Last week, Starbucks reported preliminary fourth-quarter results and suspended its annual forecast through the next fiscal year as new CEO Brian Niccol tries to steer the company toward the path to growth.
The Seattle-based company's strategy to drive demand through promotions and improved loyalty program offers fell flat in the face of muted spending from cost-conscious consumers.
Starbucks is also facing an uphill battle in China, where it is dealing with a choppy macroeconomic recovery and stiff competition from local brands.
Comparable sales in China, the company's second-largest market after the U.S., declined for three straight quarters, falling 14% in the fourth quarter.
Investors, however, are betting on seasoned industry veteran and ex-Chipotle Mexican Grill head Niccol to simplify the company's leadership and operating structure, and reinvigorate the coffee-house culture at Starbucks' U.S. stores.
Shares of the company have risen about 26% since Niccol replaced Laxman Narasimhan as CEO in a surprise announcement in August. They were down about 1% in extended trading on Wednesday.
International comparable sales fell 9% in the fourth quarter, compared with expectations of a 6.5% drop, as per data compiled by LSEG.
Starbucks' loyalty program growth was also tempered in the fourth quarter, with 90-day active members in the U.S. remaining flat sequentially. That compares with a 3% sequential rise reported in the third quarter.
The company's net income fell to $909.3 million, or 80 cents per share, from $1.22 billion, or $1.06 per share, a year earlier in the fourth quarter ended Sept 29.
