TLDR
- CEO Brian Niccol announced café makeovers as the next phase of Starbucks’ “Back to Starbucks” turnaround plan
- Over 1,000 renovations completed in the last nine months, with thousands more planned for the next fiscal year
- Same-store sales rose 7.9% in the most recent quarter, with EPS of $0.85 beating the $0.66 consensus
- Wall Street holds a mixed view, with a consensus “Hold” rating and an average price target of $110.30
- National Pension Service increased its SBUX stake by 1.4%, acquiring 37,412 new units to hold 2.8 million worth roughly $285.7 million
Starbucks (SBUX) stock moved higher after CEO Brian Niccol laid out plans to renovate the company’s café locations. SBUX opened at $100.04 on Thursday and has climbed 21% over the past year, within a 52-week range of $77.99 to $110.51.
Niccol made the comments in a media interview, calling café makeovers the next chapter of the “Back to Starbucks” turnaround strategy now in its second year. The plan is focused on improving how customers feel inside Starbucks locations and reminding them what they liked about the brand.
More than 1,000 renovations have already been completed over the past nine months. Thousands more are planned for the next fiscal year across Starbucks‘ 40,990 locations globally, including nearly 17,000 in the U.S.
Most of the work is cosmetic rather than structural. Niccol said the changes center on things like adding more seating and softer lighting to make the spaces feel more welcoming.
Turnaround Gaining Traction
The numbers back up the strategy. In the most recent quarterly results reported July 29, Starbucks posted EPS of $0.85, beating the $0.66 consensus estimate by $0.19. Revenue came in at $9.32 billion, ahead of the $9.17 billion analysts had expected.
Same-store sales rose 7.9%, driven by a strong showing in the U.S. Revenue was still down 1.4% year over year, but the beat on earnings suggests the turnaround is finding its footing.
Starbucks set its FY2026 EPS guidance at $2.55 to $2.65. Analysts on average are forecasting $2.64 EPS for the full year, putting guidance right in line with expectations.
Analyst Views Stay Mixed
Wall Street isn’t all-in just yet. The stock carries a consensus “Hold” rating with an average price target of $110.30, based on ratings from MarketBeat data. That target would represent around 10% upside from Thursday’s open.
DA Davidson raised its target from $102 to $110 in late July, keeping a neutral rating. Citigroup lifted its target from $108 to $112, also neutral. Stephens started coverage with an overweight rating in May. Bernstein moved in the opposite direction, cutting SBUX from outperform to market perform in early August.
TipRanks data shows a slightly more optimistic picture, with 12 Buy and eight Hold recommendations among 20 analysts, and an average price target of $119, implying 19% upside.
On the institutional side, National Pension Service picked up 37,412 units in Q2, raising its stake by 1.4% to 2,795,886 units worth approximately $285.7 million. Institutional investors overall hold 72.29% of the company.
CEO Brady Brewer sold 2,229 units on September 4 at an average of $105.60 under a pre-arranged Rule 10b5-1 trading plan, a transaction valued at $235,382.
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