Nine Months Later, Starbucks Still Faces Skepticism And Decline Under Niccol's Direction – CoffeeTalk

Starbucks CEO Brian Niccol has faced a difficult time in his tenure as CEO, with investors uncertain if the company will see a third consecutive turnaround. Shares jumped over 21% on August 13, the day Niccol was named CEO, on hopes he would inject the company with new vitality after several quarters of falling sales and pressure from activist investor Elliott Investment Management. However, demand has not yet reversed, Niccol has not shared any financial targets, and the stock remains sluggish.

Niccol’s “Back to Starbucks” initiative emphasizes a simplified menu, freshly baked goods, cups with handwritten messages, and speedier service. He said the company’s previous removal of around 30,000 seats in stores as it prioritized mobile orders hurt the business and would be reversed. Starbucks’ global same-store sales declined 1% for the quarter ending March 30, the fifth straight quarterly contraction.

Analysis from research firm Placer.ai shows regular customers are coming in less often than before Niccol took over. A Reuters review of the company’s analysis derived from tens of millions of cell phone location points shows average monthly visit frequency has declined in every month of 2025 compared to 2024. The average customer visited 2.4 times in February, compared to 2.48 last February. Even a small decrease spread over millions of visitors is meaningful, Placer.ai said. Starbucks did not comment on Placer.ai’s analysis.

Niccol is accelerating staffing increases to all 10,000-plus Starbucks-owned U.S. stores by the end of the summer, rather than to just a third of U.S. stores. Staffing increases will vary by store, with details to be revealed at an investor day “at some point in 2026.” The lack of clarity is making investors hesitant. Shares have stagnated since his August 13 appointment, while the broad-market S&P 500 is up 15%. The stock’s forward price-to-earnings ratio is 33.2, a higher valuation than McDonald’s or Yum Brands.

Dan Ahrens, portfolio manager of AdvisorShares Restaurant ETF, said his fund is currently avoiding Starbucks because of the uncertainty around the turnaround. When Niccol started on September 9, a narrow majority of analysts recommended buying Starbucks stock. Now, more recommend holding or selling. Bernstein analysts said that the staffing surge will cost $1.5 billion to $2 billion in the next two years, but it expects it to reduce turnover and improve same-store sales.

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