The Real Reason Wall Street Is Skeptical About the New Starbucks CEO
When Brian Niccol took over Starbucks in September 2024, investors practically cheered. The man who fixed Taco Bell and pulled Chipotle back from the brink was now steering the coffee giant. Wall Street bet he could do it again. Yet, one year later, the optimism has become more of skepticism. As you can guess, it’s always about the numbers.
The “Back To Starbucks” Playbook
Image via Wikimedia Commons/Phi Delta Theta
One year into the new administration, the company’s stock is down, customers aren’t flooding back as quickly as hoped, and investors are starting to wonder if even golden boy Niccol can make the turnaround fast enough.
His first move was to launch the “Back to Starbucks” campaign, a blueprint to restore the company’s battered image. It involved slimming down a bloated menu by 30%, tweaking the mobile ordering system to reduce wait times, and reviving the café culture that built the brand. Stores brought back the self-serve condiment bar, added comfortable seating, and encouraged baristas to hit a four-minute drink handoff goal. To sweeten things, free refills on brewed coffee and tea made a return.
On paper, these moves looked promising. Analysts noted small signs of progress, like a modest uptick in store visits tracked by Placer.ai. Even Starb
ucks’ fall tradition, the Pumpkin Spice Latte, helped deliver a record-breaking sales week in September 2025. Even so, Wall Street isn’t a fan of baby steps. It wants to see momentum reflected in the numbers.
The Problem With Patience
Starbucks reported six straight quarters of declining sales between 2024 and 2025. In April, revenue came in at $8.76 billion, and adjusted earnings per share dropped 40% year over year. Global same-store sales fell 1%, weighed down by shrinking traffic. Shares slid another 6% after that earnings release, which pushed the stock about 9% lower for the year. Meanwhile, the S&P 500 climbed nearly 20%.
This gap is what frustrates Wall Street. Niccol insists the foundation is being reset with better systems, cleaner operations, and happier staff, and the payoff will come later. But without clear financial targets, investors are left guessing how long “later” will take.
A Complicated Labor Story
Image via iStockphoto/Teamtime
Niccol also introduced stricter rules for employees, including a standardized dress code and a return-to-office mandate for corporate staff. Although those policies were meant to tighten culture, they triggered walkouts and union pushback.
An August survey of 737 baristas found that 91% reported understaffing issues, which fueled strikes at hundreds of stores. Starbucks promised a $500 million investment in extra labor hours and new assistant managers in each U.S. company-owned store, but Wall Street still wants proof that this spending will lift sales, not just expenses.
The U.S. isn’t Niccol’s only headache. Starbucks’ second-largest market, China, accounts for around 8% of global revenue. Sales there were $790 million last quarter, but competition is fierce. Rivals like Luckin Coffee and Cotti Coffee lure price-sensitive customers with cheaper options and heavy digital perks.
To fight back, Starbucks launched discounts, sugar-free coffee, and more iced drinks to keep up with local tastes. Niccol is also exploring selling part of the China stake to local operators, which could add capital and expand supply chain support. Still, growth remains modest, with same-store sales up just 2% year over year.
Analysts Aren’t Writing Him Off
Despite the skepticism, Niccol isn’t failing by any means. Branding consultants and analysts who graded his first year gave him an average of a “B.” Many argue he inherited a giant, complex ship that takes time to turn.
At Taco Bell and Chipotle, his results didn’t come overnight either. The difference is that Starbucks investors, used to steady global growth, are less willing to wait. As one strategist put it: Starbucks needs to win back its own employees before it can win back customers. And until that happens, Wall Street isn’t fully convinced that Niccol’s turnaround has teeth.