Starbucks' Prudent Brand Investment Is Luring Consumers, but Near-Term Costs Are Hefty

Starbucks has fallen victim to a competitive restaurant landscape, as its value proposition has been missing the mark with consumers. As such, we see the firm’s strategic pivot as prudent, with an emphasis on customer experience, a warm atmosphere, an efficient service model, effective advertising, and product innovation. In our view, these moves should help restore brand clout, support its premium standing, and revive comparable sales growth. This underpins our view that Starbucks will return to positive comp sales growth in fiscal 2026, following two years of low-single-digit declines in North America (74% of fiscal 2025 revenue).