Starbucks is beginning to show early signs that its turnaround strategy is gaining momentum, despite reporting quarterly earnings that missed expectations and another period of declining same-store sales. The company’s fiscal third-quarter results, released Tuesday evening, revealed a continued drop in same-store sales for the sixth consecutive quarter. However, executives highlighted encouraging trends during their earnings call, noting sequential monthly improvements in customer traffic throughout the quarter.
A key positive indicator came from traffic growth among non-Starbucks Rewards members, a segment that has been shrinking for years and largely blamed for the brand’s recent sluggish sales performance. This uptick suggests that Starbucks may be attracting more occasional customers outside its loyalty program, which could be crucial to driving broader recovery.
Analysts on Wall Street are cautiously optimistic about the company’s prospects. Sharon Zackfia, an analyst at William Blair, emphasized that the focus should be less on the disappointing results and more on early evidence pointing to a potential recovery ahead. RBC Capital Markets’ Logan Reich described the situation as “green shoots getting greener,” citing CEO Brian Niccol’s confidence that the turnaround is progressing faster than initially expected. Key factors supporting this optimism include the accelerated rollout of Starbucks’ new “Green Apron Service” labor program and updates to its mobile app.
The Green Apron Service aims to improve the cafe environment while maintaining fast and efficient service, addressing previous criticisms about in-store experiences. Starbucks also announced plans to introduce new menu items in fiscal 2026, including protein cold foam and enhanced food options. TD Cowen analyst Andrew Charles highlighted these innovations as key drivers that could help boost same-store sales moving forward.
Despite the positive outlook from many analysts, some investors remain skeptical about the pace of the turnaround. The company’s recovery is taking longer than Wall Street initially anticipated, delaying expectations for when same-store sales will return to growth. Starbucks shares rose modestly by less than 1% in Wednesday morning trading after gaining as much as 5% in extended trading following the earnings release. The stock has increased roughly 2% year-to-date, valuing the company at about $106 billion.
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