5 Straight Quarters of Starbucks Earning Flops… Is Brian Niccol the Deshaun Watson of CEOs?

The NFL Draft just wrapped up, and you know the drill. Your team trades half its future for a “proven veteran.” A former MVP. Maybe even a Pro Bowler with highlight reels and ESPN love letters. And then they show up, cash the check… and play like they’ve never seen a football. That’s where Starbucks is right now.

Last year, they lured Brian Niccol away from Chipotle… the same guy who made Taco Bell cool again and turned Chipotle from a salmonella meme into arguably Wall Street’s favorite fast food stock. This guy’s playbook works. Chipotle’s stock was down 37% after that food safety debacle, and under Niccol, it’s now worth over $80 billion.

So Starbucks said: let’s give him the keys to the coffee kingdom. Big title, big salary, controversial perks, and a fresh chance to clean up a stale brand. And… it’s not going great.

Starbucks just dropped earnings, and I have a feeling the board members are starting to wonder if they’re getting shafted. The stock fell over 6% after the company whiffed on just about everything. Earnings per share came in at $0.41, below the expected $0.49. Revenue was at $8.76 billion vs. the $8.82 billion Wall Street wanted. Even same-store sales in the U.S. are down again… for the fifth straight quarter. Transactions fell 4%, meaning fewer people are even walking into the place, though those still going are paying more… with the average ticket up 3% (so I guess there’s one positive). So… what the hell happened?

Well, Brian’s “Back to Starbucks” turnaround plan is underway. And to be fair, it’s not all nonsense. He’s cutting unnecessary items from the menu, hiring more baristas, speeding up service (shoutout to the new “4 minute or less goal”), and even bringing back actual seats and ceramic mugs. Which, in Starbucks terms, is like Moses parting the Red Sea.

But all of this costs money. Labor costs are up, margins are down… just 6.9%, compared to 12.8% a year ago. Net profit dropped more than 50% to $384 million. And yes, they laid off 1,100 corporate workers and still managed to blow money like prime Sam Bankman Fried. China didn’t save the day either. Even with a slight bump in foot traffic, customers there spent 4% less. Overall same-store sales were flat… not bad, but not great when 19% of your stores are there and your second-biggest market is being smacked around by Trump’s new 145% tariffs.

Niccol says, “We’re not just building back our business… we’re building a better one.” Okay, coach. But right now, investors don’t want inspirational locker room speeches. They want wins. This earnings loss now puts Starbucks stock down 7% this year… and a 2.88% dividend doesn’t make up for that.

Is it all Brian Niccol’s fault? Not exactly. The guy didn’t inherit a well-oiled espresso machine… he walked into a mess that looked more like a frat house after finals week. Starbucks was already dealing with a stalled U.S. business, an increasingly hostile unionization movement (with over 400 stores filing to organize since 2021), and a customer base quietly defecting to Dunkin for their $3 iced coffees that taste almost the same.

But still… when you bring in the guy who turned Taco Bell into a cultural moment and saved Chipotle from E. coli hell, you expect fireworks. Not 5 straight quarters of slumping sales and a Wall Street earnings miss.

So far, it feels more like when the Browns signed Deshaun Watson to that $230 million fully guaranteed deal… and then watched him throw more interceptions than touchdowns.

The talent’s there. The playbook is promising. But for now, Starbucks investors are still waiting for that first big win. Let’s just hope Brian doesn’t need 22 quarters to figure it out.

PS: The headlines are full of panic… inflation’s too high, the Fed’s asleep at the wheel, and Trump never fails to kill any market momentum with more tariffs. On the surface, it looks like the market’s barely breathing.

But underneath all that noise?

We’re seeing some of the fastest stock moves in years… especially in the small-cap space, where low float and high tension can trigger a 100% pop before lunch. Some are up 200% in under 24 hours… and nobody on CNBC is talking about them.

Except us.

Stocks.News Premium members are getting early alerts on these stealth explosions… thanks to our squeeze signal scanner and a real-time insider trading tracker that zeroes in on the money before the momentum hits.

If what you’re doing right now isn’t working… this is your chance to flip the script.

With Premium, you’ll get two trade alerts per week, access to the same tools we use to track CEO buys and Capitol Hill trades, our market sentiment tool… oh and did I mention you’ll get access to premium stock writeup articles?

Go here to become a Stocks.News premium member now.

Stock.News has positions in Starbucks.