Starbucks Lags S&P 500 by 74% as Earnings Drop 47% and Sales Slide Continues

Once upon a time, Starbucks was an extremely popular stock choice. However, its recent history is anything but excellent. The coffee giant’s CEO Brian Niccol says the company is simply in the midst of a turnaround, yet experts say the numbers tell a different story. Despite the fact that the S&P 500 has gained 95% over the past five-year period, Starbucks shares have only climbed a measly 21%. This is quite a massive underperformance for a brand that was once considered a Wall Street darling. Recent earnings are most concerning of all, with store sales declining and per-share earnings dropping a whopping 47%.

In 2025, consumer behavior and labor dynamics are rapidly evolving, especially in the fast-casual and coffee industries. Starbucks’ strategy under Niccol includes streamlining operations, enforcing dress codes, and cutting menu items. He implements these changes while traveling via private jet between Southern California and Seattle. These behaviors have drawn criticism and highlight a disconnect between corporate leadership and investor expectations. Despite any publicly mentioned changes within the company, Wall Street isn’t seeing significant improvements.

This slideshow breaks down the realities behind Starbucks’ supposed turnaround. It explores the recent earnings report, controversial management changes, and the skeptical mindset of investors. Learn why confidence in Starbucks is falling and what it could mean for the coffee brand’s future.

Starbucks Turnaround: Fact or Fiction?

• CEO Brian Niccol claims Starbucks is on a turnaround path.
• Investors remain skeptical as the company underperforms the S&P 500.
• The stock is up only 21% over five years, while the S&P 500 is up 95%.
• Recent earnings and store performance raise serious concerns.

Q2 Earnings Disappoint

• Quarterly revenue increased just 4% to $9.5 billion.
• Comparable store sales fell 2%, with North America dropping 3%.
• Per-share earnings plummeted 47 % to just $0.49.
• Weak sales and declining margins challenge the turnaround narrative.

CEO Niccol’s Track Record

• Niccol touts his past success as a turnaround leader.
• Critics argue he has shown little evidence of progress at Starbucks.
• He insists the company is “ahead of schedule” despite the weak numbers.
• Investors question whether his strategy applies to Starbucks’ unique challenges.

Controversial Management Decisions

• Niccol streamlined the menu to improve speed and service.
• Baristas were required to wear standardized uniforms.
• Some managers were ordered back to the office or risk termination.
• Niccol’s use of a private jet adds to executive scrutiny.

What’s Next for Starbucks?

• The stock ’s poor performance and falling earnings raise red flags.
• Operational tweaks have not translated into financial success.
• Critics believe Starbucks’ best days are behind it.
• Without strong results , investor confidence may continue to erode.

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