Starbucks has reported a smaller-than-expected drop in global comparable sales, offering an early sign that its turnaround efforts may be gaining traction. The coffee giant's same-store sales fell 4% in the fiscal first quarter to 29 December, beating analyst forecasts of a 4.6% decline.
In North America, comparable sales dropped 4%, slightly better than the anticipated 4.7% fall. However, sales in China fell 6%, an improvement from the previous quarter's 14% decline. The company has been implementing changes under new CEO Brian Niccol, who joined in September and has called for a 'fundamental change' in strategy.
Niccol's initiatives include a simpler menu, ceramic cups, refills, condiment bars, and a goal to reduce wait times to under four minutes. Starbucks also recently announced that customers using its cafes in North America must make a purchase. Shares rose 4% in after-hours trading on Wall Street and have gained nearly 30% since Niccol's appointment was announced last August.
'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,' Niccol said. He added that the strategy aims to solve underlying issues, restore brand confidence, and return the business to sustainable, long-term growth.
