Starbucks Corp (NASDAQ: SBUX) Q2 financials are not at all indicative of how the company’s “Back to Starbucks” strategy has been proceeding in recent months, says Brian Niccol, the chief executive of SBUX.
In a post-earnings interview with CNBC, the industry mogul said Starbucks is finding tremendous success with its ongoing turnaround even though the improvements are not yet reflected in the numbers.
SBUX missed Street estimates in its fiscal second quarter, and that too by a significant margin. Still, Niccol asserted that Starbucks stock remains an attractive long-term holding.
Including this week’s decline, SBUX shares are down about 30% versus their year-to-date high.
Starbucks pilot programmes are showing great results
According to Brian Niccol, the multinational is making significant progress on the turnaround, but “a lot of it is actually happening below the surface.”
Starbucks already has two pilot programmes in place across hundreds of its US stores, both of which are resulting in improved speeds, increased transactions, and better comps.
As the coffee chain continues to scale these new ideas and do the “right thing” for its customers and partners, the financial performance will follow, he added.
All in all, customers are getting the “Starbucks experience that they love” at these locations, and that will likely begin driving numbers up as we proceed through the remainder of 2025.
SBUX urges investors to ignore EPS number
Starbucks plans on revamping the digital experience and its rewards programme in 2026 as well to fully “deliver on what we know this brand is capable of.”
CEO Brian Niccol also urged investors during the CNBC interview not to focus on the EPS number during the turnaround as SBUX is currently investing more in labour rather than automation.
In order for Starbucks to connect with its customer and offer that differentiated experience that it’s globally known for, we need to “figure out the right staffing and the right deployment so that we get the growth we need,” he added.
Note that the Nasdaq listed firm is improving its cafes with “premium touches”, including better seating to deliver that “differentiated experience” as well.
Starbucks’ business in China remains strong
Starbucks shares remain attractive as the coffee company is not so far seeing “nationalism” hurt its business in China amidst the largest Asian economy’s ongoing trade war with the US.
In fact, Q2 was the best quarter for the company’s China business in a while, revealed Brian Niccol in his interview with CNBC.
“Starbucks continues to be a really strong brand in China. We’re definitely going to be a long-term player in China.” Note that Starbucks shares currently pay a healthy dividend yield of 3.05%, which makes it all the more exciting to own ahead of a potential recession in the back half of 2025.
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