Starbucks turnaround plan hits costly snags

Core Insights - Starbucks is undergoing a corporate turnaround under CEO Brian Niccol, initiated with the "Back to Starbucks" plan aimed at revitalizing the brand and customer experience [4][5]. Financial Performance - In Q1 fiscal year 2026, Starbucks reported U.S. comparable transaction growth for the first time in eight quarters, with North America and U.S. comparable stores up 4%, driven by a 3% increase in comparable transactions and a 1% rise in average ticket [6][8]. - Consolidated net revenues increased by 6% to $9.9 billion, with global comparable store sales rising by 5% [8][9]. - In China, comparable store sales rose by 7%, attributed to higher transaction volume and average ticket size [9]. Strategic Initiatives - The "Back to Starbucks" plan focuses on four key areas: empowering baristas, enhancing morning service, reestablishing Starbucks as a community coffeehouse, and effectively communicating the company's story [5][7]. - The company is doubling down on its loyalty program, which may impact profits but aims to strengthen customer engagement [5]. Store Expansion - Starbucks opened 128 net new stores in Q1, bringing the total to 41,118 stores, with 52% being company-operated and 48% licensed [9].