Starbucks (NASDAQ:SBUX) released fiscal third-quarter results on Tuesday that missed analyst expectations due to softer demand impacting profit margins, yet the coffee giant emphasized ongoing advancements in its restructuring efforts.
Following the earnings report, Starbucks shares rose over 4% in early U.S. trading.
For the quarter ending June 30, Starbucks posted adjusted earnings per share of $0.50 on revenues of $9.5 billion, compared to analyst forecasts of $0.65 EPS and $9.29 billion revenue.
The operating margin shrank by 680 basis points to 9.9%. Comparable store sales dropped 3%, with a 2% decline seen in North America.
Despite these challenges, the company indicated its operational transformation is beginning to deliver results.
CEO Brian Niccol, who is leading Starbucks’ turnaround strategy, told analysts during the post-earnings call that the progress was “ahead of expectations.”
Niccol has focused on increasing sales by reducing production and service times and investing in enhancements to the in-store customer experience. The company has also revamped marketing efforts to better connect with customers.
Earlier this year, Niccol noted that although the financial numbers had yet to fully reflect these changes, the strategy was gaining “real momentum.”
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