30, 2024. A conference call will follow at 2:00 p.m. Pacific Time, and the webcast, including closed captioning, will be accessible on the company’s website. A replay of the call will be available until December 13, 2024.
