Starbucks (SBUX) stock surged more than 7% on Wednesday as investors cheered an earnings beat and guidance raise as momentum in the turnaround efforts led by CEO Brian Niccol continued.<\/p>\n
In the second quarter, Starbucks posted global same-store sales growth of 6.2%, beating Wall Street’s forecasts of 3.7% growth, according to Bloomberg consensus data. Last year, the company saw a 1% decline in overall same-store sales growth in the second quarter.<\/p>\n
Starbucks reported adjusted earnings per share of $0.50, beating estimates of $0.43 and rising from $0.41 per share reported in the same period last year. Revenue grew to $9.5 billion, beating estimates of $9.14 billion.<\/p>\n
Niccol told Yahoo Finance the quarter was a “culmination of work” that the company been doing over the past 18 months.<\/p>\n
“We wanted to get back to providing great service,” he said. “We said we wanted to get back to … having a great menu and marketing. We said we wanted to get back to having a great coffee house and all those things have been working together … you’re finally seeing it all come together.”<\/p>\n
He added, “The brand is probably stronger than it has been in a long time, and that just really sets us up for a great way to grow from here.”<\/p>\n
Looking ahead, Starbucks raised its full-year profit and same-store sales growth outlooks. For 2026, Starbucks sees global and US comparable store sales growth of more than 5%, up from its previous guidance of 3% or greater.<\/p>\n
Starbucks increased its 2026 earnings per share forecast to a range of $2.25 to $2.45, up from a previous range of $2.15 to $2.40.<\/p>\n
The strong quarter builds on Starbucks’ first quarter, when the company posted its first same-store sales growth in North America and the US in two years.<\/p>\n
“What it really shows is a lot of the initiatives Brian Niccol put in place \u2026 are really taking effect,” Placer.ai head of analytical research R.J. Hottovy told Yahoo Finance. “That can really tie back to some of the remodeling activity they’ve done, particularly some of the store labor investments they’ve done, these are all kind of clicking, and it really starts to tell a positive narrative going forward.”<\/p>\n
Customers are visiting Starbucks locations more frequently and spending more when they do. US same-store sales growth jumped 7.1%, the highest level since late 2024, driven by a 4.3% increase in transactions.<\/p>\n
BTIG’s Peter Saleh said ahead of the report that if Starbucks transactions reached “near mid-single digits in second quarter,” it would be “hard to ignore” that the turnaround is taking hold.<\/p>\n<\/p><\/div>\n
The improvement in transactions also comes as higher gas prices have weighed on consumer sentiment. Niccol said getting consumers to think of Starbucks as a “little luxury” was key.<\/p>\n
“This is a little luxury that really does resonate across all income cohorts,” he said. “If you’re on the lower side of the income scale, the good news is you feel like this is something that you can splurge on.”<\/p>\n
The company is also focused on growth throughout the day.<\/p>\n
“Earlier in the morning, you’re seeing more of the low-income consumer really adapt to the idea of a higher caffeine refresher,” he said to investors on the earnings call. “And later in the day, you’re seeing some of the higher income people take the caffeine down a little lower, and giving themselves the customization that they want later in the afternoon as it relates to a refresher experience.”<\/p>\n
Deutsche Bank analyst Lauren Silberman noted ahead of the earnings release that the improvement in same-store sales growth reflects “benefits from the flywheel effect of better operations (supported by labor investments), strong cadence of relevant innovation and more effective marketing.”<\/p>\n
During the quarter, Starbucks announced it would expand tipping options and pay $1,200 annual bonuses to baristas and managers beginning in July, with the first payout this fall.<\/p>\n
Some employees responded to the update, calling the standards to receive the bonus “impossible to meet.”<\/p>\n
“We set the standards so that it’s achievable,” Niccol replied.<\/p>\n
“Obviously, you have to deliver and hit the standard … that’s just the truth,” he added. “In all bonuses that are set up correctly, it’s an incentive. It’s a reward for achieving great performance, and that’s what we’ve done for our partners all the way through to the hourly barista, and I’m really proud of it because I don’t think really anybody else offers the opportunity to be rewarded for excellence.”<\/p>\n
The company also rolled out scheduled ordering, which Niccol believes will help with speed.<\/p>\n
Starbucks stock has risen 15% year to date, outperforming the 4% gain for the S&P 500 (^GSPC).<\/p>\n Brooke DiPalma is a reporter for Yahoo Finance. Follow her on X at @<\/em>BrookeDiPalma<\/em><\/a> or email her at bdipalma@yahoofinance.com.<\/em><\/p>\n Click here for all of the latest retail stock news and events to better inform your investing strategy<\/strong><\/p>\n<\/p><\/div>\n<\/div>\n<\/div>