Starbucks is back, CEO says, as chain pivots to thousands of cafe renovations

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Brian Niccol marked two years of the "Back to Starbucks" plan by declaring the turnaround complete and outlining a renovation push for thousands of locations

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Starbucks $SBUX chairman and chief executive officer Brian Niccol declared his company's two-year turnaround complete on Thursday and said the chain's next priority is renovating thousands of its cafes. "Starbucks is back," Niccol said on CNBC's "Squawk Box."

Niccol wrote in a letter to employees that the company has "returned to growth, delivered positive global comps and improved margins." The Back to Starbucks plan, which he launched on his second day as CEO in September 2024, centered on improving service quality, simplifying operations, and restoring the coffeehouse environment that had defined the brand.

The current focus is on physical store upgrades. More than 1,000 locations have been renovated over the past nine months, with the company expecting to reach 1,500 or more by the end of the 2026 fiscal year, according to CNBC. Thousands of additional locations are planned for renovation in the next fiscal year. Niccol said that the renovations typically center on seating and lighting changes intended to create a warmer atmosphere for visitors.

"I want to finish the job on uplifting all of our coffeehouses," Niccol said on CNBC, framing the ambition as bringing back the distinctive atmosphere that defines the coffeehouse setting.

Beyond physical upgrades, Niccol said Starbucks is working to keep its menu and brand relevant across more parts of the day. According to CNBC, digital menu boards factor into that effort by allowing Starbucks to highlight different offerings at various points in the day, alongside newer items on the menu such as protein drinks, Energy Refreshers, and fall staples like pumpkin spice drinks.

The turnaround strategy has begun producing results. Starbucks reported a 7.9% rise in global comparable store sales for its fiscal third quarter ended June 28, driven by a 4.2% increase in transaction volume and a 3.5% improvement in average ticket size. The company also raised its full-year adjusted earnings per share guidance to a range of $2.55 to $2.65.

In his letter Thursday, Niccol laid out six forward-looking ambitions for the company, including becoming "the world's greatest customer service company" and expanding its global coffeehouse count. On international operations, he said the company has restructured its China business through a new joint venture. Starbucks transferred a majority stake in its China business to Boyu Capital, and Niccol said on Thursday that both parties are aligned on an ambition to expand the country's store count from its current 8,000 locations to as many as 20,000 over time.

Shares of Starbucks have gained approximately 30% since the announcement of Niccol's hiring in 2024.

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