Starbucks' weak Q4 results despite Pumpkin Spice Latte season

SEATTLE, Washington: Starbucks has had a bumpy start to its popular Pumpkin Spice Latte season, reporting weaker-than-expected sales for its fiscal fourth quarter, which ended on September 29.

The Seattle-based coffee chain revealed disappointing financial results, prompting it to suspend its 2025 financial guidance to give its new Chairman and CEO, Brian Niccol, time to evaluate the company's performance.

Despite the arrival of fall favorites like the Pumpkin Spice Latte and new additions like the Iced Apple Crisp Nondairy Cream Chai, U.S. customer traffic remained sluggish. Same-store sales - a key indicator of performance - declined by 6 percent in the U.S., as expanded fall product offerings and frequent in-app promotions failed to draw more customers.

China, Starbucks's primary market, also experienced a significant downturn. According to the company, same-store sales in the country fell by 14 percent, with consumers cutting back on spending or opting for cheaper alternatives.

Niccol, who previously led Chipotle and joined Starbucks in September, described the company's challenges as "very fixable" in a video message. He outlined plans to address key operational issues, including improving staffing, removing bottlenecks, and simplifying the menu to make barista tasks easier, particularly during the busy morning rush.

Niccol emphasized the need to streamline mobile ordering to avoid disrupting the in-caf experience and said Starbucks would adjust its marketing strategy to focus less on Starbucks Rewards and more on promoting handcrafted drinks and coffee innovations.

Starbucks reported a 3 percent decline in revenue for the quarter, reaching $9.1 billion, falling short of Wall Street's expectation of US$9.4 billion. Adjusted earnings also fell by 24.5 percent to 80 cents per share, missing analysts' forecast of $1.03 per share.

The complete financial results will be released on October 30, when Starbucks will host an investor call to discuss the details.