Starbucks Scores on Holiday Sales. It’s a Good Sign for the Turnaround.

CEO Brian Niccol is trying to bring customers back to Starbucks. (Courtesy Starbucks)

Key Points

• Starbucks achieved its highest North American sales day on Nov. 6 and recorded its best-ever Reusable Red Cup Day sales.
• Starbucks’ comparable-store sales were flat in the U.S. and increased 3% internationally in the fiscal fourth quarter.
• Starbucks is undergoing a $1 billion restructuring, closing hundreds of coffee shops, and laying off 900 corporate employees.

Starbucks posted its biggest sales day ever in North America on Nov. 6, when it launched the 2025 holiday season with a special menu. It notched a second win with Reusable Red Cup Day this Thursday.

Sales for the annual promotional event—customers who order a holiday-themed beverage can receive a free reusable red cup—were the best in the coffee chain’s history.

The sales momentum “shows what’s possible when we keep our focus on the customer and set our green apron partners up to deliver a great experience in every coffeehouse,” said CEO Brian Niccol in a letter to employees on Friday.

Although more than 1,000 Starbucks workers went on strike on Red Cup Day to protest a lack of progress toward a new contract, the group represents less than 1% of the company’s workforce. The majority of Starbucks stores will operate as normal throughout the holiday season, according to the company.

Starbucks is in the middle of a transformation as Niccol seeks to revive sales. Customers have pulled back from the chain, partly because prices have risen since the pandemic. Excessively complicated menus have overwhelmed baristas, leading to long waits for drinks.

Niccol’s “Back to Starbucks” turnaround plan aims to attract customers by improving the in-store experience, increasing staffing and service speed, and adjusting the menu as consumers’ tastes change.

The plan is showing some initial success. For its fiscal fourth quarter, ended in September, Starbucks’ same-store sales finally turned positive after a six-quarter streak of declines. Comparable-store sales were flat year over year in the U.S. and increased 3% in international markets.

Still, the turnaround plan, which includes more hours worked by staff and investments in new technologies, as well as renovations and closings of coffeehouses, weighed on earnings. Adjusted earnings in the September quarter were 35% lower than a year earlier and fell short of what Wall Street expected.

In September, Starbucks announced that it was closing hundreds of coffee shops and laying off 900 corporate employees as part of a $1 billion restructuring effort. The company closed 627 stores in the latest quarter under the plan.

Starbucks also said recently that it is selling a 60% stake in its China retail operations to the investment firm Boyu Capital. The partnership is meant to combine Starbucks’ coffee expertise with Boyu’s knowledge of the Chinese market. It could help the brand grow faster in China, especially in smaller cities where there are fewer Starbucks stores.

For now, investors are waiting to hear more. As of Friday’s close, Starbucks stock was down 8% year to date.

Write to Evie Liu at evie.liu@barrons.com