Starbucks shares rise as CEO touts progress in turnaround drive

Published 29/07/2025, 21:38
Updated 30/07/2025, 09:26
© Reuters.

Investing.com - Starbucks reported Tuesday fiscal third-quarter earnings that fell short of estimates as weaker demand dented margins, but the coffee chain touted ongoing progress with its turnaround plan.

Shares of Starbucks (NASDAQ:SBUX) rose more than 4% in premarket U.S. trading following the report.

For the three months ended June 30, Starbucks reported adjusted earnings per share of $0.50 on revenue of $9.5 billion, compared with Wall Street estimates of $0.65 and $9.29 billion, respectively.

Operating margin contracted by 680 basis points to 9.9%. Comparable store sales fell 3%, with North America comparable store sales down 2%.

The company’s ongoing operational overhaul, however, appears to be bearing fruit, it said.

CEO Brian Niccol, who has been tasked with overseeing Starbucks’ turnaround strategy, told analysts in a post-earnings call that the effort was moving along "ahead of expectations."

Niccol has aimed to bolster sales by bringing down production and service times and spending on improvements to the in-store customer experience. Marketing initiatives have also been revamped in an attempt to resonate more with consumers.

Earlier this year, Niccol said that while the financial results have yet to reflect the changes, the plan has shown "real momentum."

(Scott Kanowsky contributed reporting.)

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