On October 30th local time, Starbucks (Nasdaq: SBUX) released its quarterly financial results as of September 29, 2024, as well as its performance for the entire fiscal year 2024. In the fourth quarter, the company's operating revenue was 9.07 billion US dollars, a year-on-year decrease of 3.2%; The net profit attributable to the listed company was 910 million US dollars, a year-on-year decrease of 25.4%. The company's annual revenue for the fiscal year 2024 was 36.18 billion US dollars, a year-on-year increase of 0.6%; The net profit attributable to the listed company was 3.76 billion US dollars, a year-on-year decrease of 8.8%.
In the fourth quarter, Starbucks' sales performance was relatively weak in both the US and international markets.
Among them, Starbucks' global same store sales decreased by 7%, same store sales in North America and the United States decreased by 6%, international same store sales decreased by 9%, and same store sales in China decreased by 14%.
In terms of store count, Starbucks added 722 new stores in the fourth quarter and had 40199 stores at the end of the period.
Starbucks CFO Rachel Ruggeri said, "As we shared last week, our results do not reflect the strength of our brand. I believe we have the ability to turn the business around and expect us to resume long-term growth
Last week, on October 22nd local time, when Starbucks announced its preliminary financial results for this quarter, Rachel Ruggieri said, "Although we have increased our investments, we are unable to change the trend of declining customer traffic, which has put pressure on our revenue and profits. The company is developing a plan to reverse the decline in performance, but this will take time
It is clear that we need to fundamentally change our strategy to win back customers, "said Brian Niccol, Chairman and CEO of Starbucks." 'Returning to Starbucks' is a fundamental change. My experience tells me that when we return to our core identity and continue to provide excellent experiences, our customers will come back. We have a clear plan and are rapidly driving Starbucks' growth
Brian Nichol assumed the position of Chairman and CEO of Starbucks on September 9th. The market is generally optimistic about Nicole's appointment, as Starbucks' stock price surged 24.5% on the day of the official announcement of the change of leadership in August. Since taking office, Nicole has been restructuring Starbucks' leadership and has released an outline of a growth stimulus plan.
Recently, "Starbucks abandons price war" has become a hot topic on Weibo. According to media reports, Starbucks has completely canceled activities such as "buy one get one free" and "50% discount" that were heavily promoted by the former CEO. Since Brian Nichol became the new leader of Starbucks, the company is embarking on a new round of reforms.
Starbucks China stated that this is a policy aimed at the North American market and has nothing to do with the Chinese market.
In the Chinese market, facing strong competitors, although Starbucks' official channels have not directly launched ultra-low price products, Starbucks has indeed increased its promotional efforts this year, such as giving away coupons, launching packages, and frequently launching co branded products. At present, there seems to be no significant change in this trend.
Starbucks' plan to expand into the Chinese market is still underway. In the fiscal year 2024, half of the company's new stores will be located in lower tier cities (third tier and below). The Chinese market saw a net increase of 290 stores in the fourth quarter, entering 78 county-level markets. At the end of this quarter, Starbucks China had a total of 7596 stores, covering nearly 1000 county-level markets.
Starbucks stated that it will accelerate the expansion of its stores in lower tier cities and new county-level markets. In these markets, the business performance of newly opened stores continues to outperform that of newly opened stores in high tier cities.