Starbucks’ new Superstar CEO just launched his plan to fix the business. Here’s what investors need to know.

On August 13, the coffee giant Starbucks (SBUX -0.71%) shocked the investing world when it named Brian Niccol as its new CEO. Niccol was former CEO at Chipotle Mexican Grill. And to lure him, Starbucks was willing to break the bank for sure. His total pay package is reportedly worth over $110 million.

With one of the biggest pay packages on Wall Street, Niccol is now a superstar CEO. But Starbucks didn’t bring it in to maintain the status quo. On the contrary, the company is desperate to turn things around.

On September 10, Niccol laid out a 100-day plan to start fixing things at Starbucks. And it all starts with its US business

What’s the problem with Starbucks?

Niccol just wrote an open letter to all Starbucks stakeholders and didn’t mince words. He said that in the chain’s US cafes, “It can feel transactional, the menus can be overwhelming, the product inconsistent, the wait too long or the transfer too hectic.”

These observations — especially the final one — are not necessarily new. In the second quarter of 2024, then-CEO Laxman Narasimhan said that some of Starbucks’ most loyal customers “sometimes chose not to complete their order, citing long product wait times and availability.”

Former Starbucks CEO Howard Schultz echoed Niccol’s thoughts in a social media post earlier this year. Schultz specifically used the term “transactional” to describe a feeling that should be avoided, as Niccol did in his open letter. But Schultz would also agree with Niccol’s plan to start with the US side of the business, as he said “the US operations are the main reason for the company’s fall from grace”.

In Starbucks’ North American segment (most of which is the US), transactions have declined over the past two quarters. This happens from time to time with a restaurant business. But in this case, the company believes the decline could have been avoided just by addressing things within its control. And that is why it is imperative to turn things around.

So what’s the plan now?

If this seems like a small problem for Starbucks, I think it’s fair to say that it is. The company ended its third fiscal quarter in June. In the first three quarters of fiscal 2024, it generated more than $20 billion in revenue in North America, up 3% from the same three quarters in fiscal 2023.

Also, in the first three quarters of fiscal 2024, North America had operating income of more than $4.1 billion, up 5%.

In short, North America is still a huge and growing business for Starbucks, and it’s profitable. The company is not facing total disaster. But the problems he has are of his own making, which is why it’s imperative that you fix things.

For Niccol, part of the plan for Starbucks is perfecting the morning experience, which is crucial. After all, management says about half of its sales occur during the morning hours. And starting someone’s day off with a bad coffee experience is an easy way to lose a customer’s loyalty.

Niccol also wants to invest in the company’s barista. He wants to get customers interested in dining in his cafes again, rather than just doing takeout. And he wants customers to connect better with the brand. But this all sounds like the suggestions Schultz made earlier this year.

This is why I think Starbucks shareholders should have hope for the future. While Starbucks stock has been one of the greatest investments of the last 30 years, the company has struggled each time Schultz has stepped down. He seems to have a firm grasp of what makes Starbucks great that others don’t. Niccol’s plan sounds a lot like something Schultz would come up with. And so I think the outlook for Starbucks without Schultz at the helm is finally looking up.

To be clear, Niccol’s plan only addresses the next three months in the US; there are issues elsewhere in the business that need to be resolved eventually, especially in China. In short, there is still a lot of work to do. But I think Starbucks quickly got back on track under Niccol, which is something to be excited about.