Starbucks stock price soared 8%, a new CFO is about to take office, and the performance in China still lags behind Luckin Coffee's efforts to break through.

Starbucks (Starbucks NASDAQ symbol: SBUX) has performed well since the beginning of the year, with a overall increase of 8%, immediately after turning losses into profits, poached Nordstrom's CFO Cathy Smith to replace current CFO Rachel Ruggeri. Starbucks did not disclose the reason for the current CFO's departure, but the company will provide Severance Benefits (Severance Benefits) and stated that she will assist in handing over responsibilities to Cathy Smith. Rachel Ruggeri joined Starbucks' accounting team in 2001 and has held multiple senior positions. The replacement of senior executives at Starbucks shows a determination to reform.

Despite Starbucks' recent decline in performance, investors and analysts remain bullish on Starbucks stock, with analysts giving it a moderate buy rating.

Starbucks strives to turn losses into profits

Starbucks is working hard to curb the continuous decline in quarterly sales and hopes that customers' experience of buying coffee in stores will be more enjoyable. Last August, Starbucks poached Chipotle Mexican Grill's former CEO Brian Niccol to be Starbucks' next CEO. In his first few months in office, Niccol made a series of changes, including canceling coffee discounts and significant layoffs. Starbucks announced last month that it will fire 1,100 employees and streamline its operations.

Niccol also took some small measures to simplify the process of making coffee, such as restoring the self-service condiment bar to address customers who complain that the baristas did not add milk and sugar correctly.

Starbucks' U.S. and global store sales declined by 4% compared to the same period last year, marking the fourth consecutive decline. The recent appointment of a new CFO represents the company's biggest recent change, with newly appointed CEO Niccol initiating a series of personnel changes. In January, he hired two former executives from Taco Bell, Mike Grams and Meredith Sandland, to serve as Chief Stores Officer for North America and Chief Stores Development Officer, respectively.

Brian Niccol is also the fourth CEO to be replaced in the past five years at Starbucks. The challenges he faces include inflation, rising raw material prices, changes in consumer tastes and eating habits, geopolitical economy, increased rent and personnel costs, and other multiple obstacles.

Luckin Coffee's geographical advantage inhibits Starbucks' growth

Starbucks used to expand smoothly in China, until Luckin (Rui Xing Coffee) rose, causing Starbucks to lose a large number of customers. As of last year, Starbucks had 7,685 stores in China, while Luckin had 13,396 stores. Experts analyze that Luckin's rapid growth in China is mainly due to its localization. They seek to open stores by authorizing partners to share profits. In contrast, Starbucks still maintains a globally consistent style with its American direct-operated store model. Although the coffee flavors have been adjusted, consumers still feel that Starbucks is too expensive. While the number of Starbucks customers has increased, the average consumption amount has not grown.

Wall Street analysts are bullish on Starbucks stock

On January 29 this year, Starbucks released its Q1 financial report, announcing a net revenue of 9.4 billion US dollars and also reporting the opening of 77 new stores in the first quarter. In addition, earnings per share were $0.69, 4.6% higher than Wall Street's expectations.

Wall Street analysts remain optimistic about Starbucks' prospects, with 31 analysts rating it as 'moderate buy,' currently trading above the average target of $107.34.

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