Consumers walk in front of a Starbucks coffee shop in Galeria Krakowska shopping mall in central Krakow, Poland, on July 11, 2025.Dominika Zarzycka | Nurphoto | Getty Images
Starbucks has just reported its sixth straight quarter of falling same-store sales, but CEO Brian Niccol is staying optimistic. He says the company’s turnaround efforts are actually ahead of schedule—even though that progress isn’t fully visible in the numbers yet.
Niccol, who successfully led Chipotle through its food safety crisis years ago, shared in a video message that Starbucks is gaining momentum. “The signs are clear — we’re making progress,” he said.
Despite the sales dip, investors were encouraged. Starbucks shares jumped 4% in after-hours trading.
Quarterly Results Highlights (for the quarter ending June 29):
- Earnings per share: 50 cents (adjusted), though not directly comparable to the expected 65 cents.
- Revenue: $9.5 billion (higher than the $9.31 billion Wall Street expected).
- Net income: $558 million, down from $1.05 billion a year ago.
- Same-store sales: Dropped 2% globally (worse than the 1.3% decline predicted).
- North America: Same-store sales fell just 2% (better than the expected 2.5% drop).
What’s Changing at Starbucks?
To win back customers, Starbucks is betting big on hospitality. It’s speeding up the rollout of a new initiative called the “Green Apron Service,” which focuses on more personal customer interactions. According to company leaders, early testing shows it works.
Also in the pipeline:
- Fewer new stores — the focus is now on upgrading existing locations.
- Bringing back seats — to make cafés more inviting again after years of prioritizing mobile and drive-thru orders.
- Better engagement — in the U.S., employee morale is improving, customer connection scores are rising, and transactions from non-reward customers are bouncing back.
On college campuses, Starbucks stores are seeing more foot traffic too—an encouraging sign that Gen Z is still interested in the brand.
What’s Happening in China?
China, Starbucks’ second-largest market, finally saw same-store sales rise by 2%—its first increase in 18 months. While transactions were up 6%, the average amount spent per order went down. Starbucks has been slashing drink prices there to compete with cheaper chains like Luckin Coffee.
CEO Niccol said the company is reviewing offers from over 20 interested parties for a potential stake sale in its China business, which could be valued up to $10 billion. Still, he emphasized that Starbucks wants to keep a “meaningful” piece of the business.
What’s Next?
Chief Financial Officer Cathy Smith warned that the current consumer environment is still uncertain, and the upcoming quarter may look a bit soft. But she’s excited about new products and the return of fall favorites like the Pumpkin Spice Latte.
Starbucks also plans to:
- Invest $500 million in labor over the next year, largely to support its new hospitality push.
- Launch new items in 2026 like protein cold foam, coconut-water drinks, upgraded food options, and a revamped app and Rewards program.
- Host an Investor Day in fiscal Q2 of 2026 to share more about its future plans.
While the road to recovery isn’t over yet, Starbucks is making bold moves to reconnect with both employees and customers—and the early signs are encouraging.
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