Starbucks’ holiday season wasn’t as bad as Wall Street expected
The company beat Wall Street’s expectation but still made a lot less money than it did during the same period last year.
Starbucks rose in aftermarket trading after it reported better-than-expected sales and profits for the holiday season.
The company made over $780 million in net income in the last three months of the year, which is 23% less than it made in the same period last year but solidly higher than the $766 million analysts polled by FactSet were expecting. The company’s same-store sales fell by 4%, compared to the 5.5% analysts at Wall Street expected.
Starbucks has struggled with slipping sales for the past year. This report covers the first full quarter since its new CEO, Brian Niccol, has been in charge. Niccol (who has made $96 million already) joined from Chipotle in September.
Investors appear to think this might be a comeback moment for the coffee giant, sending its stock price up almost 4% in after-hours trading.
Niccol attributed the better-than-expected quarter to his “Back to Starbucks” initiative, which includes a no-loitering policy and steps to make stores more homey, like bringing back mugs and handwritten names on cups.
Niccol also announced an executive shake-up earlier on Tuesday, with two executives leaving and two of his former colleagues from Yum! Brands joining under new titles.
Sara Trilling, president of North America, and Arthur Valdez, chief supply and customer solutions officer, are out, and their roles were eliminated.
“As we focus on our ‘Back to Starbucks’ plan, we need a new operating model for our retail team, with clear ownership and accountability and an appropriate scope for each role,” Niccol wrote in a letter.
Mike Grams, who was previously at Taco Bell for 30 years, will serve as “chief store officer” for Starbucks. Grams worked under Niccol when he was CEO of Taco Bell (which is owned by Yum! Brands) from 2015 to 2018.
Meredith Sandland was brought in as “chief store development officer.” Sandland was most recently CEO of Empower Delivery, a company that makes software that helps restaurants manage deliveries. She also crossed paths with Niccol as an executive at Yum! Brands.
