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.
Starbucks to Close 250 Stores: Is This a Positive Reset for Now?
Read MoreHide Full Article
Key Takeaways
Starbucks will close about 250 North American coffeehouses that fall short on experience or returns.
SBUX expects $300 million in restructuring charges and now targets about 440 new global stores.
Starbucks plans to accelerate its uplift program, targeting at least 1,500 locations by fiscal 2026.
Starbucks Corporation (SBUX - Free Report) is set to close approximately 250 coffeehouses in North America later this week, as it sharpens the store portfolio under the “Back to Starbucks” strategy. The closures target locations that do not meet Starbucks’ expectations for customer and partner experience or lack a viable path to acceptable financial performance.
The move follows management’s comments during the fiscal third-quarter earnings call. Starbucks said it was gaining better visibility into underperforming coffeehouses and could close locations that were not generating appropriate returns.
CEO Brian Niccol explained that some stores were developed in unsuitable locations, while others may require remodeling that does not make economic sense. Starbucks plans to address such locations and potentially establish new stores in better trade areas.
The portfolio reset comes despite improving operating trends. In the fiscal third quarter, North America comparable sales increased 8.1%, while the same for the United States rose 7.9%, supported by transaction and ticket growth.
Starbucks expects the closures to generate approximately $300 million in restructuring charges. The company has also reduced its fiscal 2026 expectation for net new global coffeehouse openings to roughly 440 from the previous target of 600-650.
At the same time, Starbucks is investing in its remaining locations. Management plans to accelerate its coffeehouse “uplift” program, targeting at least 1,500 locations by the end of fiscal 2026.
The strategy reflects a shift toward fewer, stronger and better-performing locations, while directing capital toward stores where improvements are showing tangible results.
SBUX’s Price Performance, Valuation & Estimates
Starbucks’ shares have gained 11.7% over the past year, while the industry declined 12.4%. The stock has also outperformed industry players like Dutch Bros Inc. (BROS - Free Report) and McDonald's Corporation (MCD - Free Report) .
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 29.94X, above the industry’s average of 20.14X. On the other hand, stocks like Dutch Bros and McDonald's are trading at P/E multiples of 35.46X and 17.38X, respectively.
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
Starbucks to Close 250 Stores: Is This a Positive Reset for Now?
Key Takeaways
Starbucks Corporation (SBUX - Free Report) is set to close approximately 250 coffeehouses in North America later this week, as it sharpens the store portfolio under the “Back to Starbucks” strategy. The closures target locations that do not meet Starbucks’ expectations for customer and partner experience or lack a viable path to acceptable financial performance.
The move follows management’s comments during the fiscal third-quarter earnings call. Starbucks said it was gaining better visibility into underperforming coffeehouses and could close locations that were not generating appropriate returns.
CEO Brian Niccol explained that some stores were developed in unsuitable locations, while others may require remodeling that does not make economic sense. Starbucks plans to address such locations and potentially establish new stores in better trade areas.
The portfolio reset comes despite improving operating trends. In the fiscal third quarter, North America comparable sales increased 8.1%, while the same for the United States rose 7.9%, supported by transaction and ticket growth.
Starbucks expects the closures to generate approximately $300 million in restructuring charges. The company has also reduced its fiscal 2026 expectation for net new global coffeehouse openings to roughly 440 from the previous target of 600-650.
At the same time, Starbucks is investing in its remaining locations. Management plans to accelerate its coffeehouse “uplift” program, targeting at least 1,500 locations by the end of fiscal 2026.
The strategy reflects a shift toward fewer, stronger and better-performing locations, while directing capital toward stores where improvements are showing tangible results.
SBUX’s Price Performance, Valuation & Estimates
Starbucks’ shares have gained 11.7% over the past year, while the industry declined 12.4%. The stock has also outperformed industry players like Dutch Bros Inc. (BROS - Free Report) and McDonald's Corporation (MCD - Free Report) .
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 29.94X, above the industry’s average of 20.14X. On the other hand, stocks like Dutch Bros and McDonald's are trading at P/E multiples of 35.46X and 17.38X, respectively.
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.