Starbucks Shares Face Headwinds from Trade Policy Uncertainty

Starbucks stock faces pressure from proposed US tariffs and supply chain risks, adding complexity to its internal turnaround plan and ongoing margin challenges.

Concerns over newly proposed U.S. tariffs have introduced fresh volatility for Starbucks equity at the start of the trading week. The focus of investor anxiety centers on potential disruptions to international supply chains and the subsequent pressure on corporate profitability. This market uncertainty arrives as the coffee giant is navigating a significant internal transformation, with policy shifts from Washington adding another layer of complexity.

Internal Transformation Meets External Pressure

Operationally, Starbucks is in the midst of executing its "Back to Starbucks" turnaround plan, which showed early promise in the company's first-quarter results released in late January. Globally, comparable sales increased by 4%, primarily driven by higher transaction volume. However, management continues to grapple with contracting operating margins. This squeeze is attributed to ongoing investments in workforce compensation, persistently elevated prices for green coffee, and pre-existing tariff barriers. A critical question for analysts is whether the new strategic initiatives can sustainably offset this cost pressure alongside the threat of additional trade restrictions.

The stock reacted negatively to Monday's news of a proposed 15% global tariff by the U.S. administration, slated for a 150-day duration. Companies reliant on seamless cross-border trade flows are viewed as particularly vulnerable to such measures. Shares closed the Monday session at €80.41. This movement extends a pattern of volatility observed in recent months: while the stock has gained approximately 12% since the start of the year, it remains down more than 25% on a year-over-year basis.

Governance Tensions and Labor Developments

Beyond market and policy concerns, Starbucks faces internal discord at the board level. An investor group is urging shareholders to vote against the re-election of two directors at the annual meeting scheduled for March 25. This action stems from criticism regarding the board's oversight of the company's labor relations.

On a separate front, a resolution appears imminent in one area of labor unrest. A nationwide barista strike that began in November 2025 is set to conclude on Tuesday, February 24, potentially easing one operational headwind.

Path Forward Hinges on Policy and Execution

The near-term outlook for Starbucks is now heavily contingent on two factors: the final implementation details of the new trade policy and the company's success in achieving internal stability. The market will gain its next significant insight into the business's resilience within this altered economic landscape when the company reports its second-quarter results on May 5, 2026, following the March shareholder meeting.