Starbucks reported its strongest quarterly sales growth in two and a half years, with same-store sales increasing by 6.2% and topping analyst expectations. Following these results, the company's shares rose 5% on Wednesday as Starbucks raised its annual forecast, signaling that CEO Brian Niccol's turnaround plan is beginning to take hold.
The chief executive credited the turnaround plan for the improved U.S. same-store sales. The coffee chain is winning over American diners by implementing speedier service, more appetizing pastry displays, and cushier seats.
However, questions remain regarding how quickly profit margins can recover as costs rise faster under the turnaround strategy. CEO Brian Niccol noted that higher gas and utility costs are a concern. While sales are moving in the right direction, investors now want to see profits follow suit.