Starbucks Sales Decline by 3.2%

Forex reported that Starbucks (NASDAQ:SBUX) Corporation's third-quarter revenue decreased by 3.2% year-over-year to $9.1 billion. The American coffee chain's operating income fell by 23.4% during the quarter to $1.3 billion, while diluted earnings per share dropped by 24.5% to $0.80.

For the entire fiscal year, Starbucks generated $36.2 billion in revenue, which is a 0.6% increase compared to the previous year. Operating income declined by 7.9% to $4.4 billion, and diluted earnings per share decreased by 7.5% to $3.31.

CEO Brian Niccol stated, "My experiences tell me that when we return to our core identity and consistently provide a great experience, our customers will come back. We have a clear plan, and we are moving quickly to get Starbucks back to growth."

On his 51st day as Starbucks CEO, Brian Niccol is grappling with the biggest challenges faced by baristas, customers, and investors. High prices, an excessively complex menu, and service speed are at the top of the to-do list. While visiting key markets like New York, Dallas, and Chicago and speaking with baristas, Niccol mentioned that the chain has failed to listen to its customers in recent years. He added, "It was clear from both our partners and customers that there are things to improve my experience at Starbucks, and frankly, these are things you used to do."

Starbucks announced it will no longer charge for non-dairy milk, which Niccol identified as a significant issue for customers (personally, he prefers a plain Americano or regular black coffee). The chain is also planning to pause price increases while tackling perceptions of value. Niccol stated, "We are absolutely hitting the pause button for this year. Longer-term, you will likely need [a price increase]... I hope inflation remains under control and that you can do more than the traditional 1% to maybe 2% rates."