Investing.com -- Starbucks (NASDAQ:SBUX) shares fell Wednesday after the company reported preliminary results for its fourth quarter, posting declines in same-store sales, net revenue, and profit, driven by weaker demand in the US.

The coffee chain’s stock fell more than 5% in the premarket trade.

For fiscal Q4 2024, Starbucks said its global comparable store sales fell by 7%, while consolidated net revenues dropped 3% to $9.1 billion. Non-GAAP earnings per share came in at $0.80, reflecting a 24% decline on a constant currency basis.

According to the preliminary report, US comparable sales slid by 6%, while China sales plummeted 14% for the quarter ending on September 29.

Starbucks said the US decline was largely due to a 10% drop in comparable transactions, partially offset by a 4% increase in average ticket size.

The company has also suspended its guidance for the upcoming fiscal year as new CEO Brian Niccol works to revamp the company amid falling demand for its higher-priced offerings.

"It's clear we need to fundamentally change our strategy so we can get back to growth and that's exactly what we are doing with our 'Back to Starbucks' plan,” said Niccol, who took the helm in a surprising appointment.

He added that the company would streamline its "overly complex menu" and adjust its "pricing architecture."

In a bid to reassure investors about its turnaround plan, Starbucks raised its quarterly dividend to 61 cents per share, up from 57 cents.

Commenting on the report, Stifel analysts said domestic comparable sales were slightly weaker than expected as the firm projected a 5% decline. However, they believe “the degree of margin compression and the lack of guidance were less expected.”

“We believe the company should have provided some guardrails around FY25 earnings rather than leave it to investors' imagination. That said, we believe Niccol is zeroing in on the correct issues, and his track record suggests he can maintain the focus necessary to position the company to execute those initiatives,” they added.

Similarly, KeyBanc Capital Markets analysts think that although the preliminary results were worse than anticipated, the surprise announcement “should allow the company to refocus investor attention with earnings on new CEO Brian Niccol's strategy reset and the path ahead.”

Starbucks plans to hold its scheduled fourth-quarter earnings call on October 30.

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