Check out Starbucks’ first Barista Championship winners
Starbucks held its first Global Barista Championship in Las Vegas, featuring baristas from around the world.
Starbucks executives praised the company’s plan for conversion in their third quarter revenue release as sales hovered in response to expectations.
A revenue release on July 29 showed that comparable store sales around the world fell by 2%, and driven by a 2% decrease in transactions buffered due to an average ticket increase of 1%.
Domestic sales fell the same 2%, transactions fell 4%, and average ticket costs increased 2%.
Starbucks Chairman and CEO Brian Nicole said in a revenue call that price increases will be the “last lever I want to pull” as part of the company’s turnaround strategy
Bloomberg reported that analysts surveyed saw global sales as a 0.5% mistake from expectations, and that domestic sales were “slightly better than analysts expected.”
“We’ve had a lot of work to fix and have struggled with the difficulties of building a strong sales foundation, and based on my turnaround experience, we’re ahead of schedule,” Nicole said in the revenue release.
The company said it has opened 308 new stores around the world, ending the quarter with stores that account for 61% in US and China.
China’s comparable store sales increased by 2%, with trading up 6%, average ticket costs down 4%. According to Bloomberg, this is the first domestic sales increase since 2023.
CFO says “Back to Starbucks” has made progress
Starbucks Chief Financial Officer Kathy Smith said the company has made “concrete progress” with its “return to Starbucks” strategy.
“We are focused on providing better growth and durable, sustainable, long-term growth,” Smith added.
Nicole told Reuters in June that it would accelerate the rollout of new staffing and service models for the coffee house chain, aiming to become all-built North American stores by the end of summer.
“The coffee houses are working hard to maintain the right atmosphere,” Nicole said at the company’s annual meeting in March. “We want to invite our customers, show us great coffee, provide a comfortable place to stay and make their visit feel like they’ve been used well.”
The CEO said early testing of the model saw an increase in service times and sales growth without providing details on wire services at the company’s leadership summit in Las Vegas.
Smith said over the phone that the company would spend $500 million on more labor in the company-owned stores.
Other changes based on Niccol, which took the reins in September, include the implementation of an updated dress code that was announced to increase in office work requirements for corporate employees and attacked by unionized baristas in May.
Contributor: Anthony Robredo
