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Starbucks' Turnaround Paradox: Traffic Is Up, But 420 Basis Points of Margin Just Vanished

Brian Niccol's Back to Starbucks plan is driving traffic for the first time in two years. But North America operating margins contracted 420 basis points in Q1 FY2026, RBC Capital and Wolfe Research both downgraded the stock in one week, and the CFO admits two-thirds of the damage is labor spending with no clear end date. For restaurant operators everywhere, Starbucks is now the industry's most expensive case study in what turnarounds actually cost.

Finance & EconomicsMar 25, 202638 views