Oct 29 (Reuters) – Starbucks forecast annual profit above expectations, signaling cost cuts and operational changes under CEO Brian Niccol’s two-year turnaround efforts are taking root.
Niccol has spent the past two years simplifying menus, improving staffing levels and reducing wait times as part of his “Back to Starbucks” turnaround, helping the coffee chain achieve stable sales growth, although investors have been increasingly focused on whether the company can restore profitability.
Starbucks has been addressing its costs through restructuring, including layoffs and store closures, aiming to offset the near $500 million in labor investments as part of the overhaul.
The Seattle-based company forecast annual adjusted earnings per share of $3.15 to $3.25, compared with analysts’ expectation of $3.14 per share, according to data compiled by LSEG.
The world’s largest coffee chain reported fourth-quarter global same-store sales growth of 7.2%, which surpassed analysts’ expectations of a 5.4% rise.
Adjusted earnings per share came in at 80 cents, above the 72-cent estimate.
(Reporting by Neil J Kanatt in Bengaluru and Waylon Cunningham in New York; Editing by Pooja Desai)
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