A Starbucks turnaround is brewing - but perhaps not quickly enough

By Bill Peters

The coffee chain beat expectations on a key sales metric, but its stock was still moving lower

Starbucks has tried to refurbish its stores.

New drinks and coffee-shop makeovers have helped Starbucks attract consumers, but perhaps not enough to save the company from falling sales in its new fiscal year.

Starbucks (SBUX) said Thursday that it expects revenue to fall around 1% for the fiscal year that ends next September, due mainly to the decision to shift its business in China to a joint venture.

For its September quarter, Starbucks reported adjusted earnings of 80 cents a share. Overall revenue came in at $9.1 billion, down 4% year over year. The company saw a 7.2% rise in same-store sales, or those at established locations.

Analysts polled by FactSet expected adjusted earnings per share of 72 cents for Starbucks's September quarter on revenue of $9.22 billion, as well as a 6% same-store sales gain.

The company's stock was falling nearly 2% in after-hours trading Thursday.

Starbucks shares were up more than 25% so far this year at Thursday's close amid optimism over the company's turnaround plans, which have shown signs of working even as competition from smaller chains increases.

Under CEO Brian Niccol, Starbucks has tried to refurbish its coffeehouses to make them more welcoming, and has also moved to clean up its online ordering and pickup process. However, the company last month said it would close around 250 stores.

Over the summer, items like Energy Refreshers and Unicorn Frappuccinos were popular, and Starbucks plans to test sparkling beverages in some areas. Executives say the chain has also caught on with more Gen Z consumers.

-Bill Peters

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10-29-26 1707ET