SBUX Bets on Refreshers to Boost Afternoon Traffic: Will it Pay Off?

Starbucks Corporation SBUX is increasingly turning to the Refreshers platform to unlock afternoon traffic, a key growth opportunity under its Back to Starbucks strategy. The company’s third-quarter fiscal 2026 results suggest the strategy is gaining traction, although sustaining momentum will depend on continued innovation and execution.

U.S. comparable sales increased 7.9% in third-quarter fiscal 2026, supported by 4.2% transaction growth and 3.6% higher average ticket. While growth was broad-based across dayparts, management acknowledged that morning transactions remain the strongest, leaving significant room to build the afternoon occasion.
Refreshers emerged as an important catalyst. U.S. Refresher revenues grew at a double-digit rate year over year, with customizable Energy Refreshers, Blue Coconut and Mango helping attract customers at different times of day. CFO Cathy Smith highlighted Refreshers as an afternoon beverage occasion, alongside Matcha and new food offerings such as wraps.

Starbucks also sees differentiation through flavor, customization and its beverage craftsmanship. The company plans to test sparkling “Spritzers” and has already introduced blended Refreshers, creating additional avenues for customer engagement.

The opportunity is meaningful, but competition is intensifying as other quick-service restaurants expand their beverage offerings. Still, Starbucks’ improving store execution, stronger afternoon merchandising and expanding menu innovation provide reasons for optimism.

Refreshers Face Growing Competition From BROS and MCD

Starbucks’ push to expand the afternoon daypart comes as competition in cold and customizable beverages intensifies. Dutch Bros Inc. BROS is a particularly relevant rival, with a beverage-focused model built around customizable cold drinks, energy beverages and flavored refreshers. BROS’ strong positioning among younger consumers could make it a formidable competitor as Starbucks seeks to increase afternoon visits. Starbucks itself acknowledged that competitors are becoming more active in the refresher space, making differentiation through flavors, customization and beverage craftsmanship increasingly important.

McDonald’s Corporation MCD also competes for afternoon beverage occasions through its expanding McCafé lineup and cold beverages. Although its core business is broader than Starbucks, the large restaurant footprint and value-oriented positioning give McDonald’s significant reach among consumers seeking convenient drinks and snacks.

For Starbucks, the advantage lies in its established Refreshers platform and continued innovation, including blended and sparkling variants. However, maintaining customer interest will require Starbucks to consistently refresh its offerings while converting beverage experimentation into repeat afternoon traffic.

SBUX’s Price Performance, Valuation & Estimates

Starbucks’ shares have gained 21.2% over the past year, while the industry declined 8.2%.

SBUX’s One-Year Price Performance

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From a valuation standpoint, SBUX trades at a forward price-to-earnings (P/E) multiple of 32.04, above the industry’s average of 21.49.

SBUX’s P/E Ratio (Forward 12-Month) vs. Industry

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The Zacks Consensus Estimate for SBUX’s fiscal 2026 earnings per share (EPS) implies a year-over-year increase of 21.6%. EPS estimates for fiscal 2026 have increased in the past 60 days.

EPS Trend of SBUX Stock

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SBUX’s Zacks Rank

SBUX stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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