Starbucks reported its Q1 fiscal year 2025 earnings, showing a flat revenue performance at $9.4 billion compared to the previous year. Global comparable store sales declined by 4%, primarily due to a 6% drop in transactions, though this was partially offset by a 3% increase in average ticket size. North America and U.S. comparable store sales also fell by 4%, with an 8% drop in transactions.

The company recorded an operating margin contraction of 390 basis points to 11.9%, driven by investments in wages, benefits, and the elimination of extra charges for non-dairy milk. Earnings per share declined by 23% to $0.69.

Despite the decline, Starbucks continued expanding its global presence, opening 377 net new stores, bringing its total to 40,576 worldwide. The Starbucks Rewards program saw a 1% year-over-year growth, reaching 34.6 million active members in the U.S.

CEO Brian Niccol highlighted the company’s early progress in its “Back to Starbucks” turnaround strategy, which aims to address operational challenges and restore brand confidence. The company also emphasized continued shareholder value through dividend payments, with a declared cash dividend of $0.61 per share.

The company reaffirmed its commitment to labor relations and workplace investments, including enhanced paid parental leave and contract negotiations with Workers United. Additionally, Mellody Hobson announced she will not seek re-election to the Board of Directors, and Starbucks China Chairwoman Belinda Wong retired after 25 years with the company.

Looking ahead, Starbucks remains focused on improving operational efficiencies, enhancing customer experiences, and driving long-term sustainable growth.