Starbucks same-store sales fall again, but CEO Niccol says turnaround is ahead of schedule

Starbucks on Tuesday reported its sixth straight quarter of same-store sales declines as the company implements a turnaround strategy.

CEO Brian Niccol said in a statement that the company's comeback is ahead of schedule, based on his past experience, which includes turning around Chipotle Mexican Grill after a series of food-safety scandals.

"While our financial results don't yet reflect all the progress we've made, the signs are clear — we're gaining momentum," Niccol said in a pre-recorded video published with the earnings report. 

Shares of the company rose 3% in extended trading.

Here's what the company reported for the quarter ended June 29 compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

Starbucks reported fiscal third-quarter net income attributable to the company of $558.3 million, or 49 cents per share, down from $1.05 billion, or 93 cents per share, a year earlier.

Excluding restructuring costs and other items, the company earned 50 cents per share. A discrete tax item and a one-time investment hosting the company's three-day event for U.S. store managers weighed on the company's earnings per share by 11 cents.

Net sales rose 4% to $9.5 billion. 

But global same-store sales declined 2%, a steeper drop than estimates of a 1.3% decrease, according to StreetAccount estimates.

However, Starbucks' North American cafes performed better than expected. The chain's North American same-store sales fell 2%, a smaller decline than the 2.5% projected Wall Street, according to StreetAccount. Transactions fell 3%, but average ticket rose 1% in the quarter.

"In the U.S., partner engagement is rising, customer connection scores are up, shift completion is at a record high, non-Starbucks Reward customer transactions returned to growth, and more coffeehouses are delivering positive transaction comps," Niccol said in the video.

And in China, the company's second-largest market, Starbucks reported same-store sales growth of 2% for the quarter. Transactions climbed 6%, but average ticket fell. Starbucks has cut prices for its drinks in China to compete better with lower-priced rivals, like Luckin Coffee.

This quarter marked the first time in a year and a half that the company's China business saw its same-store sales increase. Under pressure from increased competition, a weaker economy and the distraction of the struggling U.S. business, Starbucks has been weighing selling a stake in its China business, which overall could be valued at up to $10 billion, CNBC has previously reported.

Looking ahead to 2026, Starbucks has big plans. Niccol said that the chain will launch protein cold foam, improved artisanal food options, coconut-water based drinks, a new Starbucks app and a "refreshed" Rewards program.