Starbucks CFO on financial outlook for 2026 and beyond
Speakers
Cathy Smith
— CFO, Starbucks
Summary
Starbucks CFO Cathy Smith discusses the company's investor day, long-term financial guidance through 2028, and progress on its turnaround plan. She outlines targets for 3%+ global comps, margin expansion to 13.5%-15%, cost savings and AI-driven productivity, and China growth through a new Boyu joint venture. She also says coffee and tariff pressures are abating, supporting the outlook.
- Starbucks held investor day and issued long-term financial guidance through 2028.
- Management sees the Back to Starbucks turnaround working and targets 3%+ global comparable sales.
- The margin expansion target is 13.5%-15%, driven by topline leverage and cost savings rather than pricing.
- Starbucks is using technology and AI, including green dot assist, to improve productivity.
- China growth is expected to accelerate via a Boyu JV, with partner growth offsetting EPS dilution.
- Coffee and tariff pressures are abating, and coffee prices are expected to decline.
- Longer-term margin expansion is expected from supply-chain work and new store cost profile after 2028.
Ideas
Turnaround working; bullish 2028 guidance.
Beyond 2028, Starbucks sees further margin expansion from supply-chain improvements and new coffee houses with a better cost profile. Because new store openings are small relative to the 10,100-store US base, with 150-175 this year and 400 net in 2028, the benefit will take time and show up in the P&L after 2028.
Coffee prices should be coming down.
Management expects coffee price pressure to abate and coffee prices to come down. Starbucks buys inventory ahead, so the benefit will roll through over the next couple of quarters, but the directional view on coffee prices is lower.
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