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SBUX Advances the Back to Starbucks Plan to Strengthen Operations

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Key Takeaways

  • SBUX will close underperforming North America's stores, reducing count by about 1% in 2025.
  • The company plans to upgrade 1,000 stores over the next year as it resumes growth in fiscal 2026.
  • SBUX will cut 900 non-retail roles to shift resources toward store operations and customer service.

Starbucks Corporation (SBUX - Free Report) is taking steps to strengthen operations as it enters fiscal 2026. The company aims to improve the coffeehouse experience and deliver consistent customer service, while building a stronger and more resilient business.

As part of its Back to Starbucks plan, the company has made two decisions focused on placing resources closer to its customers. These changes are expected to support store operations and drive long-term growth.

SBUX to Streamline Coffeehouse Network

Starbucks has been reviewing its North America coffeehouse portfolio under the Back to Starbucks plan. The review highlighted locations where the company cannot deliver the right environment or achieve sustainable financial results. As a result, these coffeehouses will be closed.

Furthermore, after accounting for both openings and closures, the company-operated store count in North America is expected to decline about 1% in fiscal 2025. Starbucks will finish the year with nearly 18,300 stores across the United States and Canada, including both company-operated and licensed locations. Looking ahead to fiscal 2026, the company expects growth to resume and plans to upgrade more than 1,000 stores.

SBUX Reduces Non-Retail Roles

Starbucks is also taking action to lower non-retail costs. The company will eliminate around 900 non-retail roles and close many unfilled positions. Starbucks remains focused on shifting resources toward store operations, customer service, design improvements and innovation to support long-term growth.

The company has reported early gains from recent initiatives. Store upgrades have increased customer visits, length of stay and positive feedback. Higher staffing during peak hours has improved transactions, sales and service times, along with stronger employee engagement. The company views these actions as essential for long-term resilience.

SBUX’s Price Performance

Starbucks’ shares have lost 15.2% over the past six months compared with a 10.4% decline in the industry. The dismal performance can be attributed to decreased global comparable store sales and higher operational expenses tied to its “Back to Starbucks” turnaround strategy. The company continues to face pressure in its core U.S. market, where comparable sales slipped 2% in the third quarter of fiscal 2025 with transaction volumes down nearly 4%.

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Nonetheless, international markets are contributing strongly, with China returning to positive sales growth and regions such as the United Kingdom, Mexico and Turkey showing solid momentum. Along with a growing rewards membership base and upcoming product innovation, these factors are likely to support the company’s long-term growth prospects.

SBUX’s Zacks Rank

Starbucks currently carries a Zacks Rank #4 (Sell).

Stocks to Consider

Some better-ranked stocks in the Zacks Retail-Wholesale sector are BJ's Restaurants, Inc. (BJRI - Free Report) , Groupon, Inc. (GRPN - Free Report) and Dutch Bros Inc. (BROS - Free Report) .

BJ's Restaurants currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.

The company delivered a trailing four-quarter negative earnings surprise of 102.7%, on average. BJ's Restaurants stock has declined 14.6% in the year-to-date period. The Zacks Consensus Estimate for BJ's Restaurants' 2025 sales and EPS indicates growth of 3.3% and 43.5%, respectively, from the year-ago period’s levels.

Groupon sports a Zacks Rank #1 at present. The company delivered a trailing four-quarter earnings surprise of 230.5%, on average. Groupon stock has surged 85.7% year to date.

The Zacks Consensus Estimate for Groupon’s 2025 sales and EPS indicates growth of 2.4% and 153%, respectively, from the prior-year levels.

Dutch Bros presently carries a Zacks Rank #2 (Buy). The stock has inched up 1.9% in the year-to-date period. Dutch Bros delivered a trailing four-quarter earnings surprise of 91.9%, on average.

The Zacks Consensus Estimate for Dutch Bros’ 2025 sales and EPS implies growth of 25% and 38.8%, respectively, from the year-ago levels.

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