Starbucks faces challenges in reviving its business, CEO Brian Niccol said on Tuesday, after the coffee giant posted disappointing global comparable sales and profit with inflation and economic uncertainty driving up costs and dampening US demand.
Investors have placed their bets on Niccol’s turnaround strategy for the brand, whose sales have fallen for four straight quarters, by reducing production and service times and investing in stores to improve customer experience.
“Our financial results don’t yet reflect our progress, but we have real momentum with our ‘Back to Starbucks’ plan,” Niccol said in a statement.
Starbucks paused rolling out its Siren System store revamp program, launched under former CEO Laxman Narasimhan, because it was capital heavy, said Niccol, who had helped revive Chipotle Mexican Grill as CEO of the burrito chain.
The company will focus on investing in improving front-end delivery instead of kitchen equipment, Niccol said on a post-earnings call. “The equipment doesn’t solve the customer experience that we need to provide.”
Niccol said Starbucks was improving service speed with the right staffing and deployment, and that its refreshed marketing was resonating with customers.
Starbucks will also review its US store portfolio as it rolls out labor-focused technological changes including a pilot program that allows customers to schedule their mobile orders, he said.
However, consumers are growing more cautious as US President Donald Trump’s erratic trade tariffs have created economic uncertainty and threaten to fuel inflation. US restaurant visits and spending weakened in February and March.
Starbucks’ shares fell 6.5 percent in extended trading. The stock, which had surged in the months following Niccol’s appointment as CEO, is down about 7 percent so far this year.
North American same-store sales fell 1 percent for the fiscal second quarter ended March 30, worse than the 0.24 percent drop estimated by analysts in an LSEG poll. The company said sales in Canada returned to growth in the quarter.

TURNAROUND TIMELINE
It may take time for traffic to reaccelerate because changes in stores and reinstating its coffee house roots could take at least another three to six months, said Bernstein analyst Danilo Gargiulo.
Starbucks is paring down promotions and discounts, and relying less on its loyalty program as it invests in broader marketing.
The average ticket, or amount spent by customers per visit, was up 3 percent in the second quarter.
The company said it will localize and move production as needed to mitigate the impact of US tariffs on imports from China.
The company’s international business improved slightly, with sales unchanged in China, its second-largest market, after four straight quarters of decline. Starbucks said it was committed to growing business in China long-term.
International comparable sales rose 2 percent, compared with estimates of a 1.13 percent drop.
Gross margin fell 590 basis points in the quarter and the company reported adjusted earnings per share of 41 cents, missing estimates of 49 cents.
Total same-store sales declined 1 percent in the second quarter, compared with analysts’ average estimate of a 0.26 percent fall. Comparable sales had declined 4 percent in the preceding three-month period.

LAUWERSOOG: Gliding gracefully through the waters at his new home, Witje pauses briefly to peer through a large window at the curious and admiring visitors.
The 4-month-old gray seal is a lucky survivor able to swim in one of nine new tanks at the World Heritage Center, or WEC, a recently opened seal rescue facility in Lauwersoog, in the north of the Netherlands.
He was brought in after being orphaned and was suffering from a swollen flipper and a damaged eye.
“On a yearly basis, we roughly treat about 200 seals,” Sander van Dijk, the curator of the center, told The Associated Press. In 2024, researchers at Wageningen University in the Netherlands counted around 24,000 seals across the Wadden Sea.
Most are pups who get separated from their mother, known as howlers for their plaintive wailing. Others are injured by floating debris or are struck by passing vessels.
“If we look at our own data over the past 15 years, we just see every year more seals that somehow get entangled in waste in the sea, mostly fishing nets,” Van Dijk said.
The WEC, which officially opened to the public Saturday, replaces the Pieterburen Seal Center, a rescue facility set up in 1971 to treat injured seals found in and around the nearby Wadden Sea, which is a UNESCO World Heritage Site.
Witje’s tank is an upgrade from his previous quarters. He gets to swim in water directly from the sea, rather than tap water, in order to maintain a habitat as close as possible to the seals’ natural environment.
“They are adapted to living in seawater. It’s good for their fur. But also seawater, through its salt, has some properties that makes wounds heal faster,” Van Dijk said.
The WEC can treat around 70 seals at a time and has 12 intensive-care units for animals with serious injuries who are able to recover in special enclosures which offer a calm environment. They are prevented from swimming in order to rest and the space is cleaned frequently to prevent infections from waste.
The new building, which cost over 40 million euros ($45 million), with financing provided by local and regional governments as well as charitable organizations, tells more than just the story of the seas. It’s an educational space which teaches visitors about the Wadden Sea, the largest continuous system of intertidal flats in the world, extending along the coasts of the Netherlands, Germany and Denmark.
The new facility is significantly closer to the sea than the previous location. The tanks for the 10 seals currently residing at WEC look out over the water. Caregivers at the center are optimistic that Witje will soon recover enough to be released back into the waves.