Starbucks CEO Brian Niccol says the company's turnaround is showing up in the numbers, with global comparable sales up 7.9% in fiscal Q3 2026 and EPS guidance raised for the year. The stock has climbed nearly 30% since his hiring was announced, but a 34x forward P/E leaves little room for the comp growth to slow.
Brian Niccol sent an internal memo declaring that Starbucks is back, then took the same message to CNBC's Squawk Box. According to 24/7 Wall St.: "The shine is back on Starbucks and the experience is back in our coffee houses". CNBC noted shares are up roughly 9% since Niccol took over. The stock is up nearly 30% since his hiring was announced.
Comps Accelerate for a Fourth Straight Quarter
The operational numbers back up the memo. Global comparable sales rose 7.9% in fiscal Q3 2026. Non-GAAP EPS of $0.85 beat estimates by 30.79%. Management also raised full-year EPS guidance to a range of $2.55 to $2.65.
The trend has been building for a year: comps went from barely positive in fiscal Q4 2025 to 4%, then 6.2%, then 7.9%. U.S. transactions grew 4.5% in Q3, and food attach hit a Q3 record across U.S. company-operated stores. Non-GAAP operating margin expanded 430 basis points to 14.4%, though tariff refunds helped that figure.
Uplift Remodels Cover a Fraction of the Store Base
Niccol pointed to the store "uplift" program as the most concrete piece of the strategy. He said the effort is about nine months in and has touched well over a thousand coffeehouses so far, with a target of close to 1,500 or more by fiscal year-end.
Set against the footprint, that is a small share of the business. Starbucks ended Q3 with 41,304 stores globally, and the North American company-operated base alone counts 18,371 coffeehouses. The remodel cycle, at roughly $150,000 per uplift, likely runs for years rather than closing out the turnaround.
Valuation Leaves Little Margin for Error
Shares closed at $99.22 on September 10, up 22.8% over one year but down 6.44% over the past month. The trailing P/E is 58x and the forward P/E is 34x. Analysts hold an average price target of $112.23. Reuters framed the next test bluntly: investors now want fatter profit margins.
Revisions are moving in Starbucks' favor. The fiscal 2026 EPS consensus has climbed from $2.3824 ninety days ago to $2.5905, with 28 upward revisions and zero cuts in the past 30 days. Still unresolved: the China divestiture to Boyu Capital changes the growth profile investors are buying, and shareholders' equity sits at negative $7.67 billion.
The dividend holds at $0.62 quarterly with a 65-quarter streak intact. If shares revisit the low $90s and comps stay above 6%, the risk-reward improves; at current prices, much of the turnaround is already priced in.
Source: 24/7 Wall St. via Yahoo Finance
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