- Surprise Sales Growth: In Q4 (fiscal year ended Sept 28), Starbucks reported global same-store sales up 1%, its first increase in seven quarters [1]. International markets drove the gain (Intl. comps +3%), offsetting flat U.S. comps [2]. Net revenues rose 5% to $9.6 billion (vs. $9.3B expected) [3].
- Profit Impacted by Restructuring: Aggressive cost cuts weighed on profits. Starbucks took a $1 billion restructuring charge, closing 627 stores (90% in the U.S.) and laying off ~900 support staff [4]. As a result, GAAP EPS plunged 85% to $0.12 [5]. On an adjusted basis, it earned $0.52 per share (vs. $0.56 expected) [6].
- CEO: Turnaround Progress: CEO Brian Niccol – one year into the job – said the results show “progress in its multi-year turnaround” [7]. He’s revamped store operations (new staffing standards and order-sequencing software to cut wait times) [8]. CFO Cathy Smith warned that “turnarounds are difficult to forecast … recoveries are not linear,” cautioning that improvement will be gradual [9].
- “Back to Starbucks” Strategy: Under Niccol’s $1 billion plan, Starbucks is “trimming fat” and reinvesting in customers [10] [11]. It is closing underperforming stores (about 1% of its US/CAN estate) and cutting ~900 corporate jobs [12] [13]. At the same time, Starbucks is adding staff during peak periods – hiring roughly 1,500–2,000 more baristas by next spring and ~3,000 by year-end [14] – to speed service and improve the in-store experience.
- Menu & Tech Innovations: Niccol has also pushed new products and tech. He teased premium protein-packed drinks and upscale pastries for next year [15], and Starbucks is piloting a Microsoft-powered “Green Dot” AI assistant on iPads to help baristas with orders and equipment questions [16]. Over 1,000 stores will get warmer new interiors and a simpler menu (30% fewer items) [17]. (Starbucks even inked a deal as the 2028 LA Olympics’ official coffee sponsor [18].)
- Stock Jump & Forecast: Investors cheered the sales rebound. Starbucks shares rose ~2% in after-hours trading on the news [19]. The stock trades in the mid-$80s (about 10% below last year) [20], and Wall Street is cautiously optimistic. Roughly two-thirds of analysts rate SBUX a “Buy,” with consensus targets around $100–104 [21] – implying 20–25% upside from current levels. TipRanks’ own model sees “Outperform” with a ~$105 target [22], as experts reckon Starbucks earnings should rebound (~23% growth in FY2026) once Niccol’s changes take hold.
Starbucks’ surprisingly strong Q4 sales and its renewed focus on customers suggest its “Back to Starbucks” strategy is gaining traction [23] [24]. Still, higher costs (coffee-bean prices, tariffs on imports) cut into margins [25]. The company suspended guidance, with CFO Smith saying new forecasts will come at an investor event in January [26]. In the meantime, analysts note that if Starbucks can sustain this momentum – by winning back customers and controlling costs – the stock may have further room to run. As one UBS analyst put it, investors are watching for an inflection in sales trends next year [27].
Sources: Starbucks Q4 financial report [28] [29]; Associated Press/ABC News (via TheHill) [30] [31] [32]; Reuters analysis [33] [34]; TechStock²/ts2.tech strategy overview [35] [36]; stock analyst consensus (TipRanks) [37]; Nasdaq/Starbucks investor site [38].
References
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