Latest news with #BrianNiccol
Yahoo
2 hours ago
- Business
- Yahoo
Starbucks Still Needs More Time
Key Points Starbucks posted better revenue than investors had expected, but weakness in comparable sales and an earnings shortfall pointed to ongoing challenges for the coffee giant. CEO Brian Niccol said that he believes the Starbucks turnaround is actually ahead of schedule. Shareholders seem optimistic, but even Niccol warns that investors will likely have to wait until 2026 before seeing dramatic signs of success. These 10 stocks could mint the next wave of millionaires › Here's our initial take on Starbucks' (NASDAQ: SBUX) fiscal third-quarter financial report. Key Metrics Metric Q3 FY 2024 Q3 FY 2025 Change vs. Expectations Total revenue $9.11 billion $9.46 billion +4% Beat Adjusted earnings per share $0.93 $0.50 -46% Missed North America comparable sales -2% -2% unchanged n/a International comparable sales -7% 0% +7 pp n/a Starbucks Sees Its Turnaround Start to Take Shape Expectations have been high that Starbucks will eventually be able to recover from an extended period of weakness and return to its former glory. Yet although those hopes are still there, shareholders will have to stay patient in order to see a true recovery in key business metrics. Starbucks' fiscal third-quarter financial report showed mixed results. Revenue climbed 4% globally, including a 2% rise in North America and a 9% boost in the coffee company's international segment. However, comparable sales were down 2% globally, with a 2% drop in North America offsetting flat comps internationally. Earnings were down by nearly half, as the company cited inflation, labor costs, and the expenses associated with the Back to Starbucks initiative. CEO Brian Niccol urged investors to remain confident. Based on his prior experience in dealing with companies that are turning themselves around, Niccol believes that Starbucks is "ahead of schedule" after having "fixed a lot and done the hard work on the hard things" to get started. Niccol told shareholders to expect a "wave of innovation" next year that should accelerate growth, bring back top customer service, and make the Starbucks experience something to celebrate again. Immediate Market Reaction For their part, Starbucks investors seemed willing to accept Niccol at his word. The stock was up 5% in after-hours trading late Tuesday following the coffee company's quarterly release. Even though Starbucks' earnings miss could potentially have caused problems in investor sentiment, it appears that the company's CEO was successful in buying some extra time for Starbucks to make further progress in its turnaround efforts. What to Watch China was a bit of a bright spot again for Starbucks, with comps climbing 2% year over year. That reversed a serious tailspin for the coffee giant in the East Asian nation in last year's period, and over the past 12 months, Starbucks has opened more than 500 new locations in China. With Niccol essentially asking for leeway until next year before being fully accountable for the success of his turnaround efforts, Starbucks shareholders might not get the answers they want as soon as they want them. For now, investors seem willing to be patient. How long that will last, though, is anyone's guess. Helpful Resources Full earnings report Investor relations page Don't miss this second chance at a potentially lucrative opportunity Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $458,390!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $40,635!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $633,452!* Right now, we're issuing 'Double Down' alerts for three incredible companies, available when you join , and there may not be another chance like this anytime soon.*Stock Advisor returns as of July 29, 2025 Dan Caplinger has positions in Starbucks. The Motley Fool has positions in and recommends Starbucks. The Motley Fool has a disclosure policy. Starbucks Still Needs More Time was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
4 hours ago
- Business
- Yahoo
Starbucks looks to protein drinks and other new products to turn around lagging US sales
Starbucks said Tuesday it's confident that improved store operations and new products — including a cold foam protein drink — will soon help turn around the company's lagging U.S. sales. In the meantime, slow U.S. demand continues to be a drag on the company's results. Starbucks reported that its revenue rose 4% to $9.5 billion in its fiscal third quarter. That was better than the $9.3 billion Wall Street expected, according to analysts polled by FactSet. But same-store sales, or sales at locations open at least a year, fell 2% in the April-June period. That was a bigger decline than Wall Street expected, and it was the sixth straight quarter that the Seattle-based company reported lower same-store sales. Same-store sales were up in China, Starbucks' second-largest market. Starbucks has been looking for a partner that can help it expand in China, particularly in smaller cities. Chairman and CEO Brian Niccol said Starbucks was evaluating around 20 offers. 'We remain committed to our China business and want to retain a meaningful stake,' Niccol told investors during a conference call on Tuesday. 'The intense interest in partnering with us is a testament to the great team, strong brand and long-term opportunity for Starbucks in China. It really is a vote of confidence.' But even as its sales picked up in China, Starbucks' same-store sales in the U.S. fell 2% in in the April-June period. U.S. customers spent more per order, but transactions fell 4%, the company reported. Niccol expressed optimism about a new program setting hospitality standards and staffing levels to better handle peak hours. The 'Green Apron Service' model showed so much promise in an eight-week test at 1,500 stores that Starbucks plans to roll it out across the U.S. starting in mid-August, the company said. New software is also helping stores sequence orders, cutting down on wait times. Niccol said 80% of in-store orders are now made in four minutes or less, a target he set last fall. 'I think we'll become famous for Green Apron Service and be the defining customer service company that I think Starbucks should be,' Niccol said. Niccol said improving store operations and paring back Starbucks' menu was necessary before layering in new products. In addition to protein drinks, Starbucks plans to introduce new baked goods and a new dark roast coffee next year. It will also test beverages made with coconut water, customizable energy drinks, and gluten-free and high-protein foods. Niccol said Starbucks has been working closely with employees to develop new food and drink items that can be prepared quickly and consistently. In the past, he said, the company would often develop new menu items at its headquarters and then hope baristas figured out how to make them. 'Those days are over,' Niccol said. Niccol said Starbucks is also trying to encourage customers to linger in its stores. It's closing or modifying some of its approximately 90 mobile order-only storefronts and it is developing a store prototype with 32 seats and a drive-thru window that costs 30% less than the company's current store design. Starbucks is spending heavily to turn itself around. One big expense in the third quarter was a two-day meeting in Las Vegas where the company hosted 14,000 store managers and regional leaders. The company said its net income fell 47% to $558 million in the April-June period. Adjusted for one-time items, its earnings fell 46% to 50 cents per share for the quarter. That was lower than the 65 cents analysts had forecast. Starbucks shares rose 3% in after-hours trading. Sign in to access your portfolio
Yahoo
4 hours ago
- Business
- Yahoo
The high-protein trend is coming for your Starbucks order
Starbucks' new protein cold foam will be released by the end of 2025, CEO Brian Niccol said Tuesday. The optional topping will bring 15g of protein with no added sugar to "virtually any cold beverage." The new offering taps into the protein coffee trend sweeping TikTok, a marketing strategist told BI. Starbucks may unleash the next wave of protein coffee, or "proffee," posts on TikTok if its new menu item brews up the excitement execs hope it will. The coffee giant plans to release its new protein cold foam by the end of this year, capitalizing on the growing trend of making even your coffee a health drink, popularized by gym bros and Gen Z. "In late Q4, we'll introduce protein cold foam," CEO Brian Niccol told investors during the company's Q3 earnings call on Tuesday. "It taps into what has become one of our most popular modifiers — cold foam, which grew 23% year-over-year. Protein cold foam with no added sugar is an easy way to add 15 grams of protein to virtually any cold beverage. And customers can also add the flavor of their choice." Since debuting cold foam as a topping in 2014, Starbucks has expanded its flavor options to include offerings like vanilla, brown sugar, pumpkin spice, and raspberry cream. Starbucks is in the middle of a revitalization campaign, intending to reverse slumping sales and renew diminished consumer interest. In addition to remodeling stores with ceramic dishes and comfy chairs to encourage visitors to stay longer and bringing back the self-serve condiment bar, Niccol has also aimed to streamline the store's menus, announcing plans to cut 30% of its offerings and changing the pricing structure for add-ons like syrups. In the hourlong call, during which Starbucks announced that it had beat analyst expectations on revenue but missed on earnings, Niccol appeared animated by new protein-focused menu items, mentioning "protein" at least eight times. "As we move further into 2026, expect more experiential beverages and nutritious, satisfying bites for the afternoon day part," Niccol said. "This month, we'll start testing new coconut water-based tea and coffee beverages in select markets, and we'll lean into customer needs with upcoming tests of gluten-free and high-protein options to create food that's as artisanal as our beverages." Michael Della Penna, chief strategy officer at the digital advertising research firm, InMarket, which publishes regular reports on fast-casual restaurant customer loyalty, told Business Insider that the demand for high-protein drinks and food options has been accelerating over the last 3-5 years. A study by Cargill found that more than 60% of Americans increased their protein intake in 2024 — a rise from 48% in 2019. Gen Z, in particular, loves a high-protein option and tends to prefer customizable menu offerings and cold beverages, Della Penna said, making an optional protein add-on like cold foam a perfect blend to capture trending tastes. "The other interesting part of it is the routine that a drink like that can create for a consumer," Della Penna said. "By introducing protein, that's a great way to get a consumer back as they move about their daily lives, particularly when going to work out and then stopping to get a cold brew with a scoop of protein. That creates that sort of repeatable pattern of visitation and purchase that a drink like that can offer to a segment within their customer base." With Gen Z and fitness fans in mind, move over, pink drink — it's protein's time to shine. Have a tip? Contact this reporter via email at Katherine Tangalakis-Lippert at ktangalakislippert@ or Signal at byktl.50. Use a personal email address, a nonwork WiFi network, and a nonwork device; here's our guide to sharing information securely. Read the original article on Business Insider Solve the daily Crossword
Daily Mail
6 hours ago
- Business
- Daily Mail
Starbucks cuts entire line of locations amid sales slump
It was meant to be the future of coffee — order on your phone, skip the line, grab and go. But now, Starbucks is scrapping its pick-up only cafes after admitting the concept fell flat. That means all 90 shuttering after a six year experiment. The decision comes as the coffee giant reported its sixth straight quarter of declining sales. 'We found this format to be overly transactional and lacking the warmth and human connection that defines our brand,' Starbucks CEO Brian Niccol said on the companies second quarter earnings call. Tuesday's call revealed that Starbucks's global sales had declined two percent in the three months ending June 29. It means Americans bought hundreds of millions fewer cups of coffee than the same period in 2024. And it was an even greater drop than the 1.3 percent decline expected by analysts. The coffee company has been in turnaround mode under Niccol for almost a year. However, Niccol's efforts to simplify menus, cut waiting times and make cafe's friendlier have yet to show up in the figures. The axing of pick-up only stores appears to be an attempt to cut unnecessary costs, especially as the company begins an expensive mass hiring spree. The stores were launched with a flashy flagship model in New York in 2019. The 'Starbucks Pick Up' grew into around 90 locations across the country, mostly in downtown areas full of busy office workers. airports and hospitals. Some of these locations will be converted into traditional sit-down Starbucks cafes in the future but it is not yet clear which. Niccol said Starbucks's app 'can deliver the same level of convenience through our community coffeehouses.' Starbucks is also introducing a new 'small format version' of its stores with just 10 seats in New York City. 'We believe this new prototype will deliver an exceptional customer experience, improve unit economics and unlock growth opportunities in more markets,' Niccol said on Tuesday. Niccol has previously claimed he wants to bring back the warmth and personal touch that once made Starbucks a beloved 'third place' between home and work. New CEO Brian Niccol said the stores were 'overly transactional' and 'lacking warmth' Part of that effort has been bringing in comfier chairs, making tables larger and adding power outlets. In addition baristas have been told to bring back writing messages on customers cups to brighten their day. Starting in August Starbucks is beginning a hiring spree to bring its staffing levels back in line with its pre-pandemic era. Five years ago, Starbucks stores averaged 23 employees. Cost-cutting has since trimmed that number down to 18 to 19 — four to five fewer workers per location. Restoring pre-Covid staffing levels would mean hiring between 68,000 and 85,000 people across all US stores. Even focusing solely on the 11,000 company-owned locations, the increase would still be a massive 44,000 to 55,000 hires.
The Independent
10 hours ago
- Business
- The Independent
Why Starbucks is getting rid of mobile-order and pick-up only stores
Starbucks is discontinuing its mobile-order and pick-up only stores, deeming them 'overly transactional' and lacking 'warmth'. This change will affect 80 to 90 locations across the US, with some potentially being converted into seated stores. The move is part of a broader operational overhaul led by CEO Brian Niccol, who aims to foster more customer-friendly environments and improve service. Starbucks plans to invest over $500 million in staffing for its US company-operated stores and is developing a new 'coffeehouse of the future' prototype featuring 32 seats and a drive-through. These strategic adjustments follow six consecutive quarters of sales decline for Starbucks, despite the CEO expressing optimism about the company's recovery.
