Starbucks’ Turnaround Is Starting to Stick — Customers Are Back, but Speed Still Slips

With input from Business Insider, CNBC, the New York Times, and the Financial Times.

Starbucks got a nice bounce after its Q1 results: same-store sales were up 4% globally, transactions finally grew for the first time in two years, and the stock jumped in early trading as investors cheered signs the “Back to Starbucks” plan is working.

CEO Brian Niccol called the quarter a momentum moment. “Our turnaround plan is coming to life,” he told investors, pointing to top-line growth driven by more people showing up and spending a bit more per visit. US and North America comps rose 4%, international comps rose 5%, and China – a bright spot – was up about 7% after the company moved to restructure its business there.

Here’s the skinny on the quarter:

• Revenue: $9.92 billion, up 6% and beating Street estimates.
• Adjusted EPS: $0.56 vs. $0.59 expected.
• Net income: $293.3 million (26 cents), down sharply from a year earlier – margins took a hit from turnaround costs, higher coffee prices and tariffs.
• Transactions: grew 3% – the first quarterly uptick in two years.
• Stores: Starbucks opened 128 net new locations in the quarter and plans 600–650 net new openings in fiscal 2026.

Niccol and CFO Cathy Smith said the increase in visits and ticket size is exactly what the chain needed to arrest the slump. They credited holiday hits (remember that viral “Bearista” cup?) plus menu tweaks and the “Green Apron Service” push – more staff during peak hours, simplified menus and a heavier focus on in-store hospitality and speed.

That last bit is important: Niccol has made a four-minute service target during busy times a marquee part of the turnaround. The good news: stores hitting peak-hour goals are getting customers their drinks fast. The kicker: slower periods still lag, and Niccol admitted the chain hasn’t fully nailed four-minute service across the board.

“There still is opportunity… to get the entire business – every transaction – to be under four minutes,” he said.

Translation: progress, but more work ahead.

Starbucks also updated guidance and strategy. For fiscal 2026 it laid out an adjusted EPS range of $2.15–$2.40 and expects at least 3% same-store sales growth. Executives will unpack long-term targets and more details at an investor day in New York on Thursday.

Why margins are under pressure: the company is spending to staff stores and improve service – and coffee prices plus tariffs haven’t helped. That’s why profit dipped even as sales climbed. Niccol is betting that fixing service, fun product drops and tighter operations will translate into real earnings improvement down the road.

Bottom line: the turnaround looks real – more foot traffic, better ticket sizes and early wins in China – but Starbucks still needs to make its service improvements universal. For now, it’s momentum with work left on the checklist.