Starbucks is back — at least that’s what executives said Thursday during the company’s investor presentation in New York.
“Starbucks is back today,” said Tressie Lieberman, brand director. “One in three consumers say Starbucks is their first choice for coffee or tea away from home.”
His proclamation comes more than a year after CEO Brian Niccol joined the company and launched a turnaround strategy, of course titled “Return to Starbucks.” The plan was largely aimed at improving the coffee chain’s in-store experience, after years of prioritizing mobile orders and profits at the expense of customers and employees. The strategy included small touches, like reintroducing the condiment bar and requiring baristas to use Sharpies to write personal messages, as well as larger investments, like hiring more baristas and revamping its cafes at $100,000 apiece.
“Frankly, Starbucks is back, here in the United States and around the world,” Niccol said Thursday.
The company’s latest financial results appear to show that customers are coming back and that the turnaround is happening. As a result, this year, Starbucks plans to look to the future rather than the past.
“In fiscal year 2026, we are going to move to the offensive game and innovate,” Niccol said. “We have not completed our Return to Starbucks plan or our broader transformation, but I am confident in our strategy, our progress, the pace of change and the opportunities that lie ahead.”
By fiscal 2028, the coffee chain expects same-store sales globally and in the United States to increase by at least 3%, revenue to increase by at least 5% and earnings per share to increase by $3.35 to $4. The company also plans to open more than 2,000 cafes globally in fiscal 2028, including 400 net new company-owned locations in the United States.
“This is just one milestone in our turnaround. Our ambitions extend well beyond this timeline,” Niccol said.
In the coming months, Starbucks plans to reintroduce tiers to its loyalty program, launch Energy Refreshers and more efficient espresso machines, all in an effort to meet these new financial goals.
For fiscal 2028, Starbucks is also targeting consolidated operating margins of between 13.5% and 15%. To reach pre-pandemic margins, the company plans to increase sales and cut costs by $2 billion, Chief Financial Officer Cathy Smith told CNBC’s Kate Rogers.
“For us, pricing will be our last lever,” Smith said. “It’s really important that our customers see great value.”
Starbucks investors didn’t seem as confident as executives Thursday: The company’s shares fell more than 1% in morning trading. The stock has fallen about 12% over the past year, bringing Starbucks’ market value down to about $109 billion. In addition to skepticism about the company’s turnaround, investor concerns about a broad decline in consumer spending and rising coffee prices have weighed on the company’s valuation.
“Just the beginning”
The investor day comes a day after the company released its first-quarter earnings report.
For the first time in two years, the coffee chain’s traffic increased, fueling same-store sales growth of 4%. A year ago, the company’s same-store sales fell 4% while transactions declined 6%.
The company has made progress on some of its goals, like making each drink in less than four minutes, CEO Brian Niccol said Thursday morning on CNBC’s “Squawk Box.”
“It’s really just the beginning,” Niccol said of the company’s turnaround.
But even as Starbucks’ turnaround strategy is paying off in terms of revenue, investments in its restaurants and workforce weighed on profits during the fiscal first quarter. The company’s quarterly earnings per share fell short of Wall Street estimates.
Executives also shared Wednesday the company’s first annual guidance since Niccol suspended its outlook more than a year ago, shortly after taking the helm at Starbucks. For fiscal 2026, Starbucks expects adjusted earnings per share of between $2.15 and $2.40 and global and U.S. same-store sales growth of at least 3%.
Menu changes, like the protein cold foam, have helped Starbucks attract loyal, infrequent customers, Niccol told CNBC’s Andrew Ross Sorkin. In the future, the company plans more menu innovations, as well as changes to its rewards program and an enhanced digital experience, he added.
Much of this innovation will, of course, focus on Starbucks drinks. This spring, the coffee chain plans to launch a premium, sugar-free version of its chai, Lieberman said during the investor presentation.
Starbucks will also introduce Energy Refreshers, the latest expansion of its $2 billion beverage line. The new additions will contain more caffeine than the original Refreshers, which give drinkers about the same boost as a caffeinated soda.
Starbucks’ pivot to China
The executives also shared more details about the company’s international operations, which will undergo a major transformation when Starbucks forms a joint venture with Boyu Capital to manage its business in China, the company’s second-largest market.
Once the transaction closes in the second quarter of fiscal 2026, pending regulatory approval, Boyu will hold up to 60% interest in the joint venture.
Although the deal will result in lower international revenue, the division’s asset-light model is expected to increase Starbucks’ profits in the long term. Over the past decade, McDonald’s And Coca-Cola have pursued similar strategies, refranchising their international restaurants and bottlers, respectively, in order to reduce operating costs and increase profits.
In fiscal 2025, Starbucks’ international margins were 13%; assuming the joint venture is formed, the company expects margins to reach several dozen dollars, according to Brady Brewer, CEO of Starbucks International.
Guidance for fiscal 2026 and 2028 assumes that the company will continue to operate Starbucks retail stores in China. Although the company expects its profit margins to increase under the plan, overall profits may not increase quickly.
Under the joint venture model, the company’s earnings per share in fiscal 2028 would decline by about 15 cents, Smith said.
“I want to say that this is part of our current plans for the Chinese market,” Smith said. “We fully expect, with our new partner, to see higher growth in China… and so I think we would be able to offset some of that in the future.”
