Starbucks is trying to brew up a turnaround, should you drink it up?

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After starting off 2024 at about $93, Starbucks Corporation’s stock (NASDAQ:SBUX) slid to the $70s by the middle of the year on the company’s declining sales and earnings. Since then, it has been gaining ground amidst hopes for a turnaround strategy the company is pursuing. To aid its turnaround, Starbuckslured away Chipotle Mexican Grill’s chief executive officer Brian Niccol to head up the company last year. The optimism about the potential turnaround, which Starbucks has dubbed “Back to Starbucks,” has caused the stock to move up to about $112 on February 5. This makes for a more than 40,000% return on the company’s split-adjusted initial public offering price of $0.27. (Since going public in June 1992 at $17 per share, the company has rewarded stockholders with six stock splits.)

The company, which opened its first store at Seattle’s Pike Place Market in 1971, pursued a path of major national and international expansion in the past decades, under former CEO Howard Schultz (at the end of December 2024, consumers could enjoy a Starbucks drinks from more than 40,000 stores). Starbucks prides itself on engendering a sense of human connection, as well as its coffee craftsmanship, and is named after the first mate in the classic tale Moby Dick, in a nod to the seafaring tradition of early coffee traders. For good measure, Starbucks also features a siren as its logo.

It seems as the company moved more to mobile sales and drive-through orders, it lost its allure as a “third place” for customers to hang out. The question for investors to consider now is whether Starbucks will manage to brew up higher sales and earnings, giving them higher returns, as it implements its turnaround strategy.