Starbucks Falls Short in Q2 Fiscal Year 2025 Earnings, Shares Slump
Starbucks Shares Decrease on Falling Short of Revenue and Profit Forecasts
Starbucks (SBUX) has served up a disappointment with its Q2 earnings for fiscal year 2025. The coffee titan reported revenues of $8.76 billion, a 2% year-over-year increase, just nipping at the heels of analyst expectations. This slight miss on the mark sent shares tumbling in extended trading yesterday.
The analyst consensus from Visible Alpha expected a revenue figure of $8.77 billion, and the adjusted earnings per share (EPS) of 41 cents from Starbucks failed to meet the projected 53 cents. Last year, Starbucks posted a non-GAAP EPS of 68 cents.
A dip of 1% in global same-store sales was reported, a steeper drop than the anticipated 0.5% decline. Starbucks attributed this drop to reduced transaction volumes, but tried to sweeten the bitter pill with the mention of higher spending per ticket.
The news comes after the third quarter (or second full quarter) under the helm of CEO Brian Niccol, who's executing a strategic turnaround plan for the coffee chain. Niccol's plan includes revamping cafes, focusing on delivering orders within four minutes, and reinstating the condiment bar.
Niccol remained optimistic, stating, "Improving transaction comps 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 I see more opportunity than I imagined."
Starbucks shares plummeted over 6% in after-hours trading following the earnings report. The stock has lost about 7% so far in 2025 through Tuesday's close.
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Sources:
- Barron's
- Yahoo Finance
- CNBC
- MarketWatch
- Investors might be considering the dip in Starbucks' (SBUX) global same-store sales and the missed EPS projections as a signal to reconsider their investments in the coffee titan's token.
- As Starbucks' Q2 fiscal year 2025 earnings fell short, there has been a drop in trading activity, with shares plummeting over 6% in after-hours trading.
- The revenue of $8.76 billion, a 2% year-over-year increase, may not have impressed analysts, but Starbucks is aiming to regain its liquidity with CEO Brian Niccol's strategic revamping plan.
- In an attempt to address the reduced transaction volumes, Niccol's plan includes ensuring delivery of orders within four minutes and reintroducing the condiment bar.
- While Starbucks reported a 1% dip in global same-store sales, the spending per ticket saw an increase—an effort to compensate for the drop in transactions.
- As the earnings report provides insight into the current business climate, those engaged in finance and investing might want to consider the drop in Starbucks' performance and potential strategies moving forward to optimize their trading.
