Starbucks Is Back, Turning Momentum Into Long-Term, Sustainable Growth

Core Insights - Starbucks is focusing on a transformation plan called "Back to Starbucks," aiming for long-term sustainable growth through customer-centric strategies and innovative offerings [1][4] - The company is committed to enhancing customer service, menu innovation, and marketing to drive engagement and sales [1] Financial Framework - Starbucks expects Non-GAAP Earnings Per Share to be between $3.35 and $4.00 by fiscal 2028, with a consolidated operating margin of 13.5% to 15% [1] - The company plans to open over 2,000 net new stores globally, including approximately 400 in the U.S., contributing 2% to 3% of consolidated revenue from new stores [1] - Projected global and U.S. comparable store sales growth is expected to be 3% or greater, with consolidated net revenue growth of 5% or greater [1] Turnaround Progress - The "Back to Starbucks" strategy is showing early signs of success, with plans to add over 25,000 café seats in the U.S. by the end of fiscal 2026 [2] - The Green Apron Service model has improved service times and customer satisfaction, with same-store sales growth reported in the U.S. and major global markets [2] Loyalty Program Innovation - A reimagined Starbucks Rewards program will launch on March 10, featuring three tiers: Green, Gold, and Reserve, aimed at enhancing member engagement and value [1][4] - The program is expected to drive nearly 60% of U.S. company-operated revenue in fiscal 2025, with small increases in member engagement potentially unlocking significant revenue [1] Menu Innovation Strategy - Starbucks is implementing a disciplined menu innovation strategy to capture customer interest across all dayparts, including new globally inspired food items and beverages [2] - The company aims to create a new afternoon occasion for customers, enhancing its offerings beyond the morning rush [2] Operational Enhancements - Investments in technology and equipment, such as next-generation espresso machines and AI tools, are aimed at improving service efficiency and customer experience [2] - The average service time across café and drive-thru locations has improved to less than four minutes [2] Global Growth Opportunities - Starbucks plans to accelerate international growth, particularly in China, with a goal of doubling its international coffeehouse footprint and adding 15,000 to 20,000 new locations in the region [2] - The company is also exploring up to 5,000 new coffeehouse opportunities in the U.S., with potential for further growth as average unit volumes increase [2]