Starbucks announced its return to form during an investor presentation in New York City. Chief Brand Officer Tressie Lieberman noted that one in three consumers identify Starbucks as their preferred coffee or tea choice away from home. This statement follows the initiation of a turnaround strategy, “Back to Starbucks,” under CEO Brian Niccol, aiming to enhance the in-store experience after years focused on mobile orders.
The strategy involves both minor adjustments, such as reintroducing condiment bars and personalizing cup messages, and significant investments, including expanding barista staffing and renovating cafes at a cost of $100,000 each. Niccol expressed optimism about the company’s progress, stating that they plan to shift towards innovation in fiscal 2026.
Starbucks has projected growth targets for fiscal 2028, including a minimum of 3% growth in global and U.S. same-store sales, a 5% revenue increase, and earnings per share between $3.35 and $4. The company intends to open over 2,000 new cafes worldwide by that year, including 400 new locations in the U.S.
The company reported a 4% increase in same-store sales during its fiscal first quarter, marking the first traffic rise in two years. However, quarterly earnings per share fell short of Wall Street expectations, as investments in restaurants and labor affected profits.
Starbucks plans to reintroduce tiers to its loyalty program, along with new menu items like Energy Refreshers, which will feature higher caffeine content. Additionally, the company aims to launch a sugar-free chai variant this spring.
Executives also outlined a joint venture with Boyu Capital to manage its operations in China, pending regulatory approval. While this shift may lower international revenue initially, it is expected to boost profitability due to a more efficient asset-light model.
Despite the optimistic projections, Starbucks shares declined over 1% in morning trading, reflecting investor concerns about the broader economic context and rising coffee prices. Over the past year, the company’s stock has fallen approximately 12%, leading to a market valuation of around $109 billion.
Source: Reported based on publicly available information from www.cnbc.com.
