Demand is rebounding at Starbucks, indicating that CEO Brian Niccol’s recovery efforts are working.
The company reported Wednesday that sales at North American stores open at least a year increased 4%. This growth was primarily driven by a 3% increase in purchases from existing customers and a 1% increase in the average amount spent per transaction. This is the first increase store sales over eight quarters.
Globally, in-store sales also increased by 4%, with existing customers purchasing more and spending slightly more per purchase.
STARBUCKS OFFERS CHANGES, INCLUDING FREE REFILLS; Bring back the condiment bars
The global coffee chain, which overhauled its strategy and launched a turnaround plan under Niccol in September 2024, beat Wall Street expectations for sales and revenue, but missed estimates for earnings, known as earnings per share.
The company reported revenue of $9.9 billion on Wednesday and reinstated its full-year guidance. Starbucks stock is up $16.24 so far this year, an increase of 19.34%.
People walk past a Starbucks coffee shop in Manhattan, New York, United States, January 15, 2025. (Mostafa Bassim/Anadolu via Getty Images / Getty Images)
The company will hold its first investor day under Niccol’s leadership in New York on Thursday, as he pushes the chain to return to its coffeehouse roots and encourage customers to stay rather than rush out.
STARBUCKS CANCELS OPEN BATHROOM POLICY
“Our first quarter results demonstrate that our ‘Back to Starbucks’ strategy is working and we believe we are ahead of schedule,” Niccol said in a statement. “It’s great to see sales momentum driven by more customers choosing Starbucks more often, and that’s just the beginning.”
Niccol said, even before its latest results, that the company was ahead in its turnaround plan.
Starbucks CEO Brian Niccol watches the Golden Bear Pro-Am before the Memorial Tournament presented by Workday 2025 at Muirfield Village Golf Club on May 28, 2025 in Dublin, Ohio. (Michael Reaves/Getty Images/Getty Images)
In September, Niccol told FOX Business that the coffee chain was “ahead of schedule” in its turnaround, while acknowledging that the work was far from done.
THE NEW STARBUCKS STRATEGY: WILL CEO BRIAN NICCOL’S PLAN WORK?
Niccol is banking on an “aggressive” redesign, an enhanced rewards program and a range of new food and drink products to boost and reverse declining traffic.
While this isn’t Niccol’s first turnaround, as he helped Taco Bell and Chipotle weather their own storms, he became Starbucks’ third CEO in two years, inheriting a company that has faced pressure from unionization drives across the country and consecutive disappointing fiscal quarters traffic having decreased a year ago.
A Starbucks employee enjoys a drink at the Detroit Metropolitan Airport in Michigan. (Jim West/UCG/Universal Images Group via Getty Images / Getty Images)
Starbucks stores in the United States continued to see a decline in store visits at a time when broader environmental factors have caused consumers to be more mindful of where they spend their money.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
But Niccol emphasized his confidence in the company’s trajectory, noting that several initiatives have been rolled out more quickly than initially expected, including a new protein menu planned for late September and the Green Apron Service model. This service model leverages tools like Smart Queue to sequence orders across mobile pickup, drive-thru and cafe so they don’t compete with each other, reducing wait times for customers.
