Starbucks has posted a smaller-than-expected decline in comparable sales, offering an early sign that its turnaround strategy may be gaining traction. The world's largest coffee chain reported a 4% drop in global same-store sales for the fiscal first quarter ending 29 December, beating analyst forecasts of a 4.6% decline.
The company is in the midst of a revival bid under new chief executive Brian Niccol, who joined in September and has called for 'fundamental change'. Changes include a simplified menu, reintroduction of ceramic cups, refills and condiment bars, and a target to cut wait times to under four minutes.
In North America, comparable sales fell 4%, slightly better than the expected 4.7% drop. In China, sales declined 6%, an improvement from the 14% fall in the previous quarter. Shares rose 4% in after-hours trading on Wall Street, adding to gains of nearly 30% since Niccol's appointment was announced last August.
Niccol, credited with reviving Chipotle Mexican Grill, said: 'While we're only one quarter into our turnaround, we're moving quickly to act on the 'Back to Starbucks' efforts and we've seen a positive response.' He added that the strategy aims to restore brand confidence and return the business to sustainable long-term growth.
