Brian Niccol, the CEO of Starbucks (SBUX), told Yahoo Finance that the coffee chain is “definitely in the middle of a turnaround.” Although he is promising improved growth, he hasn’t provided specific projections yet. Nevertheless, Wall Street remains optimistic, with shares rising after the company’s better-than-expected earnings report. Indeed, Niccol pointed to improved sales trends in the U.S. that were driven by efforts to speed up mobile orders and adjust pricing for dairy substitutes.
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However, the company’s latest quarter still showed a 4% decline in global same-store sales, with North America and U.S. sales dropping 4%. International sales also struggled, with a 4% decline, including a 6% drop in China. In addition, operating profit margins fell by 510 basis points from the previous year.
Despite these challenges, Niccol remains focused on improving the Starbucks experience, which includes making stores feel more welcoming and by improving mobile ordering. As a result, Niccol remains confident that Starbucks will return to growth thanks to these strategic initiatives.
Is Starbucks a Buy or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SBUX stock based on 14 Buys, six Holds, and three Sells assigned in the past three months, as indicated by the graphic below. After a 17% decline in its share price over the past year, the average SBUX price target of $107.95 per share implies less than 1% upside potential.
