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Tho US was a laggard, Starbucks Coffee concluded its 2025 fiscal year with first quarter of same-store sales growth in 7 periods, giving CEO Brian Niccol confidence that his efforts to upgrade ambience and service at the stores and accelerate innovation are starting to pay off. The performance "gives us confidence that we really have turned the page to a new chapter in our turnaround," he told investors late yesterday afternoon. But he's "clearly not declaring any victory. We still have a lot of work in front of us, but it&#39;s clear we&#39;re moving in the right direction." While N Amer region was only flat in comparable-store sales, it moved into positive territory as quarter developed and transition to Q4, Niccol indicated. For all the positive spin, shares drew muted reaction, edging down a point in trading as of late afternoon. Among developments charted by Niccol and CFO Cathy Smith on call, they described encouraging reception to recent protein blitz that represents key innovation initiative. As for pricing, during time of surging green bean inflation on combo of crop shortfalls and Trumpian tariffs that currently are at 60% for Brazil growing region, Niccol promised carefully targeted pricing response. "We're going to be very strategic, very targeted, with and when we use it," he said. "I don&#39;t envision us just doing broad-scale pricing across our menu. We will continue to monitor what happens with the inflation that we have to deal with, both wage and commodities. We will be smart about the growth that we get. If we need to use that lever of pricing, we will always keep an eye on what happens with our value rating scores."Financials first. In Q4, net revenues rose 5% to $9.6 bil on same-store gain of 1% driven by 1% in transaction volume. In N Amer same-store sales were flat as 1% increase in register rings was offset by 1% decline in transaction volume. But Niccol noted that US comps turned positive in Sep on transaction volume and remained positive thru Oct, "reflecting the momentum taking shape in our business." Operating income plunged 78.7% to $278.2 mil on costs associated with store closings and improved staffing levels at remaining stores. That shouldn't come as a shock, CEO advised. "As I&#39;ve said before, we expect to grow the top line first, and then earnings will follow," he reminded.For full year, net revenues rose 3% to $37.2 bil on 1% same-store decline driven by 2% decline in comps offset by 1% increase in avg register ring. Operating income fell 45.7% to $2.9 bil.By region, North America scored 3% gain in net revenue to $6.9 bil on 4% growth in company-operated stores partly offset by decline in licensed-store biz. Operating income dropped 75% to $308.5 mil as co closed coffeehouses and upped labor hours in "Back to Starbucks" revitalization program, which includes inauguration of "Green Apron Service" to speed throughput and dial up human touch. Despite shuttering of 584 stores in period, net decline was only 113 units, 1%, to 18,311 stores. So Starbucks stores ain't exactly going extinct.International segment grew revenues 9% to $2.1 bil. Same-store boost of 3% was comprised of 6% transaction gain partly offset by 3% avg ticket decline, with Japan, China, UK and Mexico the strongest performers. Net addition of 316 coffee houses in Q4 included return to opening of flagship units, with dazzler at Real Madrid stadium, Santiago Bernabeu Stadium, to be followed by several more units in 2026. In China market where SBUX is beset by more value-oriented rivals, same-store sales edged up 2% on 9% transaction gain offset by 7% decline in register rings. Gigaroaster continues to evaluate potential local partners for that biz to better counter inroads made by rivals like Luckin.CPG arm called Channel Development Group scored robust 17% revenue gain to $542.6 mil on strength of Global Coffee Alliance with Nestle, which includes bagged coffees, pods and multiserve cold-brews and creamers. That was partly offset by decline with North American Coffee Partnership with PepsiCo focused on single-serve RTDs. Gross margin dipped 0.8 pts to 48.9% on NACP weakness and mix shift, partly offset by favorable global product costs. Operating income was flat at $265.2 mil. On RTD front, launch of protein drink in UK has exceeded expectations and fostered rollout into 8 more markets, CFO Smith said. "We have expectations to expand this further next year, including in the US" via Pepsi alliance dubbed North American Coffee Partnership.Operations: CEO Brings 'Uplift' to Caf&eacute; Network At operational level, things are more copacetic with restive baristas dubbed Green Aprons: Niccol cited "strong partner engagement, record low hourly partner turnover and improved customer experience scores" in Q4. No mention of co's ongoing efforts to squelch unionizing activity, nor were any questions ventured on topic. This at a time that baristas at 650 unionized stores have been voting on whether to authorize a strike to demand union contract certification. Green Apron Service inaugurated last summer is showing promise, with initial 650 pilot stores continuing to outpace others. Relief is on way for visitors frustrated by quality and delays in getting a simple cup of coffee: rollout of Clover Berica Brewer in company-operated US stores should be concluded by end of Q1.Even as it closes stores it deems incapable of meeting service standard or turning adequate profit, Starbucks continues to tinker with prototype of next-gen store that delivers full third-place vibe at lower build cost and optimized space utilization. Last month, roaster converted pickup-only spot in NY into small format version of prototype. "We&#39;re excited to test, learn and iterate," Niccol said. So-called "uplifts" that seek to return coffeehouse charm that was bludgeoned out of most stores by prior leadership teams also is accelerating, with 70 uplifts completed mainly in NY and Southern Calif. "It&#39;s a small sample size, but we are encouraged by the improvements to sales and transactions we&#39;ve seen to date," Brian offered. So he's aiming to have over 1,000 of these in place a year from now.Innovation: Protein Blitz Seems to Be Connecting in Early Days Like other bevcos, Starbucks doesn't want to get left out of protein gold rush. So a key in-store launch was suite of high-protein entries, from lattes to accessories like cold foam and protein milk, that allow protein boost in 90% of offerings while upping register ring (BBI, Sep 29). So far so good, Niccol reported. "We're only about a month in, and we're learning a lot. Customer awareness continues to build, and it is bringing less frequent customers into our coffee houses. We&#39;re excited about the incremental nature of this platform and its long-term role." As noted, SBUX also has high hopes for RTD version, whose US launch was heralded at recent NACS c-store show (BBI, Oct 15).Co will build upon recent matcha upgrade with more customizable options, CEO promised. And snacking options will get classier as SBUX intros "up-leveled bake case" with more artisanal bakery items and "elevated service wares to mirror our coffee house vibe."Hot Seat at Starbucks? Niccol's Old Chair at Chipotle Is Even Hotter It took lucrative package of $96 mil to convince former Chipotle CEO Niccol to jump into hot seat at SBUX after earlier CEO handpicked by Howard Schultz quickly proved to be a bust. But it's looking like the seat Niccol left behind at Chipotle has gotten even hotter. "Chipotle Stock Craters as Young Diners Are 'Particularly Challenged,'" Yahoo headlined as fast-casual chain cut its full-year sales outlook for 3d straight quarter after economically stressed diners cut back their visits. Chain's core consumer, age 25-35, is "particularly challenged" because of unemployment, increased due loan repayments and slower wage growth, Niccol's successor as CEO, Scott Boatright, told investors yesterday, precipitating nearly 20% plunge in shares. (We got an assist from Yahoo transcript in prepping this story.)

Is Starbucks Turning Corner? Q4 Brings First Same-Store Uptick in 7 Qtrs; Protein Blitz Seems to Be Connecting, Says CEO Niccol

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