Starbucks has severely underperformed the S&P 500 in recent years.
The management team is focused on improving the customer experience in an effort to jumpstart growth.
A successful turnaround might already be priced into the stock.
Starbucks (NASDAQ: SBUX) is a globally recognized brand thanks to its ubiquitous presence. It has 17,230 stores in the U.S. and a jaw-dropping 41,097 in total across the world. But that wide reach hasn't guaranteed financial success in recent years.
The business is in the middle of a major turnaround plan in order to win over customers and boost revenue and profits. For shareholders, it's a desperate hope that things improve for the sake of their portfolios.
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If you invested $10,000 in this coffee stock three years ago, here's how much you'd have today.
Image source: Starbucks.
Had you bought $10,000 worth of Starbucks shares exactly three years ago, you'd have $11,060 today (as of Aug. 21). The total return of 10.6% is extremely disappointing when compared to the total return of 58.2% for the S&P 500. Excluding the dividend, Starbucks' stock price is up just 1.8% in the past three years.
Shares reached their all-time high in July 2021. Since then, though, they have fallen 30%. It doesn't help that the company just reported a same-store sales decline of 2% in Q3 2025 (ended June 29). This was the sixth straight fiscal quarter that a drop was registered. It's hard to find much enthusiasm from investors with that kind of disappointing streak going on.
For what it's worth, Starbucks is still a powerful brand. And it holds a dominant position in the retail coffee market. Additionally, the leadership team appears to be doing all the right things, like simplifying the menu, investing heavily in labor, and aiming to improve the customer experience. Time will tell if these efforts bear fruit.
At a price-to-earnings ratio of 38.2, however, a successful turnaround might already be baked into the valuation.
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Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Starbucks. The Motley Fool has a disclosure policy.