Starbucks sales rebound signals early success of turnaround

Starbucks Corp. delivered stronger-than-expected quarterly results, boosting confidence that CEO Brian Niccol’s turnaround strategy is gaining momentum.

Global comparable-store sales rose 4% in the most recent quarter, exceeding even the most optimistic analyst estimates. The performance followed a positive prior quarter, marking a clear rebound after a prolonged slowdown. Shares jumped as much as 9.5%, the biggest intraday gain since April.

The company also issued its first full-year outlook under

Niccol, forecasting comparable sales growth of at least 3% in fiscal 2026, above consensus estimates. In the U.S., Starbucks’ most critical market, comparable sales rose 4%, driven by higher transactions and increased spending per visit.

Niccol’s strategy centers on improving service speed, simplifying the menu, and enhancing the in-store experience across Starbucks’ global footprint of tens of thousands of locations. About 200 stores have been renovated so far, with more than 1,000 expected to be refreshed by the end of the fiscal year.

Starbucks is also assessing its digital strategy, scaling back pickup-only locations and refining systems to better balance mobile and in-store orders after earlier tech-led initiatives disrupted barista workflows and customer experience.

Profitability remains under pressure, as operating margins declined last quarter and adjusted earnings came in at 56 cents per share, below Wall Street expectations, due to higher labor costs and rising coffee prices. Starbucks said these pressures should ease in the second half of the year and expects adjusted earnings per share of $2.15 to $2.40, with operating margins improving modestly year over year.

As part of its broader restructuring, Starbucks has identified $2 billion in cost reductions over the next couple of years, closed underperforming North American stores, cut corporate roles, and agreed to sell a 60% stake in its China business to Boyu Capital.