Although Starbucks posted revenue growth in its latest quarter, the coffee giant’s financial performance shows mixed results that highlight ongoing challenges.
The company’s revenue trends show modest gains, with quarterly revenue reaching $9.456 billion in Q3 FY2025, up 3.8% from the previous year. However, this growth represents a significant slowdown from stronger performance in prior years, when the company saw double-digit increases. Annual revenue for the twelve months ending June 30, 2025, totaled $36.689 billion, marking just a 0.59% increase. These profit challenges reflect deeper issues affecting the business.
Starbucks’ profit picture tells a more concerning story. Gross profit for Q3 FY2025 reached $6.501 billion, representing only a 2% increase year-over-year. The company’s annual gross profit of $25.292 billion showed an even smaller gain of 0.48%. This marks a dramatic shift from the 12.01% profit growth the company enjoyed in 2023.
The company’s operational metrics reveal additional headwinds. Global comparable store sales declined 2%, driven by a 2% drop in customer transactions. North America, a key market, saw comparable store sales fall 2% as well, with transactions down 3%. While average ticket prices rose 1%, this wasn’t enough to offset fewer customer visits.
One-time investments in coffeehouse leadership and turnaround initiatives have pressured profits. Operating income in Q2 FY2025 was $748.3 million, showing tight margin conditions. The company’s Q3 FY2025 earnings per share came in at $0.49 for GAAP and $0.50 for non-GAAP metrics, reflecting the impact of these investments. Starbucks operates as a global retailer of specialty coffee with multiple revenue streams including retail stores, licensed stores, and consumer packaged goods. The company’s diverse portfolio includes multiple brands such as Starbucks coffee, Teavana tea, Seattle’s Best Coffee, La Boulange, and Evolution Fresh.
Despite these challenges, CEO Brian Niccol remains optimistic about the company’s “Back to Starbucks” turnaround strategy. Management believes they’re building foundations for future growth, even though current results haven’t reached the company’s potential. The strategy focuses on improving customer experience and reversing declining transaction trends.
The Channel Development segment provided a bright spot, with revenue increasing 10% to $483.8 million. Management noted improved transaction trends for three consecutive quarters in the U.S., suggesting some recovery momentum despite general declines.
