Starbucks (SBUX) is a global coffee chain founded in 1971. The company is known for its high-quality coffee, which it sells alongside other handcrafted beverages and snacks at company-owned stores.
Headquartered in Seattle, Washington, the company operates across the Americas, Europe, the Middle East, and Asia-Pacific.
Starbucks stock popped 8% on Jan. 29 after the coffee company reported its results for the first quarter of its fiscal 2025. The stock is up 26% in the year to date and set a new 52-week high of $115.70 on Feb. 27.
Starbucks Tops Estimates
Starbucks’s recent first quarter report has investors feeling confident. The company posted a net profit of $780.8 million, translating to a profit of $0.69 per share. The figure beats analysts’ $0.66-per-share estimate. Starbucks reported revenue of $9.4 billion, flat year-over-year and edging past analysts’ $9.3 billion estimate.
Starbucks’s operating margin dipped from 15.8% in the first quarter of 2024 to 11.9% in Q1 2025. Its adjusted EBITDA came to $1.63 billion, also beating Wall Street’s $1.50 billion estimates with a margin of 17.3% during the quarter.
The coffee chain reported store growth from 38,587 to 40,576 while its same-store sales dipped 4% year-over-year. The company has averaged 6.1% annual growth in store count over the last two years showing that, despite the dip in same-store sales, demand is still healthy.
Interestingly, management has abstained from providing guidance for investors as the company goes through its leadership transition.
Layoffs at Starbucks
Starbucks announced its plans to cut 1,100 jobs on Monday, Feb. 24. CEO Brian Niccol shared that management is cutting 1,100 current support partner roles and will close hiring for a “couple hundred” open and vacant positions. Additionally, the company will look to simplify the team structure with smaller groups for higher efficiency and increased accountability.
The laid-off individuals were scheduled to be informed by midday Tuesday, Feb. 25. The company will be sharing a timeline with details about the responsibilities, reporting structure, and more by the end of this week.
Further, the company has also made some changes in its North American leadership teams with Vice President-level management now expected to be present in their Seattle and Toronto offices for at least 3 days a week.
Analysts’ Take on SBUX
Analysts are supporting the recent uptrend in Starbucks with a consensus “Moderate Buy” rating. However, their mean price target of $106.71 is below the current trading price.
On the date of publication, Ruchi Gupta did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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