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Starbucks Turnaround Strategy Delivering Results, Tigress Financial Says

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Starbucks' (SBUX) turnaround efforts are delivering tangible results, as comparable sales turned positive for the first time in eight quarters in the company's fiscal first quarter, Tigress Financial Partners said Wednesday.

The coffee giant launched its "Back to Starbucks" strategy in September 2024 to reignite traffic growth and unlock long-term margin expansion.

The first quarter offered early evidence that the strategy is working, Tigress said in a note to clients Wednesday. In January, the company reported that revenue for the three months through December rose 5.5% year over year to $9.92 billion, surpassing the FactSet-polled consensus at the time. Global comparable store sales grew 4%.

"(The first quarter) marked a definitive inflection point, delivering the first US transaction growth in two years and the first positive comparable sales in eight quarters," Tigress Director of Research Ivan Feinseth said.

The brokerage resumed coverage of the Starbucks stock with a buy rating and a $122 price target, saying bullish drivers include a new joint venture in China and its artificial intelligence-driven "Deep Brew" predictive inventory management platform.

"(Starbucks') turnaround execution, capital-efficient licensed model, historically supported multiples, and clear growth catalysts in store expansion and emerging markets will drive a reacceleration of business performance trends," Feinseth said.

The company is scheduled to report second-quarter results April 28.

Price: $98.83, Change: $+0.36, Percent Change: +0.37%

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