By Sabela Ojea


Starbucks needs a dramatic overhaul to reverse sliding sales, the coffee chain's new chief executive said after the company reported that its sales slump persisted and suspended its guidance.

Starbucks on Tuesday said that it needs time to review the current state of the business, after same-store sales fell 7% in its most recently completed quarter.

"Our fourth quarter performance makes it clear that we need to fundamentally change our strategy so we can get back to growth," said Chief Executive Brian Niccol, who joined the company last month from Chipotle.

Finance Chief Rachel Ruggeri said that while Starbucks' efficiency efforts continued to produce according to plan, they hadn't been enough to outpace the impact of the decline in traffic.

For its fiscal fourth quarter ended Sept. 29, Starbucks expects earnings per share of 80 cents. Analysts polled by FactSet had been looking for earnings per share of $1.03.

Regarding its topline performance, Starbucks said U.S. comparable store were down 6% on a 10% decline in comparable transactions, despite seeing a 4% increase in average ticket. In China, where Starbucks is facing stronger local competition, comparable store sales fell 14%.


Write to Sabela Ojea at sabela.ojea@wsj.com; @sabelaojeaguix


(END) Dow Jones Newswires

10-22-24 1652ET