Starbucks has turned to a new CEO and a new strategy to stop sales tumbling. Although it's early days, it looks like the first steps have added a small caffeine boost to the company.
Comparable sales fell 4% for the quarter ended December 29, the company said on Tuesday. While still a decline, analysts surveyed by Bloomberg were expecting a drop of 5.3%. Net revenue reached $9.4 billion, also slightly beating estimates.
Starbucks is in the middle of a turnaround effort. Sales have fallen in recent quarters, and store workers have told Business Insider that they are often understaffed and struggle to make drinks and food in a timely manner.
CEO Brian Niccol, who joined the company from Chipotle in September, pointed to several improvements planned for this year on the earnings call on Tuesday. Among them are reducing the number of items on Starbucks' menu, using a new algorithm to handle mobile orders, and adding digital menu boards to stores.
The company is also backing away from a previous goal of $4 billion in savings by 2028, CFO Rachel Ruggeri said on the call, though Starbucks is still looking for efficiencies, she added.
Her comments took some of the wind out of Starbucks' shares after hours, which retreated from an increase of about 4% to trade up about 0.6%.
Niccol has said that he wants to cut wait times for orders to four minutes or less while also making Starbucks stores places where customers want to hang out.
The changes so far include limiting bathroom access and free water to paying customers, as well as asking baristas to add handwritten notes to to-go cups.
"While we're only one quarter into our turnaround, we're moving quickly to act on the 'Back to Starbucks' efforts and we've seen a positive response," Niccol.
Do you work at Starbucks and have a story idea to share? Reach out to this reporter at abitter@jkmperu.com.
