Starbucks Charts a New Strategic Course Amid Mixed Quarterly Results

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Investors in Starbucks Corporation are assessing a complex picture following a week of significant developments. The global coffee chain's latest earnings report presented a dichotomy: a bottom-line miss contrasted with a major strategic overhaul that has injected fresh optimism into the market. The central question now is whether CEO Brian Niccol's plan to refocus on core strengths can drive sustainable share price growth.

For its first fiscal quarter, which concluded on December 28, 2025, Starbucks reported revenue of $9.92 billion. This figure represents a year-over-year increase of 5.5% and notably surpassed analyst projections of approximately $9.62 billion. However, elevated costs pressured profitability, resulting in earnings per share (EPS) of $0.56, which fell just short of the consensus estimate of $0.59.

A critical positive signal emerged from the company's domestic operations. Comparable store sales in the United States grew by 4%, driven primarily by a 3% increase in customer transactions. This marks the first instance in two years that Starbucks has recorded growth in U.S. store traffic. Market observers interpret this as an early indication that the company's renewed focus on its core customer experience is beginning to yield results.

A Dual-Pronged Strategic Revamp

During a recent investor day, management outlined an ambitious roadmap extending to fiscal year 2028. A cornerstone of this plan is a fundamental restructuring of the China business. Starbucks is transitioning its operations in the region to a licensing model via a joint venture with Boyu Capital. While retaining a 40% stake, the company anticipates this move will significantly enhance its international profit margins.

Concurrently, Starbucks is launching a digital and operational offensive. The appointment of former Amazon executive Anand Varadarajan as Chief Technology Officer signals a push to streamline in-store processes and boost efficiency. This technological upgrade will be complemented by a new three-tiered rewards program for its over 35 million active loyalty members, scheduled to launch on March 10.

Long-Term Targets and Analyst Sentiment

Looking ahead to fiscal 2028, Starbucks has set an EPS target range of $3.35 to $4.00. The company also aims to expand its operating margin to between 13.5% and 15% by that time. Its store expansion remains aggressive, with plans to open 600 to 650 net new stores globally in the current year. Long-term strategy includes opening roughly 400 new locations annually in the U.S. market.

In response to these strategic announcements, several financial institutions have adjusted their valuations. BMO Capital raised its price target to $120, while Wells Fargo maintains a target of $110. In the near term, shareholder attention turns to the upcoming dividend. A payout of $0.62 per share is scheduled for February 27. To be eligible, investors must hold the stock before the ex-dividend date of February 13.