Business

Costco topped fourth-quarter earnings and revenue estimates.
The warehouse club has been winning over younger members with better merchandise and stronger digital offerings.
E-commerce sales increased by 13.5% compared with the year-ago period, excluding the impacts from changes in gas prices and foreign exchange.

A Costco store in Richmond, California, US, on Thursday, May 29, 2025.
David Paul Morris | Bloomberg | Getty Images

Costco on Thursday topped Wall Street’s expectations for quarterly earnings and revenue as the warehouse club posted double-digit gains in both membership income and its e-commerce business.
Unlike many other retailers, the company does not share an annual outlook.

On the company’s earnings call, CFO Gary Millerchip said the retailer has worked hard to offset higher tariff costs. In some cases, it has introduced new items from its Kirkland Signature private-label brand as alternatives to goods hit by tariffs, he said. About a third of Costco’s U.S. sales come from imported goods.
Costco is also changing its merchandise assortment in some cases, he said, such as buying more U.S.-made items or leaning into categories with less tariff exposure like health and beauty.
He said overall inflation remained in the low- to mid-single-digit range, with food price increases similar to last quarter. Yet for the second consecutive quarter, he said inflation returned for non-food merchandise, primarily driven by imported items.
Shares of the retailer fell slightly in extended trading.
Here’s how Costco did in its fiscal fourth quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

Earnings per share: $5.87 vs $5.80 expected
Revenue: $86.16 billion vs. $86.06 billion expected

Costco’s net income for the three-month period that rose to $2.61 billion, or $5.87 per share, compared with $2.35 billion, or $5.29 per share a year earlier. Revenue increased from $79.7 billion in the year-ago period.
Same-store sales, an industry metric that takes out one-time factors such as store openings and closures, rose 6.4% excluding the impact from changes in gas prices and foreign exchange. That result, which was reported along with Costco’s August sales numbers, marks two quarters in a row of decelerating same-store sales.
E-commerce sales increased by 13.5% compared with the year-ago period, excluding the impacts from changes in gas prices and foreign exchange.
For the full year, e-commerce sales exceeded $19.6 billion, a 15% year over year increase, Vachris said on the company’s earnings call. That amounts to a little over 7% of Costco’s net sales for the year.
Vachris said Costco is adding more digital features, including the rollout of checkout technology to clubs that makes it faster for employees to scan small- and medium-sized transactions. It’s improving the search features on its website and app. And, he said, it’s created a virtual waiting room on its website for high-demand items like Pokemon cards during peak traffic periods.
As U.S. consumers look for value, Costco and its warehouse club competitors have opened new locations and attracted more members. Younger shoppers have signed up for the stores as the retailers offer more convenient ways to shop online, a wider variety of merchandise and cheaper meals.
In an interview this summer, Millerchip told CNBC that the average age of the company’s members has fallen, and just under half of its new signups each year from people under 40.
As members across age groups join, Costco’s revenue, which includes net sales and membership fees, has also grown. Its full-year revenue totaled $275.24 billion, up about 8.1% year over year.
In the quarter, its membership fee income jumped about 14%, which reflects its increase in paying shoppers, the rising number of members who are upgrading to higher-tier memberships and its higher annual fee. Last fall, it raised its membership fee for the first time since 2017. Costco shoppers now pay $5 more per year or $10 more annually for its higher-tier membership when their annual fee renews.
Millerchip said on the company’s earnings call that the membership fee increase accounted for a little less than half of its membership fee income growth in the quarter.
On the company’s earnings call, CEO Ron Vachris said Costco opened 27 new warehouses, including three relocations. It plans to open another 35 warehouses in the coming fiscal year, including five relocations.
Traffic to stores and Costco’s website rose 3.7% globally during the quarter, Millerchip said on the call. Meanwhile, average transaction size climbed 2.6% worldwide, excluding gas and foreign exchange changes, he added.
During the quarter, sales in Costco’s fresh category, which includes perishable items, grew by high-single-digits led by double-digit gains in meat, Millerchip said on the company’s earnings call. Non-food grew by high-single-digits, too, as jewelry, gift cards, toys and men’s apparel all rose by double-digits year over year.
Gold bars, however, were less of a growth driver in the quarter because Costco is lapping a year-ago period when it first started to sell the item, Millerchip said.
Shares of Costco have jumped by about 180% over the past five years. Yet the retailer has underperformed the market more recently, as shares are up just over 2% so far this year compared to the S&P 500’s more than 12% gains during the same time. More

Acclaimed music producer Jack Antonoff is rejecting claims by Live Nation Entertainment CEO Michael Rapino that concert tickets are still “underpriced.”
Antonoff argued that ticket resales above face value creates confusion and exploitation, distancing artists from their audiences.
Rapino’s comments at the Game Plan conference came just days before the Federal Trade Commission sued Live Nation and its subsidiary Ticketmaster for what it called “illegal” ticket resale tactics.

Jack Antonoff speaks on stage at “Up Close & Personal” In My Studio With…Jack Antonoff at The Village Recording Studio on Aug. 11, 2025 in Los Angeles, California.
Unique Nicole | Getty Images

Acclaimed music producer Jack Antonoff is rejecting claims by Live Nation Entertainment CEO Michael Rapino that concert tickets are still “underpriced.”
The CEO’s comments came at the CNBC Sport and Boardroom Game Plan conference last week, when he said, “In sports, I joke it’s like a badge of honor to spend [$70,000] for Knicks courtside. … When you read about the ticket prices going up, it’s still an average concert price [of] $72. Try going to a Laker game for that, and there’s 80 of them [in a season].”

Antonoff responded to those comments in a post on X Thursday saying, “this really breaks my heart and is a sick way of looking at.”
“Answer is simple: Selling a ticket for more than its face value should be illegal,” he wrote. “Then there is no chaos, and you give us back the control instead of creating a bizarre free market of confusion amongst the audience who we love and care for.”
Antonoff, famous for working with superstar Taylor Swift, also pointed to ticket resellers allegedly hiking prices on the Live Nation site. He went on to say his team tries to find “new ideas” to get around things like dynamic pricing to make concerts more affordable for fans.
“It could all be so easy if the people up top didn’t see the audience as a faceless group to extort money from,” Antonoff wrote.
Rapino’s comments at the Game Plan conference came just days before the Federal Trade Commission sued Live Nation and its subsidiary Ticketmaster for what it called “illegal” ticket resale tactics. In the filing, the FTC explained that the companies “tacitly worked” with scalpers that enabled them to “unlawfully purchase” tickets to increase profits.

″[Ticketmaster and Live Nation’s] illegal conduct frustrates artists’ desire to maintain affordable ticket prices that fit the needs of ordinary American families, costing ordinary fans millions of dollars every year,” the lawsuit read.
Live Nation did not immediately respond to a request for comment Thursday.
Live Nation is also being sued by the U.S. Department of Justice to break up the company over alleged antitrust violation.
“We allege that Live Nation relies on unlawful, anticompetitive conduct to exercise its monopolistic control over the live events industry in the United States at the cost of fans, artists, smaller promoters, and venue operators,” said Attorney General Merrick Garland in a May 2024 statement announcing the lawsuit. More

New car sales are seeing a surprising boost heading into the fourth quarter.
Consumers are worried about changing regulations on tariffs, electric vehicles and more, meaning many are rushing to buy vehicles now.
Cox Automotive raised its 2025 new vehicle U.S. sales forecast to 16.1 million from a previous range of 15.6 million to 15.7 million due to stronger-than-expected demand so far this year.

GMC SUVs parked outside a GMC Buick dealership in Edmonton, Alberta, Canada, on March 22, 2025.
Artur Widak | Nurphoto | Getty Images

DETROIT — Uncertainty surrounding U.S. regulations on tariffs, electric vehicles and other auto-related issues have given new car sales a surprising boost heading into the fourth quarter, according to a new industry analysis.
Cox Automotive on Thursday raised its 2025 new vehicle U.S. sales forecast to 16.1 million from a previous range of 15.6 million to 15.7 million due to stronger-than-expected demand so far this year. That would be up from roughly 16 million vehicles sold domestically in 2024.

Cox’s updated forecast is in-line with other industry estimates of 16.1 million units from J.D. Power and 16.2 million vehicles from Edmunds.
Cox analysts said the resilient sales — forecast to be up 4.6% compared with the same time period last year — are due to consumers deciding not to wait to buy a new vehicle for fear of higher prices.
The first bump occurred earlier in the year amid President Donald Trump’s announcements of tariffs. That was followed more recently by a surge in EV sales ahead of the end of an up to $7,500 federal credit for the purchase of such vehicles that will be eliminated at the end of this month.
“The role of changing policies has been a positive story for the new vehicle market so far, with sales running well ahead of last year’s pace,” Cox Automotive senior economist Charlie Chesbrough said during a Thursday webinar. “A strong stock market is supporting vehicle demand and uncertainty around future. Higher prices [are] leading many potential vehicle buyers to purchase sooner rather than later.”
The pull-ahead in sales has benefitted the U.S. automotive industry so far this year, but Chesbrough said the pace of sales — currently at 16.3 million — is expected to slow in the fourth quarter and into next year.

Stock chart icon

Auto stocks

“We expect Q4 sales to slow as demand for EVs and plug-ins falls once tax credits expire and tariff costs are incorporated more into pricing for the performance of the manufacturers in 2025,” he said.
The robust sales, as well as regulatory changes eliminating fuel efficiency fines and corporate tax change benefits, have helped some automakers offset part of the higher tariff costs, according to Cox analysts.
Regarding sales, Cox predicts General Motors has benefited the most from the resilient demand through the third quarter, with a 1 percentage point increase in U.S. market share compared with the same period a year earlier. The Detroit automaker is followed by Toyota Motor and Hyundai Motor, both expected to be up 0.6 percentage points, and by Ford Motor, forecasted to be up 0.4 percentage points.
“The biggest are getting bigger, while smaller and more specialized brands are stalling or losing share,” Chesbrough said. “It may be that having more product offerings across more segments is key to capturing more buyers in today’s market.”
Smaller carmakers in the U.S. such as Nissan Motor, Volkswagen, Subaru and Tesla, are all estimated to have lost market share through the third quarter of this year, according to Cox. Jeep parent Stellantis also continues to struggle amid a yearslong sales decline, Cox estimated.
Many automakers are scheduled to release their third-quarter sales starting next week, followed by third-quarter earnings reports beginning late next month. More

Shares of CarMax were down more than 20% on Thursday after the used auto retailer missed Wall Street’s quarterly earnings and revenue expectations.
The company’s results included earnings per share of 99 cents compared with expectations of $1.05 and revenue of roughly $6.6 billion versus estimates of $7.02 billion.
CarMax CEO Bill Nash described the fiscal second quarter that ended Aug. 31 as “challenging.”

A sign is posted in front of a CarMax dealership on April 10, 2025 in Santa Rosa, California. 
Justin Sullivan | Getty Images News | Getty Images

DETROIT — Shares of CarMax fell 20% in trading Thursday after the used auto retailer missed Wall Street’s quarterly earnings and revenue expectations, leading to the stock’s lowest price in more than five years.
CarMax shares ended Thursday at $45.60 — the stock’s lowest close since March 2020, when the coronavirus pandemic closed down U.S. auto production and many retailers. The stock is down about 44% so far this year, with the company’s market cap at $6.84 billion. 

The company’s quarterly results included revenue of roughly $6.6 billion, down 6% from a year earlier, and adjusted earnings per share of 99 cents. excluding some special factors, according to LSEG. Analysts surveyed by the financial markets data firm had expected earnings per share of $1.05 and revenue of $7.01 billion.
Other key results, such as sales and net income, were also down compared with a year earlier. The company’s overall vehicle sales fell 4.1% compared with the same period a year earlier, assisting in a roughly 28% decline in net income to $95.4 million.
CarMax CEO Bill Nash described the fiscal second quarter that ended Aug. 31 as “challenging” in the company’s quarterly release. He cited changing market conditions, a pull-ahead in sales earlier in the year due to tariff fear-buying and depreciation in its inventory fleet as some reasons for the company’s lackluster performance.
“For the quarter, each month was down year over year, and each month got a little weaker throughout the quarter,” Nash told investors on the company’s quarterly call on Thursday. “But certainly, we put ourselves in a better position with the start of this quarter, both on an inventory position as well as from a pricing standpoint.”
Shares of other car retailers were also down after CarMax’s results, as many investors and Wall Street analysts watch the company’s performance as an early barometer ahead of other quarterly reporting.

Shares of other vehicle retailers such as Group 1 Automotive, AutoNation, Sonic Automotive and Lithia Motors also fell Thursday, losing between roughly 2% and 6%.
Correction: This story has been updated to reflect that earnings per share for the quarter were adjusted. More

Sales of previously owned homes were essentially flat in August.
The median price of an existing home sold in August was $422,600, up 2% from a year ago.
Supply fell 1.3% last month from July although it is still up 11.7% year over year

A sold sign is posted in front of a home for sale on Aug. 27, 2025 in San Francisco, California.
Justin Sullivan | Getty Images

Sales of previously owned homes were essentially flat in August, coming in 4 million units on a seasonally adjusted, annualized basis, according to the National Association of Realtors. That is a 0.2% drop from July and an increase of 1.8% from August of last year. Sales were strongest in the Midwest and weakest in the Northeast.
This count is based on closings, so people signing their deals in June and July, when mortgage rates were about 50 basis points higher than they are today. Rates began dropping sharply at the start of September, which would not figure into these numbers.  

The upper end of the market is moving better than the lower end. Sales of homes priced above $1 million gained 8% year over year, the top performer. Sales of homes priced below $100,000, however, dropped more than 10% from a year ago.
“Record-high housing wealth and a record-high stock market will help current homeowners trade up and benefit the upper end of the market. However, sales of affordable homes are constrained by the lack of inventory,” said Lawrence Yun, chief economist for the Realtors, in a release.
The Midwest was the best-performing region in August, NAR said, noting affordable market conditions. Median home prices in the Midwest were 22% below the national median price, the report said.

Get Property Play directly to your inbox

CNBC’s Property Play with Diana Olick covers new and evolving opportunities for the real estate investor, delivered weekly to your inbox.
Subscribe here to get access today.

Supply is what seems to be changing most in the housing market right now. After a pretty big run-up earlier this year, supply fell 1.3% last month from July although it is still up 11.7% year over year. That was the first monthly drop since the start of this year.
Sellers, seeing weaker prices and higher mortgage rates, are coming off the market or deciding to wait a while longer before listing in the first place. There was a 4.6-month supply of homes for sale in August, which is considered lean.

Weaker supply is keeping prices in positive territory. The median price of an existing home sold in August was $422,600, up 2% from a year ago and the 26th consecutive month of annual price gains.
Homes are staying on the market longer, notching 31 days on average in August, up from 26 in August 2024. The share of first-time buyers is historically low at 28%, and all-cash buyers are still king at 28% of sales, up from 26% a year ago. More

JLL found office transaction momentum strengthened significantly in the first half of this year, with total industry volume up 42% year over year to $25.9 billion.
The report notes that as we move through the third quarter, JLL is actively seeing the transition from “office curious” to “office serious” take hold across the industry.
There’s a flight to quality, with top-tier office buildings seeing the bulk of the demand.

Working late, office buildings, Financial District, London.
Travelpix Ltd | Stone | Getty Images

A version of this article first appeared in the CNBC Property Play newsletter with Diana Olick. Property Play covers new and evolving opportunities for the real estate investor, from individuals to venture capitalists, private equity funds, family offices, institutional investors and large public companies. Sign up to receive future editions, straight to your inbox.
The recovery in the U.S. office market has been gaining steam this year and may be set to accelerate. While vacancy rates and return-to-office employee volume have been focal points in gauging demand, a new look at interest in office from the capital markets points to an even stronger recovery than previously thought.

JLL, a global commercial real estate and investment management company, gave Property Play exclusive access to a limited distribution client report. It found that office transaction momentum strengthened significantly in the first half of this year, with total industry volume up 42% year over year to $25.9 billion.
Looking at JLL’s office sales transactions alone, volume was up 110% from the first half of 2024 to the first half of 2025, more than double the momentum of any other major property type, including data centers. 
The report notes that as we move through the third quarter, JLL is actively seeing the transition from “office curious” to “office serious” take hold across the industry. Lower interest rates are propelling much of that.

Get Property Play directly to your inbox

CNBC’s Property Play with Diana Olick covers new and evolving opportunities for the real estate investor, delivered weekly to your inbox.
Subscribe here to get access today.

In addition, the number of bids on a given transaction was up 50% over the same period, with the second quarter alone experiencing $16 billion in office bid volume, which is the highest quarterly total since the second quarter of 2022 when the 10-year treasury yield was below 3%. Bid volume can measure growth and health of a sector from a capital markets perspective. 
“What typically happens is, after a downturn, the high-net-worth private capital comes back in because of opportunistic returns, and they start buying. The REITs follow, and then the institutional capital flows, like pension funds, separate accounts, offshore capital, follow the REITs. That’s exactly what’s playing out right now,” said Mike McDonald, senior managing director and office group leader at JLL. 

Larger deal demand, that of $100 million or more, is increasing, up roughly 130% in the first half of this year compared with the same period in 2024. This is due to increasing institutional investor appetite for higher quality office, as well as better debt availability, according to the report.
There is, of course, a flight to quality, with top-tier office buildings seeing the bulk of the demand. As those buildings fill up, second-tier buildings will start to see increased demand and could actually outpace the top tier buildings as it relates to rental rates and absorption over the next five years, according to McDonald.
The massive office downturn in the first years of the pandemic caused a pullback in planning for new buildings, so there is now very little new office space under construction. The market will see just 6 million square feet of office space delivered next year, which is 90% below the four year annual average following the great financial crisis. 
“Some people may refer to it as slowing down; it’s really hitting a brick wall,” said McDonald. “There’s going to be a dearth of new deliveries the next three years, as evidenced by the 6 million square feet next year, which is anemic based on 30-year historical averages.”
He also pointed to overall reduction of office inventory, as older office buildings are either torn down or converted to residential, hospitality, self storage, or just reimagined into something other than office.
The lowest quality, distressed segment is still seeing some bargain hunters, so there is something of a bar-bell effect. 
“We call them dark matter, and they do matter. It’s that 1-million-square-foot tower in downtown Detroit or Pittsburgh or Cleveland or Dallas that is 40% occupied,” said McDonald. “Capital looking for highly distressed, very opportunistic returns, very low basis, where an asset may have traded five years ago at $300 a foot, and they can buy it now for $50 a foot. At that lower investment, they can reduce rents and have more velocity because their basis is lower, they have more of a competitive advantage.”
Demand tailwinds for office overall continue, as company downsizing rates are stabilizing. Companies are also no longer shedding very much space when they relocate; in 2022, on average, companies were getting rid of almost 20% of their space when they made a move. That is now down to 3%, according to JLL, a clear sign of stabilization.
This year REIT acquisitions have been strong. The stocks of office REITs like BXP, Vornado and SL Green are higher in the last six months, although the largest, Alexandria Real Estate Equities, is still struggling.
Lower interest rates over the next several quarters will certainly help in the cost of debt for dealmaking, but the reason rates are coming down is because of weakness in the economy. That creates a new pressure on the office market when it comes to demand from employers. 
“We’re very mindful of the impact, what that’s going to have on the actual tenant and the companies that actually occupy these buildings,” said McDonald. “You have to think about the macroeconomy, geopolitical risks, all the things that go into setting our overall capital market environment, and price of debt is just one component of it.”
McDonald said next year may be more about institutional capital taking the lead. These so-called green shoots in the office market will likely propel both leasing metrics and valuations higher over the next several years.  More

Breeze Airways is planning to start its first international flights in 2026 with service to Mexico, Jamaica and the Dominican Republic.
Breeze Airways started flying in 2021 and was founded by David Neeleman, a serial airline executive who also started JetBlue Airways.

A Breeze Airways airplane on the tarmac at Tampa International Airport in Tampa, Florida, on May 27, 2021.
Matt May | Bloomberg | Getty Images

U.S. startup airline Breeze Airways is planning to fly internationally for the first time early next year, aiming to win over sun-seeking travelers as the carrier enters its fifth year of flying.
The airline’s host of seasonal service kicks off on Jan. 10 with a Saturday-only route between Norfolk, Virginia, and Cancun, Mexico, followed by roundtrips between Charleston, South Carolina, and Cancun on Jan. 17, also only on Saturdays.

Other routes include Saturday service to Cancun starting from New Orleans on Feb. 7 and from Providence, Rhode Island, a week later. In March, Breeze is also planning to start Thursday and Saturday service between Raleigh-Durham International Airport in North Carolina and Montego Bay, Jamaica, and Wednesday and Saturday service to Punta Cana in the Dominican Republic. Flights from Tampa, Florida, to Montego Bay start on Feb. 11.

Read more CNBC airline news

Breeze was launched by JetBlue’s founder, David Neeleman, and debuted during the pandemic, in May 2021.
The carrier been working for years with the Federal Aviation Administration to win certification to fly internationally, Lukas Johnson, Breeze’s chief commercial officer, said in an interview.
It’s the first sizeable U.S. passenger airline to win that certification since Virgin America, which was acquired by Alaska Airlines in 2016, Johnson said.
He said Breeze is continuing its business model of flying its Airbus A220-300s between cities that have little to no competition from rivals and added that the new routes are “an exciting starting point for us.”

“We feel really confident that it’s going to be a guest response,” he said.
Fares for the new routes start as low as $99 one way, but Johnson said premium-class demand for its pricier, roomier seats has been strong and that there is a double-digit percentage of guests who book to a more expensive seat the second time they fly Breeze.

Don’t miss these insights from CNBC PRO More

Starbucks announced a $1 billion restructuring plan Thursday that involves closing some of its North American coffeehouses and laying off more workers.
Approximately 900 non-retail employees will be laid off, Starbucks said.
This is the second round of layoffs in Niccol’s tenure, after 1,100 corporate workers were let go earlier this year.

Starbucks announced a $1 billion restructuring plan Thursday that involves closing some of its North American coffeehouses and laying off more workers as it moves ahead with its “Back to Starbucks” transformation under CEO Brian Niccol.
The number of company-operated stores in North America will decline by about 1% in fiscal year 2025, accounting for both openings and closures, the company said in an SEC filing. Starbucks operated more than 11,400 locations in North America as of June 29, suggesting that more than 100 cafes will shutter their doors as part of the restructuring plan.

Approximately 900 non-retail employees will be laid off on Friday, Starbucks said.
Starbucks estimates that 90% of the expected $1 billion restructuring cost will be attributable to the North America business. In total, the company expects to incur about $150 million in employee separation costs, plus about $850 million in restructuring charges related to the store closures, according to the filing. A significant portion of expenses will be incurred in fiscal year 2025, it said.
Starbucks said in the filing it is prioritizing investment “closer to the coffeehouse and the customer” as it looks to reverse a sales slump in its biggest market. The company’s same-store sales have fallen for six straight quarters, hurt by increased competition and price-conscious consumers.
This is the second round of layoffs in Niccol’s tenure, after 1,100 corporate workers were let go earlier this year. Starbucks ended 2024 with about 16,000 employees who work outside of store locations.
“These steps are to reinforce what we see is working and prioritize our resources against them,” Niccol wrote in a letter to employees Thursday. “I believe these steps are necessary to build a better, stronger, and more resilient Starbucks that deepens its impact on the world and creates more opportunities for our partners, suppliers, and the communities we serve.”

In July, the company announced its biggest investment ever into labor and operating standards, “Green Apron Service,” which involves a more than $500 million investment in labor hours across company-owned cafes in the next year.
In an interview earlier this month, Niccol told CNBC, “I really hope we’re moving towards being the world’s greatest customer service company, [and] the world’s greatest customer centric company.”

In the message to employees Thursday, Niccol said the company had reviewed and identified stores where the company would be “unable to to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance.”
Starbucks executives had previously said that the company would be slowing new openings in favor of remodeling existing locations this year. The renovated cafes are meant to encourage customers to linger, taking the coffee chain back to its roots as a “third place” for consumers, outside of home and the office.
Following Thursday’s announcement, share of Starbucks were roughly flat in premarket trading. The stock has fallen more than 7% this year.
In addition to focusing on the customer experience, Niccol has enacted additional changes to operations including a return to four days in office, beginning next month.
He’s also brought on a new executive team including CFO Cathy Smith, Global Chief Brand Officer Tressie Lieberman and Chief Operating Officer Mike Grams. Grams and Lieberman worked with Niccol in his previous roles at Chipotle and Yum Brands.
Read Niccol’s full memo to Starbucks staff:

Partners,
I’m grateful for the work everyone is doing to put world-class customer service at the center of everything we do and focus on creating an elevated Starbucks experience for every customer, every time.
While we’re making good progress, there is much more to do to build a better, stronger and more resilient Starbucks. As we approach the beginning of our new fiscal year, I’m sharing two decisions we’ve made in support of our Back to Starbucks plan. Both are grounded in putting our resources closest to the customer so we can create great coffeehouses, offer world-class customer service and grow the business.
Changes to some of our coffeehouses
First, I shared earlier this year that we were carefully reviewing our North America coffeehouse portfolio through the additional lens of our Back to Starbucks plan. Our goal is for every coffeehouse to deliver a warm and welcoming space with a great atmosphere and a seat for every occasion.
During the review, we identified coffeehouses where we’re unable to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance, and these locations will be closed.
Each year, we open and close coffeehouses for a variety of reasons, from financial performance to lease expirations. This is a more significant action that we understand will impact partners and customers. Our coffeehouses are centers of the community, and closing any location is difficult.
To put it into context: Since we’ve already opened numerous coffeehouses over the past year, our overall company-operated count in North America will decline by about 1% in fiscal year 2025 after accounting for both openings and closures.
We will end the fiscal year with nearly 18,300 total Starbucks locations – company operated and licensed – across the U.S. and Canada. In fiscal year 2026, we’ll grow the number of coffeehouses we operate as we continue to invest in our business. Over the next 12 months, we also plan to uplift more than 1,000 locations to introduce greater texture, warmth and layered design.
Partners in coffeehouses scheduled to close will be notified this week. We’re working hard to offer transfers to nearby locations where possible and will move quickly to help partners understand what opportunities might be available to them.
For those we can’t immediately place, we’re focused on partner care including comprehensive severance packages. We also hope to welcome many of these partners back to Starbucks in the future as new coffeehouses open and the number of partners in each location grows.
Reducing non-retail partner roles
Second, we’re further reducing non-retail headcount and expenses. This includes the difficult decision to eliminate approximately 900 current non-retail partner roles and close many open positions.
As we build toward a better Starbucks, we’re investing in green apron partner hours, more partners in stores, exceptional customer service, elevated coffeehouse designs and innovation to create the future. We will continue to carefully manage costs and stay focused on the key areas that drive long-term growth.
Non-retail partners whose roles are being eliminated will be notified tomorrow morning (Friday). We will offer generous severance and support packages including benefits extensions.
Unless your job specifically requires you to be on site in the office, we’re asking you to work from home today and tomorrow.
What’s next
These steps are to reinforce what we see is working and prioritize our resources against them. Early results from coffeehouse uplifts show customers visiting more often, staying longer and sharing positive feedback. Where we’ve invested in more green apron partner hours so that there are more partners working at busy times, we saw improvements in transactions, sales, and service times, alongside happier, more engaged partners.
I know these decisions impact our partners and their families, and we did not make them lightly. I believe these steps are necessary to build a better, stronger and more resilient Starbucks that deepens its impact on the world and creates more opportunities for our partners, suppliers and the communities we serve.
To those partners who will be leaving, I want to say a profound thank you. To those continuing on our turnaround journey, I deeply appreciate your commitment to helping us get back to Starbucks.
Brian More