Group 1: Company Challenges and Strategies - Starbucks has faced increasing challenges since Brian Niccol became CEO, with the ambitious "Return to Starbucks" plan struggling to revitalize growth due to unexpected changes in consumer behavior [2] - The company has seen a decline in customer traffic and same-store sales, with North American traffic expected to remain negative until 2026 [2][8] - Bernstein projects that Starbucks' investments in labor, estimated to reach $1.5 to $2 billion over two years, will lay the foundation for recovery [2] Group 2: Financial Performance - In Q2 of fiscal year 2025, Starbucks reported revenue of $8.76 billion, a 2.3% year-over-year increase, but below Wall Street's expectation of $8.82 billion [6] - Same-store sales fell by 1%, with a 4% decline in the U.S. market, while the Chinese market saw a 4% increase in transactions but a 4% drop in average ticket price [6] - Adjusted operating margin decreased by 460 basis points to 8.2%, and net profit dropped by 50.3% to $384.2 million, with earnings per share falling 50% to $0.34, missing analyst forecasts [6] Group 3: Analyst Expectations and Stock Performance - Bernstein maintains an "outperform" rating for Starbucks, raising the target price from $90 to $100, citing labor plan transparency and profit margin stability as catalysts for long-term growth [9] - Evercore ISI analyst David Palmer also raised the target price from $95 to $105, reflecting increased market confidence in Starbucks' ability to overcome current challenges [9] - The stock has risen 24% over the past 52 weeks and 9% in the last month, with an expected adjusted P/E ratio of 38 and a sales multiple of 2.9, both above industry averages [4][5]