Starbucks 2025 Q2 Earnings Misses Targets as Net Income Declines 50%
Wednesday, Apr 30, 2025 7:07 am ET
27min read Starbucks (SBUX), ranking 135th by market capitalization, reported its fiscal 2025 Q2 earnings on Apr 29th, 2025. The coffee giant missed analyst expectations, reporting revenue of $8.76 billion, short of the $8.86 billion estimate. Adjusted earnings per share came in at $0.41, below the expected $0.50. Despite the disappointing results, starbucks remains optimistic about future growth, focusing on its "Back to Starbucks" strategy aimed at increasing transaction volumes and enhancing customer experience. While no specific revenue or EPS targets were provided for the upcoming quarters, the company anticipates benefits from ongoing operational adjustments and marketing efforts.
Revenue
Starbucks reported a 2.4% increase in total revenue for 2025 Q2, reaching $8.30 billion compared to $8.11 billion in 2024 Q2. The company-operated stores generated $7.29 billion, licensed stores contributed $1.02 billion, and other revenue sources added $460.60 million, culminating in total net revenues of $8.76 billion.
Earnings/Net Income
Starbucks's earnings per share fell sharply by 50.0% to $0.34 in 2025 Q2 from $0.68 in 2024 Q2, with net income declining by 50.3% to $384.10 million. This significant drop indicates challenging financial performance for the quarter.
Price Action
The stock price of Starbucks has edged up 1.45% during the latest trading day, climbed 3.79% during the most recent full trading week, and tumbled 14.16% month-to-date.
Post-Earnings Price Action Review
Following the release of its earnings report, Starbucks (SBUX) stock demonstrated mixed short-term performance. Historical backtest results indicate a 3-Day win rate of 40%, a 10-Day win rate of 55%, and a 30-Day win rate of 40%. These metrics suggest that the stock tends to perform well shortly after earnings releases, although the gains are not sustained in the longer term. The maximum return observed was 5.10% over 30 days, which highlights the potential for price appreciation post-earnings. Despite the disappointing quarterly results, investors may see short-term opportunities in Starbucks stock, although caution is advised given the volatility and overall downward trend observed month-to-date.
CEO Commentary
Brian Niccol, Chairman and CEO of Starbucks, expressed confidence in the company's strategic direction despite disappointing Q2 results, stating, "Our goal is that every transaction is higher quality and more profitable." He emphasized the importance of a customer-driven culture, noting that "we're not just building back our business, we're building back a better business." Niccol highlighted early indicators of recovery, including increased partner engagement and improved customer experience, while acknowledging challenges in comparable store sales and margins. He reiterated that the company remains focused on investing in partners and operational improvements, declaring, "I'm confident we're building a globally resilient business."
Guidance
Cathy Smith, EVP and CFO, indicated that while the Q2 EPS was $0.41, a decline from the previous year, the company is optimistic about future growth. Starbucks expects to maintain its investment in the Back to Starbucks strategy, with particular attention to increasing transaction volumes and improving customer experience. Looking ahead, the company anticipates benefits from ongoing operational adjustments and marketing efforts, although no specific revenue or EPS targets were provided for the upcoming quarters.
Additional News
In recent weeks, Starbucks has been actively refining its corporate structure and leadership. In February, the company announced a significant reduction of 1,100 support partner roles as part of its strategic "Back to Starbucks" plan. March saw the appointment of Cathy Smith as Chief Financial Officer, effective March 24, 2025, following the departure of Rachel Ruggeri from the role. Additionally, Starbucks hosted its 33rd Annual Meeting of Shareholders virtually, where Brian Niccol shared progress on the turnaround strategy. The Board declared a cash dividend of $0.61 per share, marking the 60th consecutive quarter of dividend payouts, emphasizing the company’s dedication to consistent shareholder value creation. Starbucks continues to focus on operational efficiency and strengthening its market position in the face of evolving challenges.
Revenue
Starbucks reported a 2.4% increase in total revenue for 2025 Q2, reaching $8.30 billion compared to $8.11 billion in 2024 Q2. The company-operated stores generated $7.29 billion, licensed stores contributed $1.02 billion, and other revenue sources added $460.60 million, culminating in total net revenues of $8.76 billion.
Earnings/Net Income
Starbucks's earnings per share fell sharply by 50.0% to $0.34 in 2025 Q2 from $0.68 in 2024 Q2, with net income declining by 50.3% to $384.10 million. This significant drop indicates challenging financial performance for the quarter.
Price Action
The stock price of Starbucks has edged up 1.45% during the latest trading day, climbed 3.79% during the most recent full trading week, and tumbled 14.16% month-to-date.
Post-Earnings Price Action Review
Following the release of its earnings report, Starbucks (SBUX) stock demonstrated mixed short-term performance. Historical backtest results indicate a 3-Day win rate of 40%, a 10-Day win rate of 55%, and a 30-Day win rate of 40%. These metrics suggest that the stock tends to perform well shortly after earnings releases, although the gains are not sustained in the longer term. The maximum return observed was 5.10% over 30 days, which highlights the potential for price appreciation post-earnings. Despite the disappointing quarterly results, investors may see short-term opportunities in Starbucks stock, although caution is advised given the volatility and overall downward trend observed month-to-date.
CEO Commentary
Brian Niccol, Chairman and CEO of Starbucks, expressed confidence in the company's strategic direction despite disappointing Q2 results, stating, "Our goal is that every transaction is higher quality and more profitable." He emphasized the importance of a customer-driven culture, noting that "we're not just building back our business, we're building back a better business." Niccol highlighted early indicators of recovery, including increased partner engagement and improved customer experience, while acknowledging challenges in comparable store sales and margins. He reiterated that the company remains focused on investing in partners and operational improvements, declaring, "I'm confident we're building a globally resilient business."
Guidance
Cathy Smith, EVP and CFO, indicated that while the Q2 EPS was $0.41, a decline from the previous year, the company is optimistic about future growth. Starbucks expects to maintain its investment in the Back to Starbucks strategy, with particular attention to increasing transaction volumes and improving customer experience. Looking ahead, the company anticipates benefits from ongoing operational adjustments and marketing efforts, although no specific revenue or EPS targets were provided for the upcoming quarters.
Additional News
In recent weeks, Starbucks has been actively refining its corporate structure and leadership. In February, the company announced a significant reduction of 1,100 support partner roles as part of its strategic "Back to Starbucks" plan. March saw the appointment of Cathy Smith as Chief Financial Officer, effective March 24, 2025, following the departure of Rachel Ruggeri from the role. Additionally, Starbucks hosted its 33rd Annual Meeting of Shareholders virtually, where Brian Niccol shared progress on the turnaround strategy. The Board declared a cash dividend of $0.61 per share, marking the 60th consecutive quarter of dividend payouts, emphasizing the company’s dedication to consistent shareholder value creation. Starbucks continues to focus on operational efficiency and strengthening its market position in the face of evolving challenges.
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