Starbucks on Tuesday reported better-than-expected sales in its fiscal first quarter, suggesting some of new CEO Brian Niccol's turnaround ideas have legs. The coffee behemoth said revenue was flat at $9.4 billion for the 13-week period ending Dec. 29, just edging out Wall Street's forecast of $9.3 billion. Starbucks' global same-store sales dropped 4% over the year prior, coming in below the 5.5% analysts expected. The quarter prior, same-store sales fell 7%, per the AP.
Niccol has already implemented some changes since joining the company in September, including no longer charging extra for non-dairy milk. He also pulled back on deals, making for a 40% drop in discounted transactions for the quarter, reports CNN. In a conference call with investors Tuesday, he outlined further changes Starbucks plans to make:
- A streamlined menu: Starbucks intends to cut its food and beverage offerings by 30% by later this year, in a move designed in part to speed up service. Niccol did not specify which items are on the chopping block, but CNN notes he previously said the chain's "overly complex" menu was contributing to long lines. As for that faster service, Niccol wants to see most stores fulfill a drink order within four minutes.
- Ceramic mugs: As part of its effort to go back to its roots as a gathering place, the company will start offering ceramic mugs; in-store customers who use them can get free refills of coffee or tea. "This is back to the core of what makes Starbucks a unique experience," Niccol said.
- DIY creamer: The carafes of milk and cream will return to the condiment bar, allowing customers to once again serve themselves, reports NPR.
- New menu format: Digital overhead menus will be introduced in all company-owned US stores by mid-2026 as a way to make options clearer and make it easier to adjust what's available based on the time of day.
- Algorithm tweaks: Niccol said the company is playing around with its ordering algorithms with an eye toward giving priority to in-store customers and better pacing mobile orders. "The place where we run into problems, frankly, is the fact that there is just no gating on the mobile orders," Niccol said. "All these orders come flooding in faster than even our customer can get there. So all these drinks are sitting on the counter, and it's at the expense of providing any other experience for a customer that's right in the store."
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