STORY: Shares of Starbucks rose as much as 10% Wednesday morning after the world's largest coffee chain raised its annual forecast.
The move signals that the turnaround plan of CEO Brian Niccol is beginning to work.
Niccol took over in September 2024 and has been trying to revitalize the company with his "Back to Starbucks" strategy.
It has focused on simplifying the menu, reducing wait times, increasing staffing and adding some in-store technology to more efficiently sequence orders.
Niccol said customer traffic increased among all income levels and positive sales trends have continued through April.
Analysts at Stifel said quote, "The recovery is notable for its breadth, indicating the turnaround is structurally sound rather than dependent on a specific group."
Analysts at TD Cowen credited Starbucks' effort to refresh its rewards program with boosting sign-ups including by Gen-Z and Millennial customers.
But while sales rose, its North American operating margins fell, reflecting increased labor investment.
