Starbucks projects Q4 revenue and earnings below consensus; global comps fell -7%; suspends FY25 guidance; increases quarterly dividend (96.82 +0.37)
- Co issues downside guidance for Q4 (Sep), sees EPS of $0.80, excluding non-recurring items, vs. $1.03 FactSet Consensus; sees Q4 (Sep) revs of $9.1 bln vs. $9.37 bln FactSet Consensus.
- Global comparable store sales declined -7%.
- Co issues downside guidance for FY24 (Sep), sees EPS of $3.31, excluding non-recurring items, vs. $3.54 FactSet Consensus; sees FY24 (Sep) revs of $36.20 bln vs. $36.48 bln FactSet Consensus.
- Global comparable store sales declined -2%.
- Co noted results were primarily driven by softness in North America's revenues in the quarter, specifically a 6% decline in U.S. comparable store sales, driven by a 10% decline in comparable transactions, partially offset by a 4% increase in average ticket. The accelerated investments in an expanded range of product offerings coupled with more frequent in-app promotions and integrated marketing to entice frequency across the customer base did not improve customer behaviors, specifically traffic across both Starbucks Rewards and non-SR customer segments, resulting in lower-than-expected performance. Additionally, China comparable store sales declined 14%, driven by an 8% decline in average ticket compounded by a 6% decline in comparable transactions, weighed down by intensified competition and a soft macro environment that impacted consumer spending.
- Given the company's CEO transition coupled with the current state of the business, guidance will be suspended for the full fiscal year 2025. This will allow ample opportunity to complete an assessment of the business and solidify key strategies, while stabilizing and positioning the business for long-term growth.
- With a strategic reset underway, the company remains committed to creating shareholder value and is announcing that its Board of Directors approved an increase in the quarterly cash dividend from $0.57 to $0.61 per share of outstanding common stock. The dividend and related increase demonstrates the company's confidence in the long-term growth.