TLDR
- Starbucks reveals aggressive expansion with over 2,000 new global stores planned for Fiscal 2028
- Company targets 400 U.S. company-operated stores by 2028, with room for 5,000 more in future years
- Innovative “Ristretto” store format slashes building expenses by around 20%
- China market could see 15,000 to 20,000 new locations added to existing 8,000 stores
- TD Cowen increases price target to $89, citing improved 2028 earnings visibility
Starbucks just announced its most ambitious growth strategy in recent memory. The coffee retailer plans to open more than 2,000 stores worldwide during Fiscal 2028.
This represents a threefold increase compared to openings anticipated this year. CFO Cathy Smith outlined the roadmap at an investor event after the company posted mixed quarterly results.
The aggressive push follows last year’s store closures. Starbucks is clearly ready to expand again after trimming underperforming locations.
Domestic growth centers on 400 new company-run stores by 2028. Leadership sees potential for an additional 5,000 U.S. stores beyond that timeframe.
Geographic focus targets central, southern, and northeastern states. Competition from drive-through operators like 7 Brew and Dutch Bros has intensified in these markets.
Innovative Designs Drive Down Costs
Starbucks is reimagining the store experience. Next-generation locations will serve multiple customer channels simultaneously including drive-through, mobile pickup, delivery, and walk-in service.
Dense city centers will receive compact cafe-style stores. The “Ristretto” format packs full coffee bars and seating into smaller footprints.
These streamlined designs cut construction expenses by approximately 20%. When multiplied across thousands of planned stores, the savings become meaningful.
China Takes Priority in Overseas Growth
The international footprint currently stands at nearly 23,000 stores. Executives project that number could eventually reach 40,000.
China dominates expansion plans. Starbucks operates 8,000 Chinese stores today. The company wants to add another 15,000 to 20,000 locations there.
A recent deal transferred majority ownership of China operations to Boyu Capital. This shifts most international stores toward franchise partnerships.
Post-transaction, about 90% of overseas stores will operate under licensing agreements. That compares to 55% currently running this way.
The franchise model enables rapid scaling without heavy capital investment. Partners handle daily operations while Starbucks collects fees and maintains brand standards.
Wall Street Reacts to Growth Blueprint
TD Cowen’s Andrew Charles lifted his price target to $89 from $84. He maintained a Hold stance on the shares.
Charles characterized the stock as momentum-driven given clearer 2028 earnings projections. Shares currently trade at a premium 32-times forward earnings.
He anticipates further valuation expansion if North America comparable sales growth exceeds the 4% first-quarter rate.
Analyst consensus leans toward Moderate Buy. This breaks down to 13 Buy ratings, seven Hold ratings, and two Sell ratings. The average Wall Street price target stands at $98.22, implying modest upside from present trading levels.
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