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Starbucks posts bigger-than-expected drop in global sales on weak U.S. demand
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Starbucks posts bigger-than-expected drop in global sales on weak U.S. demand
May 25, 2025 9:11 PM

(Reuters) - Starbucks ( SBUX ) posted a bigger-than-expected drop in quarterly global comparable sales on Tuesday, as demand remained sluggish for its pricey coffees in the United States amid rising macroeconomic uncertainty.

Total same-store sales declined 1% in the second quarter, compared with analysts' average estimate of a 0.26% fall, according to data compiled by LSEG.

"Our financial results don't yet reflect our progress, but we have real momentum with our "Back to Starbucks ( SBUX )" plan. We're testing and learning at speed and we're seeing changes in our coffeehouses," CEO Brian Niccol said in a statement.

Niccol has sought to revive sales by steering the company to its coffeehouse roots but his efforts face an increasingly cautious consumer dealing with the fallout of U.S. President Donald Trump's erratic trade policy.

The company's shares were down about 1% at $84 in extended trading. The stock, which had surged in the months following Niccol's appointment as CEO, is down about 7% so far this year on President Donald Trump's erratic trade policy.

North America same-store sales fell 1% for the quarter ended March 30, compared with estimates of a 0.24% drop.

Restaurant visits and spending weakened in the U.S. in February and March this year as consumer sentiment suffered.

Starbucks ( SBUX ) has also struggled with weak demand in China, its second largest market as cheaper local alternatives chip away its market.

Sales in Greater China were flat following four straight quarters of decline.

International comparable sales rose 2%, compared with estimates of a 1.13% drop.

Gross margin fell 590 basis points in the quarter and the company reported adjusted earnings per share of 41 cents, compared with estimates of 49 cents.

Starbucks ( SBUX ) said in February it would cut about 1,100 corporate roles to help reduce costs and streamline operations at a time when sales were weak and coffee prices high.

It also named department store chain Nordstrom's CFO Cathy Smith as its finance chief last month.

(Reporting by Juveria Tabassum in Bengaluru; Editing by Sriraj Kalluvila)

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