Shares in coffee giant Starbucks Corporation (Nasdaq: SBUX) are down significantly in premarket trading this morning after the chain announced its Q2 2025 earnings results yesterday after the bell.
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Those results were described as “disappointing” by Starbucks’s own CEO, Brian Niccol, and demonstrate that the company’s turnaround efforts still have a long way to go. Here’s the latest on Starbucks and what has investors nervous:
In January of this year, Starbucks announced its Q1 2025 earnings, in which it beat Wall Street expectations—a small win for the company and for Niccol, who joined as CEO from Chipotle Mexican Grill in the summer of 2024. But it’s not a win that was repeated in the company’s second quarter.
Yesterday, Starbucks reported earnings for its Q2 of fiscal 2025. That quarter had 13 weeks in it and ended on March 30. Unlike the previous quarter, Starbucks did not beat Wall Street expectations. Wall Street analysts had expected revenue of $8.83 billion and an adjusted earnings per share (EPS) of 49 cents, according to Yahoo Finance. Instead, Starbucks posted the following:
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Revenue: $8.76 billion
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Adjusted EPS: 41 cents
But the revenue and EPS miss isn’t what seems to be rattling investors most. That would be Starbucks’s disappointing comparable sales results.
“Comparable sales” are a metric that looks at the sales of the same stores that have been open for at least a year. If comparable sales are increasing, that’s a good sign as it means the same stores are bringing in more customers, larger orders, or both. But if comparable sales are down, it suggests lower foot traffic or that customers are reducing the amount of money they spend at the store.
Unfortunately for Starbucks, comparable sales in U.S. stores that have been open for at least a year fell during Q2—and it was the fifth straight quarterly fall of U.S. comparable sales.
Starbucks says that U.S. comparable store sales declined 2% during the quarter, and U.S. comparable transactions were down 4%. It was a little better in China, however, which is the company’s second-largest market after the United States. In China, comparable sales were at least flat quarter-over-quarter.
But you would be right to wonder if flat comparable sales in China could get worse, as consumer sentiment across the globe is increasingly becoming anti-American due to President Trump’s trade wars, which are leading to economic strife with America’s largest trading partners.
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