Starbucks CEO Pledges Growth but Withholds Projections; Wall Street Remains Optimistic
Driven by robust earnings, Starbucks shares soared 5% on Wednesday. Despite a 4% decline in global same-store sales, the company highlighted improving sales trends in the US, fueled by enhanced mobile ordering and the elimination of upcharges for dairy substitutes.
CEO Brian Niccol, who took over in September 2024, acknowledged the ongoing turnaround efforts and expressed confidence in the company's strategies. He emphasized the focus on enhancing the customer experience by restoring the cozy ambiance and welcoming service of traditional Starbucks stores.
Niccol also outlined efforts to streamline the mobile order and pay process to reduce wait times and improve barista efficiency. While he refrained from issuing growth projections for the current fiscal year, investors remain optimistic about the company's prospects.
Analysts have adjusted their earnings expectations downward, citing challenges such as rising coffee prices and the impact of upcoming changes. Despite these factors, Starbucks remains a topic of debate among analysts, with some maintaining a Neutral rating due to concerns about long-term profitability.