sales projected to grow 4% by 2025, thanks to Brian Niccol’s strategy

For first time in two years, Starbucks reported growth in its U.S. sales, marking a turning point after several quarters of stagnation. The rebound coincides with the implementation of new strategies under the leadership of Brian Niccol, the company’s current CEO.

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The firm, which trades on Nasdaq as SBUX.O, has reconnected with its core through a plan called “Back to Starbucks”, an initiative that includes everything from protein-infused beverages to in-store operational changes, such as simplified menus and more efficient service times.

“Strategic investments we are making to fix our operational foundations will take time to translate into sustainable earnings growth,” Niccol said during the earnings call.

What changes did Brian Niccol introduce with the Back to Starbucks strategy?

Since taking the helm in September 2024, Brian Niccol—formerly CEO of Chipotle Mexican Grill—has focused on restoring the classic coffeehouse experience, emphasizing human connection, operational efficiency, and menu redesign.

Key actions under the new leadership include:

• ⇒ Menu simplification featuring freshly baked food items,
• ⇒ Customized cups with handwritten messages,
• ⇒ Reduced in-store service times (though still above the 4-minute target),
• ⇒ Reduction of underperforming stores, including the closure of the flagship Seattle roastery,
• ⇒ Encouraging consumption of cold beverages with foam and tea options.

Additionally, Niccol is also facing structural challenges such as a fragmented supplier network and outdated operational technology, according to Reuters reports.

Starbucks sales in the latest quarter of 2025

In the first quarter of fiscal year 2026, global comparable sales rose 4%, exceeding market expectations, which had projected an increase of just 2.25%, according to LSEG data. In North America, growth reached 4%, driven by:

• ⇒ A 1% increase in average ticket size in the United States, fueled by a preference for espresso-based drinks, tea, and cold-foam options.
• ⇒ An increase in the number of transactions at company-operated stores, something that had not occurred in eight quarters.

For the first time in seven quarters, the company managed to reverse the sustained decline in comparable sales, a key indicator of operational health.

What are Starbucks’ expectations for 2026?

The company reaffirmed its annual goals with a positive outlook for the future. Starbucks projects that global comparable store sales will grow at least 3% in fiscal year 2026, above the market’s prior expectation of 2.94%.

Regarding earnings, the company anticipates adjusted earnings per share (adjusted EPS) between $2.15 and $2.40, with the midpoint below the analyst consensus estimate of $2.35 per share.

This optimism comes ahead of Niccol’s first Investor Day, which will take place this Thursday, January 29, in New York.

What is happening with Starbucks in China and how do tariffs affect it?

Despite difficult years in the Chinese market, Starbucks reported an improvement in regional sales, with 7% growth in the quarter, compared to 2% in the previous period.

The company also announced in November that it sold control of its China operations to Boyu Capital, as part of an effort to adapt to local conditions and stabilize performance.

However, pressure on margins persists. Although President Donald Trump reduced coffee tariffs, the company continues to deal with the effects of past tariffs that increased raw material costs, particularly Brazilian coffee beans. As a result, margins contracted by 290 basis points during the reported quarter.

How did the market react to the results?

Starbucks shares have posted a positive performance so far this year, rising by approximately 14%. Following the earnings announcement and improved outlook, the stock jumped 9% in early trading hours.

This movement suggests that investors are beginning to respond with confidence to Niccol’s strategy, despite the structural challenges the company still faces.

Starbucks Financial Data

• * Total net revenues: Increased 3% to $37.2 billion in fiscal year 2025, compared with $36.2 billion in fiscal year 2024.
• * Company-operated store revenues: Increased by $979 million, primarily driven by net new company-operated store growth and the conversion of 113 licensed stores to company-operated stores.
• * Licensed store revenues: Decreased by $155 million, mainly due to lower product and equipment sales and lower licensee royalties in North America, the impact of the acquisition of 23.5 Degrees Topco Limited, and unfavorable foreign currency translation effects.
• * Other revenues: Increased by $184 million, primarily due to higher Global Coffee Alliance revenues and increased sales of cocoa butter to third parties.
• * Consolidated operating income: Decreased to $2.9 billion in fiscal year 2025, compared with $5.4 billion in fiscal year 2024.
• * Fiscal 2025 operating margin: 7.9%, a contraction of 710 basis points compared with 15.0% in fiscal year 2024. This contraction was mainly due to:
• * Restructuring and impairment costs (approximately 240 basis points).
• * Diluted earnings per share (EPS): Decreased to $1.63 in fiscal year 2025, compared with $3.31 in fiscal year 2024.
• * Capital returned to shareholders: $2.8 billion in fiscal year 2025 through dividends.
• * Dividends: A cash dividend of $0.62 per share was declared in the fourth quarter of fiscal year 2025, payable on November 28, 2025, with an expected payout of approximately $704.8 million.
• * Long-term debt: $16.2 billion in face value as of September 28, 2025.

Store openings and closures (Fiscal 2025):

• * Total global stores: Surpassed 40,000 stores.
• * Global total: 21,514 stores as of September 28, 2025.
• * North America: 11,018 stores (554 opened, 697 closed, 143 net closures).
• * International: 10,496 stores (707 opened, 180 closed, 639 net openings).
• * Restructuring closures: 627 stores closed in the fourth quarter of fiscal year 2025 as part of the “Back to Starbucks” restructuring plan.

Licensed stores:

• * Global total: 19,476 stores as of September 28, 2025.
• * North America: 7,293 stores (252 opened, 222 closed, 30 net openings).
• * International: 12,183 stores (749 opened, 372 closed, 265 net openings).
• * New markets: The first café opened in Iceland, marking the 89th global market.

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