Starbucks Surpasses Quarterly Sales Expectations Amid Turnaround Efforts

Starbucks released first-quarter earnings for fiscal year 2025, and the results surpassed expectations. The report is an early indication that changes introduced by CEO Brian Niccol might be pushing the coffee chain in the right direction.

For the three-month period that ended Dec. 29, the company reported revenue of $9.4 billion, slightly better than Wall Street projections of $9.3 billion. Same-store sales, which is a measure of sales at locations open a year or more, declined 4%, but the drop was not as drastic as the 5.5% analysts projected. Sales at U.S.-based stores also dropped 4%, and customer transactions were down 8%.

Starbucks management has implemented a strategy to keep its financial momentum moving upward. The major part of this plan is to simplify operations, eliminate inefficiencies, and get the company “back to the core of what makes Starbucks a unique experience.”

“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,” said Niccol, per Kiplinger.

Niccol’s Revamp of Starbucks

To optimize customer service and speed up workflow, customers will see fewer food and beverage menu options in 2025, with nearly a third of current offerings likely to go away. Company-owned stores will get digital menus that allow for quick menu changes throughout the day.

In a recent conference call, Niccol emphasized the need to improve its phone app ordering system. The rapid pace of mobile orders being received leads to barista inefficiencies when trying to serve in-store customers.

“All these orders come flooding in faster than even our customer can get there,” the CEO said, per AP News. “So all these drinks are sitting on the counter, and it’s at the expense of providing any other experience for a customer that’s right in the store.”

Under Niccol’s leadership, the in-store atmosphere and vibe are morphing as Starbucks returns to its old-school roots. The condiment stations are coming back. Baristas will bring back the personalized note on cups, and all customers can now get free refills in-store, even ones that are not Starbucks Rewards members.

Some internal Starbucks corporate changes are happening as well. The Seattle-based coffee company hired the former president of Taco Bell, Mike Grams, as chief stores officer for North America. Meredith Sandland, also a former executive at Taco Bell, is Starbucks’ new chief store development officer.