Starbucks stock surged past $107 after the company posted impressive quarterly results that beat Wall Street expectations. Adjusted earnings came in at $0.85 per share, marking a 70% increase year over year.
Revenue held steady at $9.3 billion, with global comparable-store sales climbing 7.9%, the fourth quarter in a row of solid growth. Operating margins expanded by 430 basis points to 14.4%, including margin gains in North America for the first time since early fiscal 2024.
The strong numbers lifted shares to near their highest close in over a year, putting the company up about 26% since the start of 2025. CEO Brian Niccol's strategy of store remodels and simplifying international operations seems to be paying off, with 1,500 locations set for upgrades by year-end and a focus on licensing for nearly 90% of overseas stores.
CNBC's Jim Cramer spoke with Niccol and called this quarter a key turning point. He increased his price target on Starbucks stock to $120, up from $115. Cramer credits the cost-cutting measures, including layoffs, and the focus on core markets like the US and Canada as factors driving renewed investor confidence.
The question now is whether North American margin improvements will sustain once tariff refunds expire. If they do, the stock could continue its climb. This positive outlook contrasts with Cramer's more cautious stance on other momentum stocks this week.
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