Jan 28 (Reuters) – Starbucks beat estimates for first-quarter comparable sales on Wednesday as demand rebounded in the U.S. after two years, in a sign CEO Brian Niccol’s turnaround efforts were bearing fruit and sending shares up 10%.
The global coffee chain also reinstated its full-year targets ahead of its first investor day under Niccol on Thursday in New York. Shares have risen about 14% so far this year.
“We are now delivering the top-line results we set out to achieve,” Niccol said on a post-earnings call.
Niccol has focused on reviving the company’s coffeehouse culture in the U.S. to bring back consumers and fend off newer rivals.
Starbucks has trimmed nearly 30% of its offerings in U.S. stores at the end of 2025. Over the last year, the company has shed items such as olive-oil-infused beverage line Oleato, and several “frappuccino” beverages to focus on its key lattes.
It is also offering items such as protein cold foam and protein lattes, which also command more premium pricing.
Comparable sales rose 4% in North America, marking their first gains in nearly two years. The company has shed hundreds of underperforming stores, including its flagship Seattle roastery, and has also tried to lower back-end operational costs.
Niccol has also looked to cut back service times and improve in-store efficiencies, but is facing outdated technology and a splintered supplier network, according to a Reuters report.
In the reported quarter, customer traffic was also up on key promotional days such as the annual Red Cup Day in December, as well as its holiday merchandise collection item, the Bearista Cold Cup in November, according to data from Placer.ai.
Starbucks expects fiscal 2026 global same-store sales to grow 3% or higher, compared with estimates of a 2.94% rise.
The company reported a 4% rise in quarterly global comparable sales, compared with estimates of 2.25%, according to data compiled by LSEG.
Still, margins continued to shrink, hurt by import tariffs on key coffee exporters such as Brazil last year.
While Trump has rolled back tariffs on coffee, raw bean costs are already high due to the duties paid over last summer. Tariffs, as well as the company’s investment in its store operations, contracted its margins by 290 basis points in the reported quarter.
The company expects fiscal 2026 adjusted profit to be $2.15 to $2.40 per share, the midpoint of which is below estimates of $2.35.
(Reporting by Juveria Tabassum in Bengaluru; Editing by Sriraj Kalluvila)
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