Starbucks Stock Rises Near $100 as Investors Bet on Brian Niccol's Turnaround Ahead of Key Earnings Report

NEW YORK — Shares of Starbucks rose nearly 2% on Tuesday, climbing toward the $100 mark as investors continued to bet on the coffee chain's recovery under CEO Brian Niccol ahead of its next quarterly earnings report.

Starbucks shares gained $1.88, or 1.92%, to $99.75 in morning trading on the Nasdaq.

It was not immediately clear whether Tuesday's gain was tied to specific news. The move comes as investors prepare for the company's fiscal fourth-quarter results, which Starbucks typically reports in late October.

'Starbucks is back'

Starbucks has staged a notable recovery since Niccol, the former Chipotle chief executive, took over in September 2024. At the time, the company was struggling with falling sales, long wait times and customer complaints about its stores and pricing.

Niccol launched a "Back to Starbucks" strategy aimed at improving service, simplifying the menu and operations, reducing discounting and restoring the coffeehouse atmosphere that once defined the brand. The company reintroduced seating, revamped its ordering system and added new menu items to draw customers back.

Last month, Niccol declared the two-year turnaround effectively complete.

"Starbucks is back," Niccol said in an interview on CNBC's "Squawk Box."

In a letter to employees, he said the company had returned to growth, delivered positive global same-store sales and improved its margins. Niccol said the company's next priority is renovating thousands of its cafes.

Strong recent results

Starbucks' most recent quarterly results showed the turnaround gaining momentum.

In its fiscal third quarter, which ended June 28, Starbucks reported a 7.9% increase in global comparable store sales, its fourth straight quarter of same-store sales growth. The gain was driven by a 4.2% increase in transactions and a 3.5% rise in the average ticket, a sign that more customers were returning to stores.

Adjusted earnings came in at 85 cents per share on revenue of $9.3 billion, both well above Wall Street expectations.

"This was the quarter our momentum became truly measurable," Niccol said when the results were released.

The company raised its outlook for fiscal 2026, projecting adjusted earnings of $2.55 to $2.65 per share, up from earlier forecasts. It also projected that global same-store sales would rise nearly 6% for the year, with U.S. same-store sales up more than 6%.

Traffic returns

A key measure of Starbucks' recovery has been customer traffic. Earlier this year, the company reported transaction growth for the first time in two years, including among both members and non-members of its loyalty program.

Analysts say rising traffic is especially important because it shows customers are returning, rather than simply paying higher prices.

Starbucks has also focused on speeding up service. The company rolled out scheduled ordering and other changes designed to reduce wait times, particularly during busy morning hours.

China and international changes

Outside the United States, Starbucks has shifted toward a more asset-light business model. Following the formation of a joint venture in China, roughly 90% of the company's international locations are now licensed rather than company-operated, according to Niccol.

Investors often favor licensing arrangements because they can provide steadier profits with lower capital costs.

International same-store sales rose 5.7% in the most recent quarter.

Cost cuts and restructuring

As part of its turnaround, Starbucks has also cut costs. The company has closed underperforming stores and reduced its corporate workforce.

In August, Starbucks said it would cut more than 200 corporate jobs, including about 120 employees on a coffeehouse design and development team who declined to relocate from Seattle to Nashville, Tennessee. Those separations were scheduled to begin Oct. 19 and be completed by Nov. 1.

Challenges remain

Despite the progress, Starbucks still faces headwinds. Higher coffee prices and tariffs have pressured margins, and investment in staffing, store renovations and technology has weighed on profitability.

Consumers also remain cautious about spending amid elevated prices for many goods and services, and competition from other coffee chains and fast-food restaurants remains intense.

Some investors have questioned whether much of the turnaround is already reflected in the stock price, which has risen roughly 30% since Niccol's hiring was announced in August 2024.

What to watch

Investors will be watching Starbucks' upcoming fiscal fourth-quarter results closely for signs that sales growth is continuing and that margins are improving.

Key areas of focus will include U.S. same-store sales, customer traffic, the impact of coffee costs and tariffs, progress on store renovations and any outlook for fiscal 2027.

For now, Tuesday's gain reflects continued confidence among investors that the Starbucks turnaround still has room to run.