NEW YORK, Oct 23 — US coffee giant Starbucks yesterday released preliminary results showing that sales are continuing to fall, as the new CEO vowed a strategic overhaul to turn the company around.

"Our fourth quarter performance makes it clear that 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,” CEO Brian Niccol said in a statement.

"I believe that our problems are very fixable and that we have significant strengths to build on,” he added.

Niccol took over the chain last month, after the abrupt departure in August of Laxman Narasimhan, who had held the post of CEO for only 16 months.

Preliminary quarterly results showed that sales had fallen 3.2 per cent year-on-year to $9.1 billion. The company reported preliminary adjusted earnings per share of 80 cents. Full quarterly results are due to be published on October 30.

The company said such results were driven by "softness in North America’s revenues in the quarter,” specifically a six percent decline in US comparable store sales, driven by a 10 percent decline in comparable transactions -- but partially offset by a four percent increase in average transactions.

Various promotions introduced by the company "did not improve customer behaviors,” Starbucks said.

The company also suffered in China, where comparable store sales declined 14 percent, "weighed down by intensified competition and a soft macro environment that impacted consumer spending,” Starbucks said.

As of the end of June, the United States and China, with 16,730 and 7,306 stores respectively, accounted for 61 per cent of all Starbucks coffee shops worldwide.

In after-hours electronic trading, Starbucks shares were down 3.92 percent on the New York Stock Exchange. — AFP