Starbucks $SBUX ( ▼ 1.6% ) shares surged after the coffee chain delivered a solid same-store sales beat and gave investors fresh confidence in its turnaround plan. The results suggest new leadership initiatives are starting to translate into stronger customer traffic.
Sales momentum is back
For its fiscal first quarter, Starbucks reported revenue of $9.9 billion, ahead of expectations. Same-store sales grew 4%, well above analyst estimates and marking the second straight quarter of positive comparable growth. That performance helped offset slightly softer earnings per share, which came in just below forecasts.
CEO Brian Niccol said the company’s “Back to Starbucks” strategy is gaining traction, with menu tweaks and promotional efforts helping drive more visits.
China adds a bright spot
Starbucks’ China business also showed improvement, with comparable-store sales rising 7% after a prolonged slowdown. Management highlighted China as a standout performer, even as the company moves forward with plans to sell a majority stake in that segment to an investment group.
Guidance boosts confidence
Starbucks reinstated a full-year outlook and projected same-store sales growth of at least 3%, ahead of Wall Street expectations. It also forecast annual adjusted earnings per share in a range that brackets analyst estimates.
For investors, the combination of improving traffic trends and clearer guidance signals that Starbucks $SBUX’s turnaround may be moving from plan to progress.