Starbucks’ new CEO, Brian Niccol, has been making headlines for his work-from-home plan and earlier list of priorities. However, after Starbucks surprised investors and analysts with its first earnings report Tuesday evening, private jet travel may be the least of Niccol’s worries.
Starbucks reported declining sales in the US and China that led to annual sales declines for the third consecutive quarter, ended September 29. Now, the company will freeze its financial guidance for the full year. , Starbucks announced in a press release.
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“Despite our heavy investment, we have not been able to reverse the trend of declining traffic, which has led to both of our distresses,” said Starbucks chief financial officer Rachel Ruggeri in our release.
Niccol said the report “makes it clear” that the company needs to “change our strategy to return to growth.”
“People love Starbucks, but I’ve heard from some customers that we’ve gone out of our minds, made it harder to be a customer than it should have been, and that we’ve stopped communicating with them,” said Niccol. said the video message. “As a result, some don’t visit as often, and I think today’s results tell the same story.”
Niccol left his position as CEO at Chipotle to join the coffee chain and will reportedly earn more than $113 million in his first year, including a bonus and stock awards.
Photo by Muhammet Zeyd Karaaslan/Anadolu via Getty Images
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Niccol also noted that the changes are happening quickly, including simplifying “our very complex menu” and adjusting the “price structure.” The company has already changed some of its marketing with ASMR-friendly TikTok ads with coffee-making sounds.
“Starbucks has always been a place where people come together,” says Nicol. “We’re revisiting our stores to make sure we’re offering the services you’d expect from a community coffee shop.”
Starbucks’ full earnings report will be released on October 30.
