Why is Starbucks Corporation stock outperforming the market?

Starbucks Corporation (SBUX) reported fiscal first-quarter earnings that exceeded analyst expectations, with an earnings per share (EPS) of $0.69, surpassing the consensus estimate of $0.67. Total revenues for the quarter were $9.4 billion, slightly above the estimated $9.32 billion, despite a year-over-year decrease of $27 million. The company experienced a 4% decline in global same-store sales, driven by a 6% decrease in transactions, partially offset by a 3% increase in the average ticket. In the U.S., same-store sales fell by 4%, which was better than the expected 5.2% decline. Operating margins met estimates, supported by efficiencies in the supply chain and in-store operations. Under the leadership of new CEO Brian Niccol, Starbucks has launched a turnaround strategy called "Back to Starbucks," which includes simplifying the menu by reducing approximately 30% of items by the end of 2025. The company opened 377 net new stores during the quarter, bringing the total to 40,576 locations, and saw a 1% increase in active loyalty rewards memberships to 34.6 million. Analysts are optimistic about Starbucks' strategic changes, with some raising their price targets for the stock, reflecting confidence in the company's long-term growth potential. However, there is caution from some analysts regarding potential short-term pressures on earnings due to restructuring costs and other headwinds. Overall, the sentiment remains positive, with a focus on the company's potential for a meaningful turnaround in its North American business.