"One of the dogs of the stock market is in rally mode. Starbucks Corp. ( NASDAQ: SBUX) stock is up almost 15% this year. The S&P 500 is barely flat. This is a huge departure from Starbucks' longer-term numbers. Over the past five years, the stock is down 7%, while the S&P 500 is 80% higher. There is a bit of optimism about the company's future. Even Jim Cramer, the 70-year-old grandfather of Wall Street analysts, expects CEO Brian Niccol to turn the coffee company around."
"He cut the number of menu items, in part to speed up how quickly customer orders are fulfilled. Some stores were closed and others upgraded. He has set a uniform for store workers and cut some middle management. He will prove (or not) whether what he said on the most recent earnings call is right: "We're a year into our 'Back to Starbucks' strategy, and it's clear that our turnaround is taking hold." The evidence of that has been nonexistent."
Starbucks stock is up almost 15% this year while the S&P 500 is essentially flat and has outperformed Starbucks by about 80% over five years. Some investors express optimism that CEO Brian Niccol can execute a turnaround, with Jim Cramer endorsing Niccol and BofA raising its price target from $106 to $114. Investors will judge the turnaround when Starbucks reports first-quarter 2026 earnings on January 28, with U.S. same-store sales as the crucial metric. Niccol has cut menu items, closed or upgraded stores, introduced a uniform and reduced middle management. Competitive pressure and pricing headwinds from McDonald's and Dunkin' challenge Starbucks' premium positioning.
Read at 24/7 Wall St.
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