Starbucks’ US sales increase for first time in two years – Financial Times
Starbucks has reported a return to sales growth in its US home market, even as heavy spending to add baristas at cafés weighs on profits.
The world’s largest coffee shop chain on Wednesday said US same-store sales rose by 4 per cent in the three months to December, the first increase in two years and ahead of Wall Street estimates.
The fiscal first-quarter results will be viewed as a positive sign for a turnaround strategy under chief executive Brian Niccol, who has been seeking to improve service, cut down queues and make shops more inviting under a plan he calls Back to Starbucks.
Footfall at US stores rose by 3 per cent in the quarter — evidence that customers are returning — while the average amount spent per purchase increased by 1 per cent.
Starbucks shares rose 4.5 per cent in early morning trade, pushing their gain since the start of the year to 19 per cent.
The company is working to emerge from a slump that started in 2024 and led to an extended period of falling sales. A resulting stock price decline prompted the board to hire Niccol from Chipotle Mexican Grill in September 2024.
Niccol suspended Starbucks’ financial guidance soon after he arrived. In a new financial outlook issued on Wednesday, the company projected that global and US comparable sales would rise by 3 per cent or more in the current fiscal year.
Starbucks is spending $500mn this year to add staff, especially during peak hours when delays frustrated some customers.
Labour costs, inflationary pressures from high coffee bean prices and US tariffs cut Starbucks’ profitability. Its operating profit margin dropped by 2.9 percentage points compared to the same quarter a year earlier, to 9 per cent.
The company expects its adjusted operating margin for fiscal 2026 to improve slightly from the previous year. Executives plan to present their long-term vision on Thursday, when Starbucks holds its first investor day since late 2023.
The chain in September closed hundreds of cafés that Niccol said were underperforming. However, it opened a net 128 new stores in the first quarter, bringing the global total to 41,118, including both those operated and licensed by the company.
Niccol, who has previously said Starbucks had the potential to double the 10,000 US stores it currently operates, told analysts on Wednesday that the company has identified “thousands of sites” for possible expansion. “There is no barrier on unit growth,” he said.
The increase in US customer traffic came despite rolling strikes at some cafés organised by a labour union representing baristas at hundreds of locations. The Workers United union has urged customers to avoid Starbucks during the action.
Revenue increased by 6 per cent to $9.9bn, higher than the $9.7bn forecast of analysts polled by Visible Alpha. Net profit fell by 62 per cent to $293.3mn, well below estimates for $668mn.
Starbucks executives said higher profits would follow an improvement in revenues.
“The strategic investments we are making to fix our operating foundations will take time to flow through to sustainable earnings growth,” Niccol said.
