CEO Brian Niccol Just Announced Incredible News for Starbucks Investors
The past couple of years have been filled with uncertainty for Starbucks (SBUX -1.28%) shareholders. The company delivered consistently higher financial and operating results — and then the bottom dropped out. The combination of economic uncertainty and complacency drove tepid results, and the backlash was both swift and severe. Starbucks stock was punished, falling 32% over several months last year.
More recently, however, things are looking up. CEO Brian Niccol has engineered an impressive turnaround. Just last week, Starbucks reported the company’s biggest-ever fall menu launch in North America.
Image source: Starbucks
It’s the Great Pumpkin (Spice)
In a press release, the company revealed that Aug. 25 marked the strongest fall launch day in Starbucks history. The record-setting day signaled the return of the company’s perennial favorite — the Pumpkin Spice Latte.
From the press release:
More than two decades after the Pumpkin Spice Latte debuted, it remains a seasonal icon, bringing customers together around familiar flavors, comforting rituals, and moments of connection.
In addition to returning favorites like the Pumpkin Spice Latte and Pumpkin Cream Cold Brew, Starbucks unveiled the new Iced Pumpkin Cream Shaken Espresso, which was a hit with java fans. The company also introduced the Hedgehog Cake Pop, which “delivered record-breaking single-day sales for fall launch, making it Starbucks’ top-selling fall cake pop ever.”
While this might not seem like a big deal, this is the latest sign the coffee purveyor is back.
Last month, Starbucks announced the return of its fan-favorite Unicorn Frappuccino for a limited run. The special event drew customers in droves, as the company sold more than 2 million of the frosty beverages, fueling a record-setting weekend for Starbucks and the biggest Saturday sales day in company history.
A turnaround for the ages? Maybe…
There’s no denying that the comeback Niccol has engineered thus far has been nothing short of remarkable, but even he admits there’s still more work to do. That said, Starbucks’ most recent results are impressive.
For its fiscal 2026 third quarter (ended June 28), Starbucks delivered its fourth consecutive quarter of global same-store sales growth, after a seven-quarter drought. Comps increased 7.9%, driven by a 4.2% increase in transactions and a 3.5% increase in the average ticket. Revenue was down just 1% year over year to $9.3 billion, though that decline was partially due to the divestiture of its China operations. As a result, adjusted earnings per share (EPS) climbed 70% to $0.85.
Starbucks raised its full-year 2026 outlook and is now guiding for U.S. and global comps of 6% or more, up from its previous forecast for 5% growth issued just last quarter.
The company is on track for an impressive Q4, with a record-setting special promotion and a record fall menu launch. Investors will be watching closely to ensure this strategy continues to bear fruit, but things are looking positively caffeinated for Starbucks.
The stock is up 24% so far this year, nearly double the 12.75% return of the S&P 500. Starbucks is no longer a screaming bargain, selling for 34 times next year’s expected sales. However, if Niccol’s “Back to Starbucks” strategy continues to gain traction, that multiple might prove to be a bargain.
