Starbucks is navigating a tough business landscape as it works to revitalize its brand under CEO Brian Niccol. The global coffee chain has reported a decline in comparable sales for the second quarter of 2025, reflecting a 1% drop in global same-store sales and heightened challenges in its North American market.
Niccol has implemented the “Back to Starbucks” strategy, focusing on reducing service times, enhancing customer experience, and optimizing staffing. However, the results are yet to show significant financial improvements. The company also paused its Siren System revamp program, initiated by former CEO Howard Schultz, due to high costs. Instead, Starbucks is prioritizing delivery improvements and labor-focused technological upgrades, including scheduling mobile orders.
Economic uncertainties, partly fueled by trade tariffs, have dampened restaurant visits and consumer spending. Despite these challenges, Starbucks’ international segment showed growth, with sales increasing by 2% overall and stability in China, its second-largest market. Starbucks anticipates that its turnaround efforts will take several months to yield stronger results, while its U.S. operations will undergo store portfolio reviews and broader marketing initiatives. The company’s gross margin dropped, and adjusted earnings per share of $0.41 missed expectations of $0.49. Shares fell 6.5% following the announcement.