Starbucks has returned to growth, celebrating a “milestone quarter”, as the coffee giant’s turnaround plan pays off.
For the 13 weeks to 28 September, global store sales increased 1%, marking the first time in seven quarters that Starbucks has delivered sales growth.
North American store sales fell flat, but international sales rose by 3% as total net revenues for the quarter increased 5% to $9.6bn (£7.2bn).
“We’re a year into our ‘Back to Starbucks’ strategy, and it’s clear that our turnaround is taking hold,” said Starbucks chairman and CEO Brian Niccol. “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.”
The turnaround plan, launched by Niccol in September 2024, aims to boost sales and address issues from long waiting times to frustrated staff.
In the latest update to the strategy, Starbucks unveiled plans to close hundreds of coffee shops and lay off 900 non-retail employees – a plan that is expected to cost around $1bn (£750m) due to severance packages and long-term rental contracts.
While the majority of changes are to be made in the US and Canada, the coffee chain confirmed that an unspecified number of closures would take place in the UK.
Starbucks closed 627 stores over the period. While 90% of these closures took place in North America, 10 UK shops were shut this month.
Across the 52 weeks to 28 September, global store sales declined 1%, with North America experiencing a 2% fall. Sales fell flat across Starbucks’ international business, but full-year net revenues increased 3% to $37.2bn (£28.2bn).
Starbucks CFO Cathy Smith added: “We know this continues to be a multi-year turnaround. We remain focused on driving our topline while managing the costs that are within our control to deliver durable, sustainable growth and long-term shareholder value.”
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