Starbucks Half-Year Report 2024

“In a highly challenged environment, this quarter’s results do not reflect the power of our brand, our capabilities or the opportunities ahead,” commented Laxman Narasimhan, chief executive officer. “It did not meet our expectations, but we understand the specific challenges and opportunities immediately in front of us. We have a clear plan to execute and the entire organization is mobilized around it. We are very confident in our long-term and know that our Triple Shot Reinvention with Two Pumps strategy will deliver on the limitless potential of this brand,” Narasimhan added.

“While it was a difficult quarter, we learned from our own underperformance and sharpened our focus with a comprehensive roadmap of well thought out actions making the path forward clear,” commented Rachel Ruggeri, chief financial officer. “On this path, we remain committed to our disciplined approach to capital allocation as we navigate this complex and dynamic environment,” Ruggeri added.

Highlights

• Global comparable store sales declined 4%, driven by a 6% decline in comparable transactions, partially offset by a 2% increase in average ticket
• North America and U.S. comparable store sales declined 3%, driven by a 7% decline in comparable transactions, partially offset by a 4% increase in average ticket
• International comparable store sales declined 6%, driven by a 3% decline in both comparable transactions and average ticket; China comparable store sales declined 11%, driven by an 8% decline in average ticket and a 4% decline in comparable transactions
• The company opened 364 net new stores in Q2, ending the period with 38,951 stores: 52% company-operated and 48% licensed
• At the end of Q2, stores in the U.S. and China comprised 61% of the company’s global portfolio, with 16,600 and 7,093 stores in the U.S. and China, respectively
• Consolidated net revenues declined 2%, to $8.6 billion, or a 1% decline on a constant currency basis
• GAAP operating margin contracted 240 basis points year-over-year to 12.8%, primarily driven by deleverage, incremental investments in store partner wages and benefits, increased promotional activities, lapping the gain on the sale of Seattle’s Best Coffee brand, as well as higher general and administrative costs primarily in support of Reinvention. This decline was partially offset by pricing and in-store operational efficiencies.
• Non-GAAP operating margin contracted 150 basis points year-over-year to 12.8%, or contracted 140 basis points on a constant currency basis
• GAAP earnings per share of $0.68 declined 14% over prior year
• Non-GAAP earnings per share of $0.68 declined 8% over prior year, or declined 7% on a constant currency basis
• Starbucks Rewards loyalty program 90-day active members in the U.S. totaled 32.8 million, up 6% year-over-year