Starbucks presented a multi-year financial roadmap at its investor day in New York City, laying out explicit targets to recapture profitability levels last seen before the pandemic. The plan, announced at the company’s first investor day since Brian Niccol became CEO in September 2024, calls for net revenues to grow by 5% or more annually and for diluted earnings per share to reach between $3.35 and $4.00 by fiscal year 2028.
Niccol, who suspended financial guidance after taking the helm, told investors earlier this week the turnaround effort was "ahead of schedule" following a report of U.S. sales growth for the first time in two years. At the investor day, executives laid out how they intend to translate that early momentum into measurable medium-term results.
Targets and margins
Starbucks is aiming to approach its pre-pandemic operating margin territory. The company reported an operating margin of 15.4% in 2019, which contracted through the pandemic and further declined following significant labor-related investments to 7.9% in 2025, according to its annual filings. By fiscal 2028, management’s goal is to lift the operating margin to a range of 13.5% to 15%.
CFO Cathy Smith said the margin improvement will come primarily from cost savings - for example, trimming the cost of store remodels - and to a lesser degree from targeted menu price increases. She framed the approach as a combination of structural cost actions and selective price adjustments rather than broad-based price hikes.
International expansion and licensing
Executives highlighted international growth as a key driver of higher margins. Starbucks plans to add more than 2,000 net new stores overseas by 2028, compared with an expected 400 net new company-owned stores in the United States over the same period.
The company said the anticipated licensing arrangement for its China stores, in partnership with Boyu Capital, will be structured in a way that boosts margins. Brady Brewer, head of the international division, said international operating margin could exceed 20% by 2028, and characterized the global opportunity succinctly: "The world wants more Starbucks."
Loyalty changes and revenue levers
Starbucks also unveiled a revamped rewards program that returns to a tiered model. Chief brand officer Tressie Lieberman quantified one path to incremental sales: if half of loyalty members visited one additional time per year, the company would see roughly $150 million in added annual revenue. Executives described the loyalty changes as a material and measurable lever to lift spend per customer and frequency.
Supply chain fixes and AI
Operationally, the company said it will invest in supply-chain improvements and deploy AI initiatives to better manage inventory and resupply cadence. Starbucks set a target to have 90% of company-owned coffeehouses resupplied on a daily basis by the end of 2026. Management acknowledged long-standing product shortages tied to deep-seated supply-chain kinks and said it has made progress reducing out-of-stocks over the prior six months, without providing specific figures.
Market reaction and analyst questions
Shares of Starbucks moved lower following the presentation, slipping about 2% on Thursday after the long-term targets were disclosed. During the investor day Q&A, Lauren Silberman of Deutsche Bank described the EPS range provided by management as "too wide," highlighting investor desire for more precise near-term guidance.
Finance leadership framed the plan as a return to a period of strong investor returns. "For most of our history, Starbucks delivered exceptional investor returns. We are determined to bring exceptional value again," Smith said at the event.
Management emphasized several discrete levers - cost discipline on remodels, selective pricing, a China licensing structure, faster international expansion, loyalty program redesign and supply-chain modernization powered by AI - as the route to restoring margins and accelerating revenue. While executives point to early improvements, certain operational outcomes and the precision of long-term guidance remain open questions for investors.