Starbucks is seeking to return to pre-pandemic margins, executives said at the company’s investor day held Thursday, targeting net revenues up 5% or more and annual earnings per share of $3.35 to $4 by fiscal year 2028.
The investor day, held in New York City, is the company’s first since CEO Brian Niccol’s hiring in September 2024, when he suspended financial guidance as he undertook a turnaround campaign.
On Wednesday, Niccol said the plan was “ahead of schedule,” after it reported US sales growth for the first time in two years.
Starbucks’ shares fell about 2% on Thursday after the much-awaited long-term targets were announced. Lauren Silberman, an analyst with Deutsche Bank, said the range in the guidance was “too wide,” during the event’s questions portion.
Starbucks operating margin was 15.4% in 2019, but fell during the pandemic, and later from Niccol’s hefty investments in labor, to 7.9% in 2025, according to Starbucks annual filings.
Starbucks seeks, by fiscal year 2028, to have an operating margin of 13.5-15%.
Chief Financial Officer Cathy Smith said Starbucks will seek to achieve its 2028 margin target through cost savings, such as reducing the cost of store remodels, and to a lesser extent, targeted menu price increases.
Executives also said the structure of its anticipated licensing of its China stores, in partnership with Boyu Capital, will deliver higher margins to the company.
Starbucks’ international division head Brady Brewer said the international operating margin could exceed 20% by 2028.
Starbucks expects to add more than 2,000 net new stores internationally by 2028 — outpacing 400 net new US stores the company expects to open. “The world wants more Starbucks,” Brewer said.
Executives also announced a revamp of its rewards program, re-introducing a tiered structure. Chief brand officer Tressie Lieberman said that if half of Starbucks’ loyalty program members buy from Starbucks one additional time in a year, it would add $150 million in annual revenue.
Executives said the company will also improve its supply chain, including with AI initiatives, and that the company wants 90% of its company-owned coffeehouses to be resupplied on a daily basis by the end of 2026.
Starbucks has long struggled with product shortages from deep-seated supply chain kinks, Reuters reported Tuesday.
Niccol said the company had made progress in reducing out-of-stocks in the previous six months, without offering specific numbers.
“For most of our history, Starbucks delivered exceptional investor returns. We are determined to bring exceptional value again,” Smith said.
