Starbucks faces challenges in Q1 but expands global footprint
Overview
Starbucks reported its Q1 2025 results on January 28th, completing its first full quarter under its new CEO, Brian Niccol (previously the CEO of Chipotle), who took charge of the company on September 9, 2024 (he has been heavily criticized for his pay package ever since then). The company reported net revenues of $9.4bn, roughly in line with the Q1 2024 figures.
Global comparable store sales declined -4% year-on-year, mainly driven by a decline in comparable transactions (-6% year-on-year), although partially offset by a +3% increase in average tickets.
In terms of global exposure, Starbucks further increased its store count, opening 377 new stores in Q1, bringing the total number of stores to 40,576 globally. Still, the stores are still mainly concentrated in the US (17,049) and China (7,685).
In terms of financial performance, Starbucks is struggling under the new management, as its financial results have materially deteriorated year-on-year.
Group
- Net revenues of $9.4bn down -0.3% year-on-year (vs. $9.4bn in Q1 2024)
- Operating income of $1.1bn down -24.5% year-on-year (vs. $1.5bn in Q1 2024)
- Net income of $780m down -23.8% year-on-year (vs. $1bn in Q1 2024)
- Diluted EPS of $0.69 down -23.3% (vs. $0.90 in Q1 2024)
North America
- Net revenues of $7.1bn down -0.7% year-on-year (vs. $7.1bn in Q1 2024)
- Operating income of $1.2bn down -22.3% year-on-year (vs. $1.5bn in Q1 2024)
- Operating margin of 16.7% in Q1 2025 (-470%pts vs. Q1 2024)
- Change in comparable store sales down -4% year-on-year, of which:
- -8% change in transactions
- +4% change in ticket
- Store count of 18,537 up +3% year-on-year (vs. 17,931 in Q1 2024)
International
- Net revenues of $1.9bn up +1.4% year-on-year (vs. $1.8bn in Q1 2024)
- Operating income of $237m down -1.8% year-on-year (vs. $241m in Q1 2024)
- Operating margin of 12.7% in Q1 2025 (-40%pts vs. Q1 2024)
- Change in comparable store sales down -2% year-on-year, of which:
- -2% change in transactions
- -2% change in ticket
- Store count of 22,039 up +7% year-on-year (vs. 20,656 in Q1 2024)
Author: János-Levente Bereczki
