Starbucks posted its first quarterly earnings growth in more than two years as the coffee giant’s turnaround heated up.
Seattle-based Starbucks resumed adding stores in its second fiscal quarter that ended March 29 for a global total of 41,129. Starbucks ended the quarter with just under 17,000 locations in the United States and 7,991 in China, its main growth markets.
The chain reiterated plans to open as many as 650 locations across the globe this year — including 150 to 175 new cafes in the U.S., and 450 to 500 locations in other global regions — after closing hundreds last year, laying off corporate employees and redesigning its cafes as part of the turnaround.
The most recent quarter marked a milestone as the coffee giant “delivered growth on both the top and bottom line for the first time in more than two years,” CEO Brian Niccol, hired in 2024 to reverse a sales slide, told analysts Tuesday. "We believe this quarter reflects the turn in our turnaround, but we know there is more work to be done."
The chain has also finished “uplifts” at more than 300 locations to make its cafes more inviting for customers by boosting staffing and upgrading ambience and service and expects to have more than 1,000 upgrades finished in its top markets by the end of the fiscal year, Niccol said Tuesday.
Starbucks said at its investor day in January that it expects to open over 2,000 new stores by 2028, with 400 in the U.S., amid annual revenue growth of 5% or more.
Global store sales rose 6.2% from the year-earlier period, fueled by more customer visits as the chain looks to fill its shops as part of a multiyear turnaround launched last year called Back to Starbucks. U.S. sales jumped 7.1%, driven by increased customer traffic.
Starbucks also raised its outlook for the year, expecting sales growth of 5% or greater globally, up from the previous forecast of 3% or higher in January, and adjusted earnings per share of $2.25 to $2.45, up from $2.15 to $2.40.
Starbucks this month finalized plans to open a roughly 250,000-square-foot office in Nashville, Tennessee, as the firm ramps up its East Coast expansion.
The company will maintain its corporate headquarters in Seattle but is planning to shift its supply chain operations to the future Tennessee office sometime this year.