Starbucks sees long-term growth from CEO’s turnaround plan

Starbucks Corp. further solidified confidence in its turnaround plan by providing long-term financial targets that impressed investors.

Earnings will be in a range of $3.35 to $4 a share by fiscal 2028, the world’s largest coffee chain said during an investor day presentation Thursday. Analysts on average estimated $3.51 a share.

Comparable sales will grow at least 3% through fiscal year 2028, the company said. Wall Street expected gains of 3.8% in 2027 and 2028.

Chief Executive Officer Brian Niccol has a history of setting the “bar at a level that can be beaten,” Baird analyst David Tarantino wrote in a research note. Baird is “more optimistic” the company is positioned to deliver earnings per share above $4 by 2028.

The company’s stock gained 2.2% in premarket trading on Thursday. The shares fell about 8% last year, compared with a roughly 16% gain for the S&P 500 Index.

That guidance builds on the company’s 2026 outlook. On Wednesday when the chain reported its first quarter, it said comparable sales for the current fiscal year through September would gain 3%, slightly above estimates.

The growth trajectory provides more evidence that investments by Niccol in areas such as speeding up service are working.

The chain said Wednesday that comparable sales last quarter rose 4%, the most since the CEO took over in 2024. Its North America business, its largest and the focus of the investments, grew for the first time in two years.

Niccol has thus far focused on restoring growth through enhanced customer service, a simplified menu, and store renovations all aimed at driving repeat customer visits and attracting new patrons.

Despite progress on that front, questions have lingered over Starbucks’ path toward profit growth following the intense period of investment across those focus areas.

Profits have fallen by double-digit percentages each quarter during Niccol’s tenure after he spent heavily on adding labor to stores and closing hundreds of underperforming locations.

But Thursday’s earnings guidance may have alleviated some of those concerns.

“Our plan is working,” Niccol said at Thursday’s presentation in New York.