Starbucks has reported positive comparable sales growth for the first time in nearly two years, indicating the early success of the company’s turnaround plans.
For the fourth quarter ended September 28, global comparable store sales increased 1 per cent, marking the first growth in seven quarters. This was primarily driven by higher comparable transactions.
North America and US comparable store sales were flat, with a 1 per cent increase in average ticket offset by a 1 per cent decline in comparable transactions.
This marked an improvement compared to a 2 per cent decline in the third quarter, which management attributed to the momentum built by the ‘Back to Starbucks’ strategy. The company also noted that comparable sales in the market turned positive in September.
International comparable store sales rose 3 per cent, and China comparable store sales increased 2 per cent.
Consolidated net revenues for the quarter rose 5 per cent to US$9.6 billion, extending the 4 per cent increase in Q3.
“We’re a year into our ‘Back to Starbucks’ strategy, and it’s clear that our turnaround is taking hold,” commented Brian Niccol, chairman and CEO.
“Our return to global comp growth and the momentum we’re building give me confidence we’re on the right path to deliver the very best of Starbucks for our customers, partners and shareholders,” Niccol added.
For the full year, comparable store sales still fell 2 per cent, with North America and US down 2 per cent, international markets flat, and China down 1 per cent.
On the bottom line, net earnings dropped 85 per cent to $133 million in the fourth quarter and decreased 50 per cent to $1,8 billion for the full year.
In Q4, Starbucks had 107 net store closures, including 627 stores closures – 90 per cent of which was in North America. This was in line with the restructuring plan announced last month, under which the company would reduce its North America store network by about 1 per cent and cut 900 non-retail partner roles.
At the end of the quarter, stores in the US and China comprised 61 per cent of the company’s global portfolio. These include 16,864 stores in the US and 8011 locations in China.
