Starbucks on Tuesday reported financial results for its second fiscal quarter of 2025 that missed Wall Street expectations, accompanied by a fifth consecutive quarter of declining same-store sales. Shares of the company fell in extended trading following the announcement.
The coffee chain reported adjusted earnings per share of 41 cents on revenue of $8.76 billion. Analysts surveyed by LSEG had expected adjusted earnings of 49 cents per share on revenue of $8.82 billion.
Net income attributable to the company was $384.2 million, or 34 cents per share, for the quarter ending April 28, 2025. This figure is halved from the $772.4 million, or 68 cents per share, reported in the same period a year earlier. Excluding restructuring costs, the company earned 41 cents per share.
Net sales for the quarter increased 2% from the prior year, totaling $8.76 billion.
The decline in same-store sales reflects reduced customer traffic, as consumers in its two largest markets, the U.S. and China, seek cheaper coffee alternatives.
Global same-store sales decreased 1% during the quarter, driven by a 2% fall in transactions. The traffic decline was more pronounced in the company's home market.
U.S. locations experienced a 4% drop in transactions, leading to a 2% decline in same-store sales for the region. China's same-store sales remained flat for the period, as growth in transactions was offset by a lower average ticket.
Under CEO Brian Niccol, who assumed leadership in September, Starbucks has been implementing a turnaround plan aimed at improving its U.S. business. The plan, termed "'Back to Starbucks'," focuses on the core coffee offerings and enhancing the customer experience. The company suspended its forecast for fiscal 2025 in October when it began outlining the initial stages of this strategy.
Niccol stated in a video message posted on the company's website that the financial results do not yet show the progress, but he believes the company has momentum with the plan. He added that Starbucks is testing changes and seeing results in its coffeehouses.
