Starbucks is spending $1 billion to convert as many as 9,000 company-operated North American stores into warmer, more comfortable spaces under CEO Brian Niccol's "Back to Starbucks" strategy. The upgrades cost roughly $150,000 per store, far below previous renovations, and can generally be completed overnight without closing stores; about 1,500 are expected to be finished by the end of September, with an eventual target of 8,000 to 9,000 locations. The push follows a 7.9% rise in global comparable-store sales in the latest quarter, with transactions up 4.2% and average ticket up 3.5%, and U.S. comparable sales also up 7.9%. Starbucks has raised its fiscal 2026 outlook to adjusted EPS of $2.55 to $2.65 and global comparable-sales growth of roughly 6%, but profitability remains the harder part of the turnaround: Reuters reported global operating margins have fallen to 12.9% from 15.8% two years earlier, while North American margins declined to 13.6% from 21%. The stock trades at roughly 38.29x forward earnings, above its five-year average of 31.38x, leaving little room for a recovery that stops at higher sales.
Starbucks CorporationStarbucks is spending $1B on store remodels under 'Back to Starbucks' while raising FY2026 EPS/comparable-sales guidance, but margins have fallen sharply (12.9% from 15.8%) and the stock trades at a rich 38.29x forward earnings.
