Nov. 20, 2025 "Starbucks must face shareholder lawsuit over surprise sales decline": Today I found this article by Jonathan Stempel on BNN Bloomberg:
Starbucks must face a lawsuit claiming it defrauded shareholders by concealing declining sales in the United States and China, its largest markets,
leading to a 16 per cent drop in its stock price after the coffee chain revealed the unexpected weakness.
In a decision late on Wednesday, U.S. District Judge John Chun in Seattle said shareholders can try to prove Starbucks intentionally misled them in a January 2024 analyst call by touting successes in its “reinvention plan.”
These included statements that upgrades in
equipment,
staffing
and scheduling
would create a “better experience” for employees,
and lead to increased customer spending
and loyalty.
Chun said Starbucks could also be sued for saying in a January 2024 regulatory filing there were “no material changes” to risks affecting its business,
including as to whether the reinvention plan would succeed.
Shareholders can also pursue some claims against former Starbucks CEO Laxman Narasimhan. Chun dismissed several other claims.
A Starbucks spokesperson said on Thursday the Seattle-based company intends to continue defending against the allegations.
Lawyers for the shareholders, who are led by three pension plans in New York, did not immediately respond to requests for comment.
Starbucks disappointed investors on April 30, 2024, when it lowered its annual sales forecast and said same-store sales fell 4.4 per cent in its latest quarter,
including declines of three per cent in the United States
and 11 per cent in China.
Analysts expected same-store sales to rise. Starbucks said results were hurt by
economic pressure on consumers,
bad U.S. weather,
competition in China,
and many customers cancelling app orders because wait times were too long
and menu items were unavailable.
The 16 per cent decline in Starbucks’ share price on May 1, 2024,
wiped out about US$16 billion of market value.
Brian Niccol, who became CEO in August 2024, has pursued a “Back to Starbucks” turnaround plan that has focused on
filling orders faster,
simplifying menus,
upgrading stores,
and closing poorly performing stores.
Same-store sales rose one per cent in the latest quarter.
By Jonathan Stempel
(Reporting by Jonathan Stempel in New York; Editing by Rod Nickel)
Jan. 28, 2026 "Starbucks signals U.S. growth revival as CEO’s turnaround takes root": Today I found this article on BNN Bloomberg:
Starbucks recorded its first sales growth in the U.S. in two years on the back of CEO Brian Niccol’s efforts to return the company to its coffeehouse roots, though investors were still concerned about sinking margins.
The company poached Niccol from Chipotle Mexican Grill,
where he revived the burrito chain after a salmonella scare
and rolled out the popular drive-through option ‘Chipotlanes’.
All eyes are now on Starbucks’ first investor day under Niccol on Thursday with expectations that the CEO could unveil a much-awaited strategic update and long-term targets.
“It has been frustrating in terms of the length of this turnaround...
there’s a general feeling (among investors) now that tomorrow is going to be a big day,”
said Nick Setyan, analyst at Mizuho Securities.
Since taking the top job in September 2024, Niccol has pushed for
a simplified menu,
freshly baked food
and cups with handwritten messages
as part of his “Back to Starbucks” initiative.
One of the goals under the plan is to
cut back service times
and improve in-store efficiencies
through its investment-heavy “Green Apron” program,
but there, Niccol is facing
outdated technology
and a splintered supplier network,
Reuters reported.
Starbucks was still at times falling short of its target to keep service under four-minute,
the CEO said on a post-earnings call on Wednesday.
“The strategic investments we are making to fix our operating foundations will take time to flow through to sustainable earnings growth,” Niccol added.
Shares, which have risen about seven per cent since he took charge,
were up about two per cent on Wednesday,
paring most of the early gains.
They have climbed about 14 per cent this year through Tuesday’s close.
Comparable sales rose four per cent in North America in the first quarter.
Money spent per order grew one per cent in the U.S.,
driven by espresso and tea-based beverages
and the increasing popularity of its cold-foam options,
finance chief Cathy Smith said.
Protein-infused drinks, launched late last year, were also drawing in customers, executives said.
Need turnaround on margins
Margins have not risen for two years straight,
hurt by the company’s investments in store operations,
and by import tariffs over the last year on key coffee exporters such as Brazil.
While the U.S. has rolled back tariffs on coffee,
raw bean costs are already high due to the duties paid over last summer.
Margins contracted by 290 basis points in the reported quarter.
“The acceleration in the comparable sales is enough in the near term.
Over the next, let’s say, year, the operating margins need to start improving as well,”
Mizuho’s Setyan said.
Strong 2026 sales forecast
The company projected fiscal 2026 adjusted profit to be US$2.15 to US$2.40 per share, the midpoint of which is below estimates of US$2.35.
It expects tariff pressure to start easing in the back half of the year.
Starbucks estimated fiscal 2026 global same-store sales to grow three per cent or higher, compared with estimates of a 2.94 per cent rise.
In November, Starbucks sold control of its operations in China to Boyu Capital after years of struggling with weak sales in the region.
Sales in the region rose seven per cent in the quarter,
compared with a two per cent rise in the preceding three-month period.
---
Reporting by Juveria Tabassum in Bengaluru; Editing by Sriraj Kalluvila
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