Starbucks ' turnaround is showing some progress, but investors are still waiting for the bigger payoff: a meaningful recovery in profits. CEO Brian Niccol's "Back to Starbucks" plan — aimed at improving the cafe experience — has succeeded in improving traffic and getting comparable-store sales growing again. The problem: Niccol's remedies, such as adding baristas to speed up service, are not cheap...
Starbucks ' turnaround is showing some progress, but investors are still waiting for the bigger payoff: a meaningful recovery in profits. CEO Brian Niccol's "Back to Starbucks" plan — aimed at improving the cafe experience — has succeeded in improving traffic and getting comparable-store sales growing again. The problem: Niccol's remedies, such as adding baristas to speed up service, are not cheap and profitability remains below historic levels. As Niccol's two-year anniversary approaches in September, investors want tangible signs that stronger sales are beginning to translate into better margins. They get a chance to spot them Tuesday night, when the coffee chain reports fiscal 2026 second-quarter results. Analysts expect Starbucks' adjusted operating margin to come in at 8.3%, according to FactSet. That would be a modest uptick from 8.2% a year earlier. It was 10.1% in the busy holiday quarter ended in December. Both figures are a far cry from the mid-to-upper teens full-year operating margin that Starbucks routinely delivered before the pandemic. It has some on Wall Street asking a pointed question with major implications for the stock: Will Starbucks ever be as profitable as before? The performance of Starbucks shares during Niccol's tenure reflects some skepticism. The stock is up roughly 7% since Niccol took over on Sept. 9, 2024. In the same period, an equally weighted basket of consumer discretionary stocks in the S & P 500 has advanced about 16%. The stock's highest close under Niccol came more than a year ago: $115.81 a share on Feb. 28, 2025. Still, Jim Cramer has liked what he's seen so far under Niccol's leadership and has been willing to give the CEO time thanks to the magic he worked at Chipotle . "A lot of people are impatient, I'm not. I just want to be with Brian," Jim said during the April Monthly Meeting . We trimmed our Starbucks position last week, locking in some gains after the stock reached $100 per share. We thought it was prudent to take ...
J Studios Stock index futures were mixed before the bell as investors awaited more earnings while U.S.-Iran updates remained in the forefront. Now, here are 5 news stories that broke overnight to watch out for: Merz criticizes U.S. strategy: Friedrich Merz said Iran’s leadership is humiliating the U.S., arguing Washington entered the conflict without a clear strategy as negotiations stall. Speakin...
J Studios Stock index futures were mixed before the bell as investors awaited more earnings while U.S.-Iran updates remained in the forefront. Now, here are 5 news stories that broke overnight to watch out for: Merz criticizes U.S. strategy: Friedrich Merz said Iran’s leadership is humiliating the U.S., arguing Washington entered the conflict without a clear strategy as negotiations stall. Speaking during a visit to western Germany, Merz said Iran is either negotiating “very skillfully" or deliberately avoiding talks, underscoring growing European concern over the lack of diplomatic progress. ING raises oil outlook: ING increased its ICE Brent price forecasts, citing prolonged disruption in the Strait of Hormuz and slower-than-expected recovery in oil flows. The bank said its earlier assumption of a gradual resumption by April has not materialized , highlighting persistent geopolitical risk that continues to support elevated crude prices. Domino’s flags sector weakness: Domino's Pizza ( DPZ ) CEO Russell Weiner warned that rival fast-food chains may report weaker quarterly sales, pointing to winter weather disruptions and softer consumer sentiment. The comments follow Domino’s own weaker-than-expected Q1 same-store sales and a cut to its full-year U.S. outlook, making it an early signal for broader industry trends. Dalio warns on wealth taxes: Ray Dalio said proposed wealth taxes could destabilize financial markets as structural economic changes accelerate. While highlighting artificial intelligence as a driver of productivity gains and lower costs, Dalio cautioned that it may also lead to job displacement and widen the gap between asset owners and the broader population. Nvidia announces accounting change: Nvidia ( NVDA ) said its chief accounting officer, Donald Robertson, will retire effective May 4 and transition to a finance role through July 1. The company named former Intel ( INTC ) accounting chief Scott Gawel as his replacement, following his departure from...
The UK’s government bonds are sliding on pressure from surging oil prices and political risks, sending the 10-year yield back above 5% for the first time in a month. The 10-year rate , a proxy for the country’s borrowing costs, has now risen in six of the past seven trading sessions, climbing nearly 30 basis points in under two weeks. The 30-year yield is also surging, touching its highest level s...
The UK’s government bonds are sliding on pressure from surging oil prices and political risks, sending the 10-year yield back above 5% for the first time in a month. The 10-year rate , a proxy for the country’s borrowing costs, has now risen in six of the past seven trading sessions, climbing nearly 30 basis points in under two weeks. The 30-year yield is also surging, touching its highest level since September — and not far off the most since 1998 . The selloff comes as a fresh spike in Brent oil prices above $111 a barrel increases worries about the sustained impact of the war in the Middle East on inflation. It’s a challenging backdrop for the Bank of England’s policymakers meeting on Thursday, who are expected to stress test multiple scenarios that reveal how it might react to a prolonged energy price shock. While bonds fell across the world on Tuesday, the gilt market faces additional pressure due to the uncertainty clouding UK politics, with Prime Minister Keir Starmer facing a high-stakes vote later Tuesday. The higher borrowing costs are also painful for the country’s fragile fiscal headroom . “Gilts remain the weakest link heading into Thursday’s MPC, with global pressures compounded by renewed domestic fiscal and political noise,” said Evelyne Gomez-Liechti , a multi-asset strategist at Mizuho International. The vote in Parliament Tuesday will determine whether Starmer will face an investigation into his assurances to lawmakers that due process had been followed in the appointment of Peter Mandelson as US ambassador. Pressure on his leadership has already been building ahead of local elections on May 7, where his Labour Party is expected to do badly . Read more: Labour’s Lowest Ebb in Century in Wales Poses Peril for Starmer If the political backdrop continues to sour, it’s possible that the 10-year yield could rise as high as 5.50% “in a stressed scenario,” said Peter Kinsella , global head of FX strategy at Union Bancaire Privee, in a Bloomberg TV interv...