Starbucks Charts a Three-Year Course Back to Peak Performance

NEW YORK—Starbucks executives, led by CEO Brian Niccol, presented investors with a detailed three-year financial plan this week, asserting that the company’s turnaround strategy is gaining traction. The roadmap targets a return to pre-pandemic profitability by 2028, banking on customer traffic, cost-cutting, and a major shift in how it operates in China.

Speaking to CNBC, Chief Financial Officer Cathy Smith pointed to recent results as proof of momentum. Global sales at established stores rose 4% in the first quarter of fiscal 2026, fueled by a 3% increase in customer visits—the first uptick in U.S. transactions in two years. For the full year, the company expects comparable sales growth of at least 3%.

The core of the plan relies on drawing people back in, not just raising prices. A renewed focus on service speed, dubbed Green Apron Service, has cut peak wait times. A redesigned customer loyalty program launches this month, offering more flexible rewards. "Great execution creates better experiences, which drives repeat visits," said Chief Operating Officer Mike Grams.

Financially, Starbucks aims for operating margins between 13.5% and 15% by 2028. Achieving that hinges on over $2 billion in planned savings from supply chain improvements, cheaper store remodels, and technology like AI for drive-thru orders. "Margin growth is first going to come from probably not pricing for us," Smith told CNBC. "Pricing is going to be our last lever."

The most significant structural change is a pending joint venture for its China business. The deal with Boyu Capital, expected to close later this year, would give the partner a majority stake, valuing the China unit at over $13 billion. The move provides capital to accelerate store growth in lower-tier cities, with a long-term goal of nearly doubling its international footprint.

While near-term profits are being reinvested, the company’s shares have climbed 15% since the start of 2026. The message to Wall Street was clear: after a period of struggle, Starbucks believes it has found its footing again.

Source: Webpronews