Starbucks Posts First US Sales Growth in Two Years as CEO Serves up Grande Vision

When Brian Niccol took the helm of Starbucks in September 2024, becoming its fourth CEO of the 2020s, the former Chipotle boss had a tall (grande, really) order to fill: reverse a worrying sales slump that shareholders hated with an Iced Passion Tango.

On Wednesday, the world’s largest coffee chain reported the first major breakthrough of his tenure. In the fourth quarter, Starbucks ground out its first increase in US same-store sales in two years. A tasseography reading of the coffee grinds on the balance sheet, however, shows the company’s ongoing turnaround remains a delicate corporate balancing act.

Bean Counting

Niccol, who was hired by the Starbucks board as the company’s share price dwindled, suspended financial guidance after taking over. He shifted focus to a “Back to Starbucks” strategy aimed at slashing wait times and improving service to renew customer interest and put the roaster back on a growth trajectory.

On Wednesday, the company reported US same-store sales climbed 4% year-over-year in the quarter, besting Wall Street’s expectations (global same-store sales also rose 4%). Foot traffic at US stores ticked up by 3%, and the amount of money spent per customer ticked up by 1%. These factors helped drive revenue up 6% to $9.9 billion, also ahead of market forecasts.

Naturally, this is good news for Starbucks’ brews, but turnarounds aren’t free: 

• One of Niccol’s key initiatives is hiring more baristas in response to concerns that laggard service during peak hours was hurting sales and traffic. Along with especially high coffee bean inflation and US tariffs, this squeezed earnings: Net profit of $293 million was down 62%, and less than half of analysts’ estimates.
• Starbucks shares finished Wednesday flat, though they are up 13% this year. Investors may be waiting for later today, when Niccol and the executive team are slated to present a long-term plan at the company’s first investor day in over two years.

Waiting on the Plan: Investors will be watching the presentation for any hints about store openings. Starbucks closed hundreds of underperforming locations in the fall, which many analysts reasoned would contribute to better same-store sales figures. Niccol, who has previously said Starbucks could add significantly to its 18,000 US locations, told analysts on an investor call Wednesday that the company has identified “thousands of sites” for potential new openings.