Starbucks revenues dip 2% to $8.6bn in Q2

Starbucks net revenues declined 2% to $8.6bn (£6.8bn) during the 13 weeks ended 31 March. 

The group’s global sales also declined 4% during the period, with North America and US comparable store sales declining 3%, while international sales declining 6%. 

Net revenues for the North America segment of $6.4bn (£5.1bn) in Q2 FY24 were flat to Q2 FY23, primarily driven by a 3% decline in comparable store sales. This decline was offset by net new company-operated store growth of 5% over the past 12 months, as well as growth in its licensed store business.

Operating income in the North America segment decreased to $1.1bn (£878m) in Q2 FY24 compared to $1.2bn (£957m) in Q2 FY23. 

Net revenues for the International segment declined 5% over Q2 FY23 to $1.8bn (£1.4bn) in Q2 FY24, primarily driven by an approximate 5% unfavourable impact from foreign currency translation and a 6% decline in comparable store sales. Also contributing were lower product and equipment sales to, and royalty revenues from, its licensees. This decline was partially offset by net new company-operated store growth of 12% over the past 12 months.

Operating income in the International segment decreased to $233.8m (£186.6m) in Q2 FY24 compared to $314.7m (£251m) in Q2 FY23. 

During Q2, 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 the period, stores in the US and China comprised 61% of the company’s global portfolio, with 16,600 and 7,093 stores in the US and China, respectively.

Laxman Narasimhan, chief executive officer, said: “In a highly challenged environment, this quarter’s results do not reflect the power of our brand, our capabilities or the opportunities ahead. 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 organisation is mobilised 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.”

Rachel Ruggeri, chief financial officer, said: “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.

“On this path, we remain committed to our disciplined approach to capital allocation as we navigate this complex and dynamic environment.”