Starbucks reported a lower than expected fall in comparable sales during the fourth quarter of 2024, an early signs that the coffee chain in difficulties benefits from the efforts of CEO Brian Niccol to rekindle demand.
The company’s shares rose almost 4% in operations after closing and have earned almost 30% since the director’s appointment in August last year.
Niccol, recognized for reliving the Chipotle Mexican Grill chain, has sought to return their roots as cafeteria in the United States to implement a simpler menu, ceramic cups, recharges and condiment bars, in addition to reducing the waiting times In coffee shops less than four minutes.
It has also reduced the offers and discounts of the company and, instead, has sought to expand its marketing beyond the members of its loyalty program.
Starbucks global sales in comparable stores fell 4% in Niccol’s first complete quarter, compared to analysts’ expectations of a 4.6% drop, according to data collected by LSE.
“Investors are looking for early indicators that the transformation is underway. The results were generally in line with expectations, ”said Danilo Gargiulo, Bernstein senior analyst.
The company has also reorganized its senior management. Earlier this Tuesday, Starbucks said that its president of North America, Sara Trilling, and the supply chain director, Arthur Valdez, would leave their positions.
Lee: Starbucks sales would fall again while investors hope to revive demand
The Trilling post will be divided, with the exejecutives of Taco Bell, Mike Grams and Meredith Sandland, becoming head of North American store operations and head of store development, respectively. Niccol was previously a senior executive in Taco Bell before joining Chipotle.
“Brian is surrounding himself with people he trusts. These appointments are fundamental to guarantee the execution of reviews in stores, ”said Gargiulo.
Starbucks, who suspended his projections by 2025 at the end of last year to give Niccol Libertad to carry out his restructuring, has given ground in front of rivals such as Luckin Coffee in China, where comparable sales fell for a fourth consecutive quarter.
Meanwhile, tensions have increased with the union that seeks to organize the baristas of the chain in the United States, since contractual negotiations are prolonging more than expected since they began in February last year.
In December, one of the busiest periods of Starbucks, around 300 stores strike throughout the United States to demand a contract, according to Workers United, the union that represents Starbucks workers.
Lee: Starbucks workers are on strike in three large cities in the US
The union said that it has filed more than 90 complaints for unfair work practices in recent weeks and alleges that the company has backed away in the “way to follow” that announced jointly with the union last year.
Excluding extraordinary elements, Starbucks reported profits per action of 69 cents, exceeding 67 cents estimates.
With Reuters information
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