Starbucks(SBUX) New York Post·2024-11-27 15:33Company Performance - Starbucks is reducing corporate employees' holiday bonuses by 40% due to poor performance this year, marking the worst year since the pandemic in 2020 [1][3] - Revenue increased less than 1% in the fiscal year ended Sept 29, significantly lower than the double-digit growth in previous years [4] - Operating income dropped 8% in the same period [4] - Global same-store sales fell 2% this fiscal year, only the second such drop in the last 15 fiscal years, with the first occurring in 2020 during lockdowns [6] Bonus Structure and Impact - Corporate workers will receive only 60% of their overall bonuses, with payouts based on personal performance and company results [3] - Senior vice presidents and executives will face larger bonus cuts and will not be eligible for merit raises [9][12] - The portion of bonuses based on company performance considers revenue and operating income, heavily impacting senior positions [4][11] - US employees' bonus goals range from 5% of base pay for rank-and-file workers to 45% of base pay for senior vice presidents [10] Operational Challenges - Sales have slumped due to issues like long wait times of up to 40 minutes and a boycott linked to the company's perceived stance on the war in Gaza [2] - Customers are cutting back on pricey lattes and frappuccinos due to menu price hikes, reflecting broader struggles in the fast-food industry [1] Strategic Changes - New CEO Brian Niccol, who took the helm in September, is focusing on cutting down lines and revamping locations to improve customer experience [5][7] - Niccol has called for extra barista positions to boost efficiency and position Starbucks as a "third place" for customers between work and home [10] - The company plans to fundamentally change its strategy to win back customers and return to growth [8] Market Performance - Starbucks shares have risen 7 5% to $100 68 this year, significantly underperforming the S&P 500's 27% growth during the same period [13]