Starbucks shares slide after preliminary results show sales fell again

Starbucks on Tuesday posted preliminary quarterly results, which showed its sales fell again.

The company’s preliminary net sales fell 3% to $9.1 billion. It reported preliminary adjusted earnings per share of 80 cents.

Analysts surveyed by LSEG were expecting the company to report fiscal-fourth quarter earnings per share of $1.03 and revenue of $9.38 billion.

Starbucks’ same-store sales fell for its third consecutive quarter. Worldwide, its same-store sales slid 7%.

Nearly two months ago, CEO Brian Niccol took the helm of the coffee giant after two quarters of same-store sales declines.

He aims to reverse slowing demand for Starbucks’ drinks, particularly in its two largest markets: the United States and China. In the U.S., the chain has been losing its occasional customers, who have opted to save money instead of spending on its macchiatos and Refreshers. Starbucks’ business in China has also been struggling to recover ever since the pandemic, and the rise of cheaper local rivals like Luckin Coffee and a more cautious consumer have dented sales in recent months.

Niccol joined Starbucks after six years as CEO of Chipotle; during his tenure at the fast-casual chain, he led the company through a turnaround after its foodborne illness crises, invested in its digital business and turned it into a top industry performer, even during the pandemic.

To curb Starbucks’ sales slump, Niccol plans to turn first to the company’s struggling U.S. business. In an open letter released during his first week on the job, he said he plans to focus on four areas of improvement: the barista experience, morning service, its cafes and the company’s branding.

Niccol has also been reshuffling the company’s executive ranks. On Friday, the company announced a former Chipotle executive, Tressie Lieberman, will be joining Starbucks as its global chief brand officer, a newly created position. And last month, Starbucks said its North American CEO Michael Conway would retire after just five months in the role; Niccol’s predecessor Laxman Narasimhan had appointed Conway before his ouster in August.

Shares of Starbucks are up 1% this year, as of Tuesday’s close. The company has a market cap of more than $109 billion.

The company is expected to report its fiscal-fourth quarter earnings after the bell on Oct. 30.

This story is developing. Please check back for updates.