Starbucks CEO Promises Growth, But Won't Commit to Timeline
Starbucks CEO Brian Niccol has expressed optimism for the company's future growth, but has refrained from providing specific projections. Despite this, investors remain positive, as evidenced by Wednesday's 5% share increase after better-than-expected earnings.
The company's recent earnings report highlighted sequential sales improvements in the US, attributed to faster mobile order processing and the introduction of charges for dairy alternatives. Niccol expressed confidence in a turnaround, stating, "I think we're definitely in the middle of a turnaround."
Niccol, who joined Starbucks in 2024, faces the challenge of meeting investors' expectations. Starbucks' recent quarter saw a 4% decline in global same-store sales, due to reduced discounts and longer lines. International sales also faced pressure, particularly in China.
Despite these headwinds, Bernstein Research remains cautiously optimistic, noting that "things don't seem to be getting worse." Starbucks has discontinued its guidance for the current fiscal year, citing investments in marketing, staffing, and store experience.
Niccol is focused on enhancing the customer experience by making stores more welcoming and reducing wait times through improved mobile ordering. However, he declined to provide a timeline for the return of growth in the US.
Wall Street analysts have revised their earnings expectations for Starbucks, with Citi analyst Jon Tower maintaining a Neutral rating. Tower cited concerns about coffee price volatility and the need for a clearer anchor for earnings expectations.