Starbucks Same-Store Sales Decline Again, but CEO Niccol Says Turnaround Gaining Pace

Starbucks on Tuesday reported its sixth consecutive quarterly drop in same-store sales. However, Chief Executive Officer Brian Niccol expressed confidence in the company’s turnaround plan, stating that recovery efforts are progressing ahead of schedule.

In a prerecorded statement released alongside the company’s fiscal third-quarter results, Niccol said, “While our financial results don’t yet reflect all the progress we’ve made, the signs are clear, we’re gaining momentum.” Niccol, who previously led a successful turnaround at Chipotle Mexican Grill, took over leadership at Starbucks in late 2024.

Despite the ongoing decline in global same-store sales, Starbucks exceeded Wall Street expectations on revenue. The company reported revenue of $9.5 billion, compared to analysts’ estimates of $9.31 billion, according to LSEG data. Net income fell to $558.3 million, or 49 cents per share, down from $1.05 billion, or 93 cents per share, a year earlier.

Excluding certain items such as restructuring costs, adjusted earnings per share came to 50 cents. The company noted that a one-time tax item and expenses related to a three-day management event reduced earnings by 11 cents per share.

Global same-store sales fell 2% during the quarter, a sharper drop than the 1.3% decline analysts had forecast. However, performance in North America was slightly better than expected. Same-store sales in the region declined by 2%, beating estimates of a 2.5% fall. Although transactions dropped by 3%, the average ticket increased by 1%.

Niccol pointed to several positive indicators in the U.S. market, including increased employee engagement, stronger customer connection scores, and a rise in non-rewards member transactions. He also mentioned that licensed Starbucks locations on college campuses are seeing renewed growth, suggesting improved brand appeal among younger customers.

To support its turnaround, Starbucks is emphasizing in-store hospitality through its newly introduced “Green Apron Service.” The program, which focuses on customer interaction, tested well and is being rolled out nationwide. Starbucks is also shifting strategy by limiting the number of new store openings and investing in improvements at existing locations. This includes restoring seating in cafes that had been removed in recent years due to the rise of mobile and drive-thru orders.

In China, Starbucks’ second-largest market, same-store sales grew by 2% in the quarter, the first increase in more than 18 months. While transactions rose 6%, the average ticket fell. The company has cut prices in China to stay competitive against lower-cost rivals such as Luckin Coffee.

With renewed momentum in China, Niccol revealed that Starbucks is evaluating strategic options for its China business. “We’ve received significant interest from more than 20 interested parties, and we’re evaluating options,” he said, while reaffirming the company’s commitment to maintaining a meaningful stake.

Looking ahead, Chief Financial Officer Cathy Smith said Starbucks is taking a cautious view of the fiscal fourth quarter due to ongoing economic uncertainty. However, she highlighted optimism around upcoming product innovations, including the return of the popular Pumpkin Spice Latte.

Starbucks plans to invest $500 million in labor over the next year, with a portion of that funding the Green Apron Service program. The company withdrew its full-year forecast last October, shortly after Niccol assumed leadership.

For fiscal 2026, Starbucks is planning several new initiatives. These include the launch of protein cold foam, coconut water-based beverages, enhanced food offerings, a refreshed mobile app, and an updated version of the Starbucks Rewards program. The company is also planning to hold an investor day during the second quarter of 2026.

Following the earnings release, Starbucks shares rose by 4% in after-hours trading.