Starbucks Suspends 2025 Outlook After Reporting Weaker Traffic and Earnings
Seattle-based companies are no strangers to dreary, windy, and wet conditions — but this year, a few were caught unprepared. Last week, Boeing pre-announced its earnings and outlined plans to lay off 17K employees as part of a cost-cutting campaign. This week, Starbucks — another Emerald City gem — surprised investors by unexpectedly pre-announcing its own earnings, signaling that things are not improving for the coffee chain.
- Starbucks shared that its promotions and discounts to attract customers weren’t working — global comparable sales dropped 7% year-over-year in Q3, compared with the 3-4% decline analysts had projected.
- The company’s revenue fell 3% YoY, and earnings dropped 25%, leading Starbucks to suspend its full-year 2025 earnings outlook — right as its fiscal year began on Oct. 1.
More bitter than espresso: This marks the third consecutive quarter of declining same-store sales, with the 7% YoY drop being the steepest since the pandemic. In North America, its all-star market, traffic fell by 10% — and one analyst pointed out that Starbucks’ US traffic is now worse than during the 2008 Financial Crisis. This will be a central priority for new CEO Brian Niccol, who took over on Sept. 9, even as the company contends with a 14% sales drop in China, its second-largest market.
