Jim Cramer expressed strong confidence in Starbucks’ turnaround during a recent Mad Money segment, citing impressive Q1 fiscal 2026 results driven by operational improvements under CEO Brian Niccol. He emphasized transaction growth, faster service times, and sustained momentum, stating that the positive shift is durable. While noting his Charitable Trust’s significant existing position prevents further buying, Cramer suggested the current share price offers value for new investors, describing the transformation as solid and long-lasting.
Jim Cramer’s Bullish Take on Starbucks’ Durable Turnaround
Jim Cramer, host of CNBC’s Mad Money, recently spotlighted Starbucks Corporation (NASDAQ: SBUX) as a compelling example of a successful corporate turnaround. In his analysis, Cramer focused on the tangible progress achieved since Brian Niccol assumed the CEO role in August 2024, drawing from the company’s latest quarterly earnings and operational metrics. He described Niccol’s approach as a return to fundamentals—prioritizing consistent, timely service without unnecessary flair, which has begun to yield meaningful results in customer traffic and sales.
Cramer highlighted Niccol’s initial priority: delivering a cup of coffee in four minutes or less. This operational focus has translated into broader improvements, including increased staffing, reduced employee turnover, and enhanced customer service standards. These changes have helped Starbucks regain its edge in handling morning traffic, a critical daypart for the chain. Cramer noted that the company achieved growth in both Rewards transactions and non-Rewards transactions simultaneously—a milestone not seen since the second quarter of fiscal 2022. This dual growth underscores a shift from price-driven gains to volume-driven momentum, which he views as healthier for long-term sustainability.
The latest quarterly performance reinforced Cramer’s optimism. Starbucks reported consolidated net revenues of $9.9 billion for the first quarter of fiscal 2026 (ended December 28, 2025), marking a 6% increase year-over-year (5% on a constant currency basis). Comparable store sales grew 4% globally, driven by 3% transaction growth and 1% average ticket growth. In the U.S., comparable sales also rose 4%, with transaction growth turning positive for the first time in eight quarters. International markets showed even stronger results, with 5% comparable sales growth, while China delivered 7% growth on 5% transaction gains.
Key operational highlights from the quarter include:
Active Starbucks Rewards members reached 35.5 million.
Rewards transactions grew for the first time in eight quarters.
Global transaction volume increased 3%, with similar gains in the U.S. and International segments.
The company opened a net of 128 new stores, bringing the global total to 41,118 locations.
Cramer acknowledged the stock’s volatility following the earnings release, noting an initial surge on the upside surprise in same-store sales that gave way to profit-taking later in the session. He attributed this pullback to the shares having run up significantly ahead of the report but maintained that the underlying developments represent a “huge positive.” He believes these fundamentals position the company for sustained improvement.
At the recent Investor Day, Niccol reiterated confidence in the “Back to Starbucks” strategy, which refocuses on core elements of coffee, craft, and community connection. He described the plan as ahead of schedule, with early momentum from operational enhancements, menu simplification, digital tool investments, and strengthened staffing. Executives outlined a framework for long-term growth, emphasizing discipline in execution, partner investments, exceptional customer experiences, brand strengthening, and expanded global presence.
Looking forward, Starbucks provided fiscal 2026 guidance that aligns with its turnaround trajectory:
Global and U.S. comparable store sales growth of 3% or higher.
Consolidated net revenues growing at a rate similar to comparable store sales.
Slight year-over-year improvement in non-GAAP operating margin.
Non-GAAP EPS in the range of $2.15 to $2.40.
Net new store openings of 600 to 650 globally.
As of the most recent close on January 30, 2026, SBUX traded at $91.95, down from a previous close of $93.88, with a day’s range of $91.01 to $93.20. The shares sit well below the 52-week high of $117.46 but remain above the low of $75.50, reflecting both recovery from prior pressures and recent pullback. Market capitalization stands at approximately $104.76 billion, with a trailing twelve-month PE ratio of 77.92 and EPS of $1.18.
Analyst sentiment has grown more constructive following the earnings and Investor Day. Recent updates include:
BMO Capital raising its price target to $120.
Barclays lifting its target to $116.
Piper Sandler increasing to $103.
BTIG maintaining Buy at $105.
The average one-year price target sits around $99, suggesting potential upside from current levels.
Cramer concluded his remarks by noting that while his Charitable Trust maintains a substantial holding in Starbucks and will not add more shares at present, the turnaround story remains compelling. For investors without exposure, he sees the current valuation as attractive, given the operational progress and long-term potential. He views the changes implemented by Niccol—centered on execution, service reliability, and traffic recovery—as creating a foundation for enduring performance rather than a short-lived rebound.
Disclaimer: This article is provided for informational purposes only and does not constitute investment advice, a recommendation to buy or sell securities, or a solicitation of any kind. Stock markets are volatile, and past performance is no guarantee of future results. Investors should perform their own due diligence and consult qualified financial professionals before making any investment decisions.