Starbucks preliminary results showed sales fell 3% to $9.1 billion, and same-store sales decreased by 7%
Starbucks reported a drop in sales for the third consecutive quarter, underscoring the coffee chain’s struggles in executing its turnaround plan. In a statement, the coffee giant’s less than two-month-old CEO, Brian Niccol, said the company needs to “fundamentally change” its strategy.
Starbucks’s preliminary results showed sales fell 3% to $9.1 billion. Same-store sales fell 7% in the third quarter, while North America saw a 6% decline. Same-store sales in China—its second-largest market—dropped 14%.
New CEO’s plans to change things
Niccol wants to simplify the company’s menu and address complaints about pricing and service. He is prioritizing efforts in the US, Starbucks’ largest market, to boost demand and fix ongoing issues, primarily staffing and timing, to reduce long wait times.
Niccol, who previously led Chipotle through a successful turnaround, is tasked with rebuilding Starbucks’ business.
Despite challenges, the company raised its dividend from 57 cents to 61 cents per share. Shares fell 3% in after-hours trading following the announcement, but the company remains optimistic about its strategy to regain growth.