Profits have plummeted by half, yet the stock is surging toward record highs. What does the market see in Starbucks'…

At first glance, it doesn’t make sense. Starbucks $SBUX reported earnings per share of $1.63 for fiscal year 2025, down 51% from the previous year. The operating margin, which had hovered around 15 percent for many years, fell to 7.9 percent. The company closed hundreds of coffee shops, laid off thousands of employees at its headquarters, and sold control of its Chinese business. And yet, the stock is trading around $104, just about 7 percent below its all-time high from the summer of 2021, and has gained nearly 24 percent since the beginning of 2026, including dividends.

The explanation goes by the name of Brian Niccol. The man who turned Chipotle into a money-making machine was tasked in September 2024 with doing the same for the world’s largest coffee chain. His “Back to Starbucks” plan is currently undergoing its first real test: in the most recent reported quarter, comparable sales grew by 6.2 percent globally—the fastest pace in about two and a half years—and management raised…