Starbucks Shares Up 8% On Earnings Beat: New CEO Will 'Fix The Business The Right Way,' Analyst Says

Starbucks Corporation (SBUX) shares surged by 8% on Thursday, following the company's fiscal first-quarter earnings report that beat analyst expectations. The strong performance was driven by the coffee giant's turnaround efforts, led by new CEO Brian Niccol, who took the helm in August 2022. Niccol's strategy, focused on "fixing the business the right way," is paying off, as analysts and investors alike express confidence in the company's future prospects.

Starbucks reported earnings per share (EPS) of $0.69, surpassing the consensus estimate of $0.67. Revenue also came in ahead of expectations, with $9.4 billion in total revenue, compared to the $9.3 billion forecast by analysts. The company's same-store sales (SSS) declined by 4%, a better-than-expected result given the 5.5% decline anticipated by analysts.

Niccol's initiatives, aimed at improving the customer experience and driving growth, are showing signs of success. The company's U.S. same-store sales (SSS) decline of 4% was better than the expected 5% drop, while international SSS also performed better than expected. Niccol's focus on simplifying the menu, investing in store partners, and eliminating fees for non-dairy milk customizations has contributed to the improved performance.

Analysts are optimistic about Starbucks' prospects under Niccol's leadership. Goldman Sachs analyst Christine Cho maintained a Buy rating and raised her price target to $111, citing the company's "modestly positive" SSS growth and potential for further sequential improvements. Piper Sandler analyst Brian Mullan also maintained an Overweight rating and a price target of $110, expecting U.S. SSS to turn positive in the fiscal second quarter.

Starbucks' turnaround is still in its early stages, but the company's recent performance suggests that Niccol's strategy is on the right track. As the company continues to execute on its initiatives, investors can expect further improvements in earnings and revenue growth. With a strong balance sheet and a committed CEO at the helm, Starbucks is well-positioned to capitalize on the growing demand for coffee and convenience.



In conclusion, Starbucks' strong fiscal first-quarter earnings report, driven by Niccol's turnaround efforts, has boosted investor confidence in the company's future prospects. As the coffee giant continues to execute on its initiatives, analysts and investors alike remain optimistic about the company's ability to "fix the business the right way" and drive long-term growth. With a focus on improving the customer experience, investing in store partners, and simplifying the menu, Starbucks is well-positioned to capitalize on the growing demand for coffee and convenience.