We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
SBUX Bets on Refreshers to Boost Afternoon Traffic: Will it Pay Off?
Read MoreHide Full Article
Key Takeaways
Starbucks is using Refreshers, Matcha and new food offerings to build afternoon traffic.
Refresher revenues grew double digits, aided by Energy Refreshers, Blue Coconut and Mango.
Blended Refreshers and planned Spritzers add new ways to sustain customer engagement.
Starbucks Corporation (SBUX - Free Report) is increasingly turning to the Refreshers platform to unlock afternoon traffic, a key growth opportunity under its Back to Starbucks strategy. The company’s third-quarter fiscal 2026 results suggest the strategy is gaining traction, although sustaining momentum will depend on continued innovation and execution.
U.S. comparable sales increased 7.9% in third-quarter fiscal 2026, supported by 4.2% transaction growth and 3.6% higher average ticket. While growth was broad-based across dayparts, management acknowledged that morning transactions remain the strongest, leaving significant room to build the afternoon occasion. Refreshers emerged as an important catalyst. U.S. Refresher revenues grew at a double-digit rate year over year, with customizable Energy Refreshers, Blue Coconut and Mango helping attract customers at different times of day. CFO Cathy Smith highlighted Refreshers as an afternoon beverage occasion, alongside Matcha and new food offerings such as wraps.
Starbucks also sees differentiation through flavor, customization and its beverage craftsmanship. The company plans to test sparkling “Spritzers” and has already introduced blended Refreshers, creating additional avenues for customer engagement.
The opportunity is meaningful, but competition is intensifying as other quick-service restaurants expand their beverage offerings. Still, Starbucks’ improving store execution, stronger afternoon merchandising and expanding menu innovation provide reasons for optimism.
Refreshers Face Growing Competition From BROS and MCD
Starbucks’ push to expand the afternoon daypart comes as competition in cold and customizable beverages intensifies. Dutch Bros Inc. (BROS - Free Report) is a particularly relevant rival, with a beverage-focused model built around customizable cold drinks, energy beverages and flavored refreshers. BROS’ strong positioning among younger consumers could make it a formidable competitor as Starbucks seeks to increase afternoon visits. Starbucks itself acknowledged that competitors are becoming more active in the refresher space, making differentiation through flavors, customization and beverage craftsmanship increasingly important.
McDonald’s Corporation (MCD - Free Report) also competes for afternoon beverage occasions through its expanding McCafé lineup and cold beverages. Although its core business is broader than Starbucks, the large restaurant footprint and value-oriented positioning give McDonald’s significant reach among consumers seeking convenient drinks and snacks.
For Starbucks, the advantage lies in its established Refreshers platform and continued innovation, including blended and sparkling variants. However, maintaining customer interest will require Starbucks to consistently refresh its offerings while converting beverage experimentation into repeat afternoon traffic.
SBUX’s Price Performance, Valuation & Estimates
Starbucks’ shares have gained 21.2% over the past year, while the industry declined 8.2%.
SBUX’s One-Year Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, SBUX trades at a forward price-to-earnings (P/E) multiple of 32.04, above the industry’s average of 21.49.
SBUX’s P/E Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for SBUX’s fiscal 2026 earnings per share (EPS) implies a year-over-year increase of 21.6%. EPS estimates for fiscal 2026 have increased in the past 60 days.
View the Zacks #1 Rank List
Image: Bigstock
SBUX Bets on Refreshers to Boost Afternoon Traffic: Will it Pay Off?
Key Takeaways
Starbucks Corporation (SBUX - Free Report) is increasingly turning to the Refreshers platform to unlock afternoon traffic, a key growth opportunity under its Back to Starbucks strategy. The company’s third-quarter fiscal 2026 results suggest the strategy is gaining traction, although sustaining momentum will depend on continued innovation and execution.
U.S. comparable sales increased 7.9% in third-quarter fiscal 2026, supported by 4.2% transaction growth and 3.6% higher average ticket. While growth was broad-based across dayparts, management acknowledged that morning transactions remain the strongest, leaving significant room to build the afternoon occasion.
Refreshers emerged as an important catalyst. U.S. Refresher revenues grew at a double-digit rate year over year, with customizable Energy Refreshers, Blue Coconut and Mango helping attract customers at different times of day. CFO Cathy Smith highlighted Refreshers as an afternoon beverage occasion, alongside Matcha and new food offerings such as wraps.
Starbucks also sees differentiation through flavor, customization and its beverage craftsmanship. The company plans to test sparkling “Spritzers” and has already introduced blended Refreshers, creating additional avenues for customer engagement.
The opportunity is meaningful, but competition is intensifying as other quick-service restaurants expand their beverage offerings. Still, Starbucks’ improving store execution, stronger afternoon merchandising and expanding menu innovation provide reasons for optimism.
Refreshers Face Growing Competition From BROS and MCD
Starbucks’ push to expand the afternoon daypart comes as competition in cold and customizable beverages intensifies. Dutch Bros Inc. (BROS - Free Report) is a particularly relevant rival, with a beverage-focused model built around customizable cold drinks, energy beverages and flavored refreshers. BROS’ strong positioning among younger consumers could make it a formidable competitor as Starbucks seeks to increase afternoon visits. Starbucks itself acknowledged that competitors are becoming more active in the refresher space, making differentiation through flavors, customization and beverage craftsmanship increasingly important.
McDonald’s Corporation (MCD - Free Report) also competes for afternoon beverage occasions through its expanding McCafé lineup and cold beverages. Although its core business is broader than Starbucks, the large restaurant footprint and value-oriented positioning give McDonald’s significant reach among consumers seeking convenient drinks and snacks.
For Starbucks, the advantage lies in its established Refreshers platform and continued innovation, including blended and sparkling variants. However, maintaining customer interest will require Starbucks to consistently refresh its offerings while converting beverage experimentation into repeat afternoon traffic.
SBUX’s Price Performance, Valuation & Estimates
Starbucks’ shares have gained 21.2% over the past year, while the industry declined 8.2%.
SBUX’s One-Year Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, SBUX trades at a forward price-to-earnings (P/E) multiple of 32.04, above the industry’s average of 21.49.
SBUX’s P/E Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for SBUX’s fiscal 2026 earnings per share (EPS) implies a year-over-year increase of 21.6%. EPS estimates for fiscal 2026 have increased in the past 60 days.
EPS Trend of SBUX Stock
Image Source: Zacks Investment Research
SBUX’s Zacks Rank
SBUX stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.