### Starbucks Faces Ongoing Sales Decline, Suspends 2025 Outlook

Starbucks has released preliminary results for its fiscal fourth quarter, revealing continued sales decline as the company scrambles to execute a turnaround strategy. The latest report shows a 3% drop in net sales, totaling $9.1 billion, and adjusted earnings per share of 80 cents—falling short of analysts' expectations.

The coffee chain's same-store sales saw their third consecutive quarterly decline, plummeting 7% worldwide. The North American market, which is integral for Starbucks, experienced a 6% decline in same-store sales, joined by a notable 10% fall in store traffic. Despite investments in frequent promotions and an expanded product range, the U.S. market continues to grapple with decreasing demand.

In China, Starbucks' second-largest market, same-store sales dropped 14%, which the company attributes to increasing competition and shifting consumer behaviors. The soft sales in North America and China underline the challenges faced by the brand in retaining its customer base.

CEO Brian Niccol, who took over the company recent months ago, emphasized a need for strategic changes through the "Back to Starbucks" plan. More details on the plan will be revealed during the company's earnings call on October 30. Niccol, renowned for orchestrating a turnaround at Chipotle, has already initiated steps to reshape Starbucks' future. These include improving the barista experience, focusing on morning service, and bolstering brand identity.

Starbucks has also undertaken organizational changes, appointing former Chipotle executive Tressie Lieberman as its new global chief brand officer, and announcing the retirement of North American CEO Michael Conway. Despite these efforts and a marginal 1% rise in its share price this year, the company has suspended its outlook for fiscal 2025.

Notably, the company has increased its quarterly dividend from 57 cents to 61 cents per share, aiming to reassure investors amid the ongoing transformation. CFO Rachel Ruggeri stated that this move is intended to "provide some certainty as we drive our turnaround."

The final fiscal-fourth quarter earnings will be reported on October 30, shedding more light on Starbucks' performance and future trajectory under its new leadership.