Starbucks reports frail quarterly results despite arrival of PSL

It’s been a disappointing commence to Pumpkin Spice Latte period for Starbucks.

The Seattle coffee giant on Tuesday reported weaker-than-expected sales in its financial fourth quarter, which ended Sept. 29. It also said it would suspend financial guidance for its 2025 financial year to provide its recent Chairman and CEO, Brian Niccol, period to assess the business.

The financial results were preliminary. Starbucks plans to release packed results for the July-September period and host a conference call with investors on Oct. 30.

Customer traffic was sluggish in the U.S., where Starbucks saw a 6% decline in same-store sales, or sales at stores open at least a year. The business said expanded fall product offerings such as Iced Apple Crisp Nondairy Cream Chai and more frequent in-app promotions didn’t drive more visits.

The Pumpkin Spice Latte, which returned to U.S. stores on Aug. 22 and is usually a reliable booster of traffic, didn’t seem to assist.

In China, same-store sales fell 14% as consumers pulled back on spending or visited cheaper rivals, Starbucks said.

In a video communication released by the business, Niccol — a former Chipotle CEO who joined Starbucks last month — said Starbucks’ problems are “very fixable and that we have significant strengths to construct on.”

Niccol said Starbucks needs to enhance staffing, remove bottlenecks and simplify operations for its baristas, especially during the morning rush. Mobile ordering should be refined so it doesn’t overwhelm the café encounter, he said. Niccol also said Starbucks needs to simplify its “overly complicated menu.”

“We recognize how to make these improvements, and when we do, we recognize customers will visit more often,” he said.

Niccol said Starbucks plans to transformation its marketing to focus less on Starbucks Rewards customers and more on highlighting the brand’s handcrafted drinks and coffee recent concept.

The business said its profits fell 3% to $9.1 billion in the July-September period. That was lower than the $9.4 billion Wall Street was expecting, according to analysts polled by FactSet.

Starbucks said its adjusted profits fell 24.5% from the same period a year ago to 80 cents per distribute. That also fell short of analysts’ approximate of $1.03 per-distribute profits.