Starbucks on Tuesday reported better-than-expected sales in its fiscal first quarter as some of its turnaround efforts start to deliver results.
The Seattle coffee giant said its revenue was flat at $9.4 billion for the 13-week period ending Dec. 29. That beat Wall Street’s forecast of $9.3 billion, according to analysts polled by FactSet.
Chairman and CEO Brian Niccol, who joined the company in September, said customer-focused changes — such as a decision to stop charging extra for non-dairy milk and a streamlining of the menu — were helping to improve service and drive store traffic.
In a conference call with investors Tuesday, Niccol said Starbucks is planning to cut its food and beverage offerings by 30 percent over the course of this year to simplify operations and speed service. Starbucks will also add digital menus to all of its company-owned US stores over the next 18 months to make ordering options clearer and make it easier to shift its offerings depending on the time of day.
Niccol said the company is also adding staff to some stores and experimenting with ordering algorithms that prioritize in-store customers and better pace mobile orders.
“The place where we run into problems, frankly, is the fact that there is just no gating on the mobile orders,” Niccol said. “All these orders come flooding in faster than even our customer can get there. So all these drinks are sitting on the counter, and it’s at the expense of providing any other experience for a customer that’s right in the store.”
Starbucks is trying to reestablish itself as a gathering place, and this week announced that it will start using ceramic mugs and offering in-store customers free refills of coffee or tea. The company is also trying to appeal to customers with a new rule that requires people to buy something if they want to hang out or use the restroom.
“This is back to the core of what makes Starbucks a unique experience,” Niccol said.
Starbucks’ same-store sales — or sales at locations open at least a year — fell 4 percent compared to the same period last year. The decline was less than the 5.5 percent analysts anticipated, according to FactSet. It was also better than the previous quarter, when global same-store sales were down 7 percent.
US same-store sales also fell 4 percent in the first quarter. Starbucks said transactions were down 8 percent but customers spent more per visit. Starbucks also pulled back on discounts during the quarter, Niccol said.
Niccol said he recently visited China, Starbucks’ second-largest market, where sales have been hampered by lower-cost competitors. China’s same-store sales fell 6 percent in the fiscal first quarter.
Niccol said Starbucks is continuing to explore a strategic partnership that would help it continue to grow in China.
Niccol has also been reshaping Starbucks’ corporate staff. Earlier Tuesday, he announced the departure of two senior executives and a reshuffling of their job responsibilities.
Mike Grams, who most recently served as president of Taco Bell, will become Starbucks’ chief stores officer for North America. Meredith Sandland, the CEO of Empower Delivery and the former chief development officer at Taco Bell, will become Starbucks’ chief store development officer. Niccol led Taco Bell until 2018, when he left to run Chipotle.
Niccol also announced earlier this month that Starbucks plans an unspecified number of corporate layoffs by early March.
Starbucks’ shares rose less than 1 percent in after-hours trading Tuesday.
Starbucks reports better-than-expected quarterly sales as turnaround efforts begin
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Starbucks reports better-than-expected quarterly sales as turnaround efforts begin
- Chairman and CEO Brian Niccol says Starbucks plans to cut its food and beverage offerings by 30% over the course of this year to simplify operations and speed service
Study finds humans were making fire 400,000 years ago, far earlier than once thought
- The discovery was made at Barnham, a Paleolithic site in Suffolk that has been excavated for decades
LONDON: Scientists in Britain say ancient humans may have learned to make fire far earlier than previously believed, after uncovering evidence that deliberate fire-setting took place in what is now eastern England around 400,000 years ago.
The findings, described in the journal Nature, push back the earliest known date for controlled fire-making by roughly 350,000 years. Until now, the oldest confirmed evidence had come from Neanderthal sites in what is now northern France dating to about 50,000 years ago.
The discovery was made at Barnham, a Paleolithic site in Suffolk that has been excavated for decades. A team led by the British Museum identified a patch of baked clay, flint hand axes fractured by intense heat and two fragments of iron pyrite, a mineral that produces sparks when struck against flint.
Researchers spent four years analyzing to rule out natural wildfires. Geochemical tests showed temperatures had exceeded 700 degrees Celsius (1,292 Fahrenheit), with evidence of repeated burning in the same location.
That pattern, they say, is consistent with a constructed hearth rather than a lightning strike.
Rob Davis, a Paleolithic archaeologist at the British Museum, said the combination of high temperatures, controlled burning and pyrite fragments shows “how they were actually making the fire and the fact they were making it.”
Iron pyrite does not occur naturally at Barnham. Its presence suggests the people who lived there deliberately collected it because they understood its properties and could use it to ignite tinder.
Deliberate fire-making is rarely preserved in the archaeological record. Ash is easily dispersed, charcoal decays and heat-altered sediments can be eroded.
At Barnham, however, the burned deposits were sealed within ancient pond sediments, allowing scientists to reconstruct how early people used the site.
Researchers say the implications for human evolution are substantial.
Fire allowed early populations to survive colder environments, deter predators and cook food. Cooking breaks down toxins in roots and tubers and kills pathogens in meat, improving digestion and releasing more energy to support larger brains.
Chris Stringer, a human evolution specialist at the Natural History Museum, said fossils from Britain and Spain suggest the inhabitants of Barnham were early Neanderthals whose cranial features and DNA point to growing cognitive and technological sophistication.
Fire also enabled new forms of social life. Evening gatherings around a hearth would have provided time for planning, storytelling and strengthening group relationships, which are behaviors often associated with the development of language and more organized societies.
Archaeologists say the Barnham site fits a wider pattern across Britain and continental Europe between 500,000 and 400,000 years ago, when brain size in early humans began to approach modern levels and when evidence for increasingly complex behavior becomes more visible.
Nick Ashton, curator of Paleolithic collections at the British Museum, described it as “the most exciting discovery of my long 40-year career.”
For archaeologists, the find helps address a long-standing question: When humans stopped relying on lightning strikes and wildfires and instead learned to create flame wherever and whenever they needed it.
