Why we chose to keep our Starbucks rating despite strong quarter and investor day
Investor day messaging and an upbeat earnings print reinforced growing confidence in the turnaround story.
TL;DR
- Starbucks announced multi-year financial targets for fiscal 2028, including at least 3% global and U.S. same-store sales growth, at least 5% revenue growth, and earnings per share between $3.35 and $4.
- The company aims for an operating margin of 13.5% to 15% by 2028.
- CEO Brian Niccol's "Back to Starbucks" strategy focuses on simplifying operations, improving store speed, and re-engaging Rewards customers.
- Starbucks made progress on serving every drink in under four minutes.
- U.S. transactions grew for the first time in eight quarters, benefiting both rewards and non-rewards members.
- The Starbucks Rewards program has a record 35.5 million members.
- A remodeled rewards loyalty program with new tiered membership levels (green, gold, reserve) launches March 10 to accelerate sales growth and profits.
- Jim Cramer expressed confidence in the turnaround, advising patience for investors.
- The stock jumped 10% after the earnings release but was down nearly 1% on Thursday; it is up 13% year-to-date.
- The CNBC Investing Club maintains a $100-per-share price target and a 2-rating for SBUX.