Starbucks – What Happened? (DDL Blog on Earnings Call)

DDL uses FSLA to Analyse Earnings Calls

Wake up and smell the coffee

Starbucks Q3 results presentation on 30th July 2024 saw an exchange between the Robert W Baird & Co analyst and the CEO. The questions largely focused on sales performance in the US business and the anticipated rate of growth in Q4 versus Q3.

A very long non-answer involved what was ‘thought’ and ‘kind of improvements’. This lacked commitment and certainty.

The Q4 results of 30th October 2024 noted the “challenged consumer experience”. North American comparable store sales were -6% with a 10% decline in comparable transactions. International sales were down 9%.

Traditionally earnings calls provide forward guidance in the outlook statement to allow the market to assess the growth rate and make investment conclusions. Starbucks outlook statement was “It is clear that we need to fundamentally change our strategy to win back customers”.

In a highly unusual move for such a well-established company the group suspended guidance for 2025.

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