Should Starbucks’ (SBUX) $1 Billion Restructuring and Store Closures Change Investor Perspectives?

• On September 26, 2025, Starbucks announced a US$1 billion restructuring plan to close around 1% of its North American stores and reduce approximately 900 corporate roles, with a modest quarterly dividend increase to US$0.62 per share set for payout in late November.
• This sweeping initiative under CEO Brian Niccol's leadership aims to redirect resources toward core locations, address declining sales, and respond to ongoing labor tensions while maintaining a commitment to shareholder returns.
• We’ll now examine how Starbucks’ decision to close underperforming stores and cut corporate roles may alter its investment narrative.

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Starbucks Investment Narrative Recap

To own Starbucks stock, I need to believe that its turnaround plan, centered on the "Back to Starbucks" strategy, will successfully restore growth, keep customers coming in, and boost operating margins despite near-term headwinds. The recent US$1 billion restructuring, involving the closure of about 1% of North American stores and 900 corporate layoffs, squarely addresses the core catalyst of operational efficiency, though it does not eliminate the immediate risk of execution delays or further margin pressure for now.

Among recent developments, the modest quarterly dividend increase to US$0.62 per share stands out. While small, this move signals an intention to maintain shareholder returns during the restructuring and could temper some concerns around near-term disruptions as Starbucks invests in renovating core stores and refocusing its footprint.

But on the flip side, investors should be aware that ongoing execution challenges and significant labor tensions may cause the benefits of this strategy to take longer to materialize, particularly if...

Read the full narrative on Starbucks (it's free!)

Starbucks' outlook anticipates $45.5 billion in revenue and $4.6 billion in earnings by 2028. This is based on a projected annual revenue growth rate of 7.5% and a $2.0 billion increase in earnings from the current $2.6 billion level.

Uncover how Starbucks' forecasts yield a $99.38 fair value, a 15% upside to its current price.

Exploring Other Perspectives

Twenty-three fair value estimates from the Simply Wall St Community for Starbucks range from US$50.17 to US$110 per share. While these views vary widely, the company's current focus on executing its turnaround plan could be pivotal for future performance, so consider all sides before forming an opinion.

Explore 23 other fair value estimates on Starbucks - why the stock might be worth 42% less than the current price!

Build Your Own Starbucks Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Starbucks research is our analysis highlighting 1 key reward and 4 important warning signs that could impact your investment decision.
• Our free Starbucks research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Starbucks' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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