SEATTLE — Sales trends at Starbucks Corp. remain challenged in North America and abroad. For example, 60% of Starbucks Corp.’s sales in North America come from customers who engage with the company’s rewards program and app. During the third quarter of fiscal 2024, many of the remaining 40% of customers that don’t engage with the rewards program went elsewhere and that trend contributed to a 2% decline in North America same-store sales, according to the company. 

Globally, Starbucks’ comparable store sales fell 3%, driven by a 5% decline in comparable transactions that was partially offset by a 2% increase in average ticket. In addition to the 2% same-store sales decline in the United States, the company experienced a 14% decline in China.

“Our total company results were in line with guidance, but international performance, particularly in China, was challenged,” said Laxman Narasimhan, chief executive officer, during a July 30 conference call to discuss third-quarter results. “We are not satisfied with the results, but our actions are making an impact.”

Some of those actions include a focus on productivity savings, innovation and reaching new customers. One way the company plans to engage new customers is to allow non-Starbucks Rewards members to use the app and its mobile order and pay (MOP) function.

“Looking deeper, our data shows that one in four non-Starbucks Rewards members want the ability to use mobile order pay,” Narasimhan said. “Nearly 80% of those customers don’t want to join a rewards program or create an account to do it.

“In response, we opened MOP for all to provide those customers the convenience they see while removing perceived barriers to entry.”

For the quarter ended June 30, Starbucks earned $1.05 billion, equal to 93¢ per share on the common stock, and down from the same period of the year before when the company earned $1.14 billion, or 99¢ per share.

Quarterly sales ticked down to $7.52 billion from $7.56 billion the year before.

North America sales rose 1% to $6.82 billion from $6.74 billion the year before. Contributing to the growth was the opening of 606 new stores in the region. Segment operating income fell 2% to $1.43 billion from $1.46 billion.

“Looking beyond our stores, we continue to realize new efficiencies, cost savings, and performance improvements across our end-to-end supply chain, thanks to strong support from our suppliers, and we see even more headroom,” Narasimhan said. “We have a structured process to realize significant continued improvements across our end-to-end supply chain. We are ahead of plan on productivity. We expect our productivity to drive efficiency and unlock capital from areas that don’t touch the customer.

“In turn, these savings will enable us to target investments that drive value for our customers beginning later in Q4, reigniting our North America flywheel for growth. We’re early days on this journey, building both our strategic sourcing and revenue management capabilities.”

International segment sales fell 7% to $1.84 billion from $1.97 billion the year before. Operating income fell 23% to $287.5 million from $374.5 million.

“Looking outside the US, we continue to see weakness in parts of our international business and strength in others,” Narasimhan said. “Headwinds persist in the Middle East, Southeast Asia, parts of Europe, driven by widely discussed misperceptions about our brand. In some European markets, consumers are stretched. At the same time, we see significant strength in markets like Japan and parts of Latin America.