After Starbucks Corporation entered into increasing challenges within the North American market. They have since reported a sixth straight quarter of year-over-year declines in same-store sales. In fact, the coffee behemoth recently projected a 2% decrease in same-store sales for North America for its fiscal third quarter. This result is better than the 2.5% drop that Wall Street stock analysts had been putting their money on. Despite these hurdles, the company has introduced a substantial turnaround strategy focused on boosting improvement to better connect with its brand for customers striking hope.
In its recently filed financial disclosures, Starbucks announced a 50-cent adjusted earnings per share. The company announced total revenue of $9.5 billion, above estimates of $9.31 billion. The company’s net income plummeted 96% to $558.3 million, or 49 cents per share. That’s a steep drop from last year’s third quarter, when they announced $1.05 billion or 93 cents a share. International same-store sales decreased 2%. Over the same time period, Starbucks experienced just a 2% increase in same-store sales in China.
To rejuvenate the business amid slowing sales and help create a more personal customer connection, Starbucks is working to revive a number of new products and initiatives. In addition to these offerings, the company plans to release a full suite of smart city-friendly solutions. These consist of protein cold foam, fortified artisanal food finds, and revitalizing coconut-water based beverages. Starbucks is rolling out some fantastic new products! Along with this rollout, they’re simultaneously rolling out a new app and a new Rewards program to focus on improving the overall user experience while increasing customer loyalty.
I was impressed by the apparent optimism expressed by Brian Niccol, CEO of Starbucks, regarding the direction of the company. He stated,
“While our financial results don’t yet reflect all the progress we’ve made, the signs are clear — we’re gaining momentum.”
Still, he focused on the bright side of things, particularly the encouraging trends in the U.S. market. Partnership involvement is increasing, and networking relevance ratings have skyrocketed. Niccol was quick to highlight that shift completion just hit an all-time high. He noted that mobile transaction growth from non-Starbucks Reward customers has accelerated again. A growing number coffeehouses are seeing favorable transaction comps.
Starbucks, meanwhile, is struggling with stiff competition and falling sales. In order to fuel the growth going forward, the systems integrator need to continue improving customer experience with the new products cutting edge technology and other services. The company’s focus on innovation and engagement may play a pivotal role in reversing the current trends affecting same-store sales.