Starbucks Sees Store Sales Fall 1%, Net Revenues Rose 2% in Q2
CoffeeNetwork (New York) - Starbucks Corporation (Nasdaq: SBUX) today reported financial results for its 13-week fiscal second quarter ended March 30, 2025.
Q2 Fiscal Year 2025 Highlights
- Global comparable store sales declined 1%, driven by a 2% decline in comparable transactions, partially offset by a 1% increase in average ticket
- North America comparable store sales declined 1%, driven by a 4% decline in comparable transactions, partially offset by a 3% increase in average ticket; U.S. comparable store sales declined 2%, driven by a 4% decline in comparable transactions, partially offset by a 3% increase in average ticket
- International comparable store sales increased 2%, driven by a 3% increase in comparable transactions, partially offset by a 1% decline in average ticket; China comparable store sales were flat, driven by a 4% increase in comparable transactions, offset by a 4% decline in average ticket
- The company opened 213 net new stores in Q2, ending the period with 40,789 stores: 53% company-operated and 47% licensed
- At the end of Q2, stores in the U.S. and China comprised 61% of the company’s global portfolio, with 17,122 and 7,758 stores in the U.S. and China, respectively
- Consolidated net revenues increased 2% to $8.8 billion, or a 3% increase on a constant currency basis
- GAAP operating margin contracted 590 basis points year-over-year to 6.9%, primarily driven by deleverage and additional labor primarily in support of “Back to Starbucks.” Also contributing were restructuring costs related to simplifying our global support organization.
- Non-GAAP operating margin contracted 460 basis points year-over-year to 8.2%, or contracted 450 basis points year-over-year on a constant currency basis
- GAAP earnings per share of $0.34 declined 50% over prior year
- Non-GAAP earnings per share of $0.41 declined 40% over prior year, or declined 38% on a constant currency basis
“My optimism has turned into confidence that our 'Back to Starbucks' plan is the right strategy to turn the business around and to unlock opportunities ahead,” commented Brian Niccol, chairman and chief executive officer. “Improving transaction comp in a tough consumer environment at our scale is a testament to the power of our brand and partners getting 'Back to Starbucks.' We are on track and if anything, I see more opportunity than I imagined,” Niccol added.
“While our financial results are far from Starbucks potential, we are working to build back a better business,” commented Cathy Smith, chief financial officer. “We are developing new muscles to test, iterate and scale quickly, in service of long-term, durable growth and strong returns on invested capital,” Smith added.
Net revenues for the North America segment increased 1% over Q2 FY24 to $6.5 billion in Q2 FY25, primarily due to net new company-operated store growth of 5% over the past 12 months. This increase was partially offset by a 1% decline in comparable store sales, driven by a 4% decline in comparable transactions, partially offset by a 3% increase in average ticket. Also contributing was a decline in our licensed store business.
Operating income decreased to $748.3 million in Q2 FY25 compared to $1.1 billion in Q2 FY24. Operating margin of 11.6% contracted from 18.0% in the prior year, primarily driven by deleverage and additional labor primarily in support of “Back to Starbucks.”
Net revenues for the International segment increased 6% over Q2 FY24 to $1.9 billion in Q2 FY25, primarily due to net new company-operated store growth of 8% over the past 12 months, an increase in our licensed store business, as well as incremental net revenue from the acquisition of a U.K. licensed business partner. Also contributing was a 2% increase in comparable store sales, driven by a 3% increase in comparable transactions, partially offset by a 1% decline in average ticket. These increases were partially offset by an approximate 2% unfavorable impact from foreign currency translation.
Operating income decreased to $217.0 million in Q2 FY25 compared to $233.8 million in Q2 FY24. Operating margin of 11.6% contracted from 13.3% in the prior year, primarily driven by increased promotional activity and restructuring costs related to simplifying our global support organization, partially offset by leverage.
Alexis Rubinstein
