Why did SBUX's earnings beat forecasts in Q1 2025?

Starbucks' earnings beat forecasts in Q1 2025 due to several key factors:

1. **Revenue Outperformance**: Starbucks reported total revenue of $9.4 billion for Q1 2025, which was slightly higher than the analyst estimate of $9.3 billion. This outperformance can be attributed to incremental contributions from new company-operated store openings over the past 12 months, despite a decline in global comparable store sales.
2. **Cost Management**: The company's adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) came to $1.63 billion, beating Wall Street’s $1.50 billion estimates. This indicates effective cost management and operational efficiency, which contributed to the earnings beat.
3. **Strategic Initiatives**: Starbucks has been implementing its "Return to Starbucks" plan, which aims to enhance customer experience and drive sales growth. The company has also been focusing on menu simplification and effective marketing campaigns. These strategic initiatives likely helped in maintaining revenue growth despite challenges in the industry.
4. **International Performance**: Starbucks' international market performance was robust, with revenue rising by 1% to $744 million in China. The company's focus on strategic partnerships and expansion in China is a positive signal for future growth.

In conclusion, Starbucks' earnings beat forecasts in Q1 2025 due to a combination of revenue outperformance, effective cost management, strategic initiatives, and strong international performance. These factors collectively contributed to the company's financial success in the quarter.