Starbucks Profit Drops, but Leaders Say Turnaround Is Working

Faster coffee.More baristas.

More seating.Despite headwinds from higher coffee prices and tariffs on certain products, Starbucks is seeing progress on its turnaround strategy, its chief executive, Brian Niccol, told investors and Wall Street analysts on a quarterly earnings call on Tuesday.“We’re not just building back our business,” he said.“We’re building back a better business.”Global same-store sales for the first three months of the year fell 1 percent from a year earlier, an improvement from recent quarters.

Global revenues rose 2.3 percent to $8.7 billion in the quarter while net earnings fell 50 percent, to $384.2 million, from year-earlier levels.In China, the second-largest market for Starbucks and one that has struggled in recent quarters, same-store sales were flat, a considerable improvement from a year earlier, when they were down 11 percent.Last fall, Mr.

Niccol said the company might seek a strategic partner in China, but he provided no update on Tuesday’s call.The company’s stock was down more than 6 percent in after-hours trading.Starbucks attributed some of the steep decline in profit to the hiring of additional workers for its turnaround strategy and various restructuring costs.During the quarter, the company announced plans to cut 1,100 corporate employees.At the same time, Mr.

Niccol said, the company is hiring more baristas and piloting a program that allows them to more easily pick up and trade shifts in their area.In response to customer complaints about wait times, especially during peak periods, Starbucks is testing an order-sequencing program.In stores trying the new program, cafe wait times dropped by an average of two minutes, with a majority of customers now waiting less than four minutes for their coffee at peak times, Mr.

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