Starbucks (SBUX) CEO Faces Doubts Nine Months Into Turnaround

Starbucks (SBUX, Financials) CEO Brian Niccol entered with high expectations; nine months in, the results remain lukewarm. The former Chipotle and Taco Bell chief promised a reset simplified menus, more staff, and a cozier cafe experience but investors are still waiting for a clear financial roadmap.

Shares jumped 21% the day Niccol was named CEO in August 2024; since then, they've stalled. Same-store sales fell 1% last quarter the fifth straight decline and foot traffic has dipped every month this year compared to 2024, according to Placer.ai data reviewed by Reuters.

Niccol says results will follow; he's accelerating staffing increases to all 10,000-plus company-owned U.S. stores this summer. But analysts are cautious; no earnings targets have been offered, and the stock trades at a forward P/E of 33 higher than McDonald's (MCD, Financials) or Yum Brands (YUM, Financials).

TD Cowen downgraded the stock to Hold in May; AdvisorShares' Dan Ahrens said the fund is steering clear until the turnaround shows results. Bernstein estimates staffing plans could cost up to $2 billion over two years a hefty bet on retention and service speed.

Critics say some changes cut against Starbucks' brand; unionized workers have protested new dress codes and policies requiring non-customers to pay for restrooms. Starbucks says those updates came after employee and customer input.

Niccol still has backing from former CEO Howard Schultz; at a June event in Las Vegas, Schultz praised his successor and said he's never been more optimistic.

The company has promised more clarity at an investor day in 2026; until then, Wall Street will be watching for signs that Niccol's third act can match his earlier hits.