Starbucks shares experienced a downturn in after-hours trading on Tuesday as the company halted its fiscal 2025 outlook amidst a leadership transition under new CEO Brian Niccol. According to Starbucks, this decision provides ample time for a thorough business analysis and establishing firm strategies.
In their preliminary fourth-quarter outcome, Starbucks showed a revenue of $9.1 billion, which records a 3% year-over-year drop. This is below the consensus of market analysts from Visible Alpha. The reported Earnings Per Share (EPS) of 80 cents also fell from $1.06 last year, missing expected earnings of $1.03.
Same-store sales recorded a 7% drop worldwide, with North America experiencing a 10% decline. The fall in U.S. same-store sales was noted as 6%, powered by a 10% fall in equivalent transactions.
Chief Financial Officer Rachel Ruggeri admitted that despite substantial investments, they couldn't reverse the declining traffic, which impacted both their top-line and bottom-line. She stated, "We are formulating a strategy to turnaround our business, but it will take some time."
Subsequently, Starbucks shares dipped by around 4% in after-hours trading on Tuesday following the announcement.