Starbucks just made two noteworthy moves to boost its turnaround - but they didn't help the coffee chain's stock

By Bill Peters

Starbucks finalizes terms of a joint venture in China and unveils a new tipping and bonus program

Starbucks operates five Starbucks Reserve Roastery locations globally, including one in New York, shown on March 31. Other Reserve Roastery locations are in Chicago, Milan, Shanghai and Tokyo.

Starbucks on Thursday rolled out a bonus and tipping program for its employees, and announced a deal that hands off a big slice of its store business in China to an investment firm - but those two elements to its turnaround efforts did little for the coffee chain's stock.

And as Starbucks highlights its plans to invest in employees to improve service and win back hesitant consumers, it was unclear whether its unionized employees might get any of the new benefits before reaching a new bargaining agreement.

Shares of Starbucks (SBUX) ended Thursday's after-hours session with a 0.1% gain, after finishing the regular session with a 0.1% loss. The stock has gained 7.3% in 2026, after losing 7.7% in 2025.

The company made the announcements as it tries to improve sales, profits and service, after consumers got turned off by higher prices and stores that some felt were unwelcoming, and gravitated toward smaller coffee rivals in the U.S. and abroad.

Late Thursday, Starbucks said it had closed a joint venture with Boyu Capital - an investment firm with offices in China, Hong Kong and Singapore - under which funds overseen by Boyu now hold a 60% stake in the Starbucks retail business in China.

Starbucks will keep a 40% stake in that business. Starbucks and Boyu first struck the agreement to form the joint venture last year.

The joint venture will oversee around 8,000 company-run stores, with longer-term plans to expand to as many as 20,000. In a statement, Starbucks executives said the move would "deepen local relevance" in China, where coffee isn't as popular as it is in the U.S., and where economic growth has slowed.

From the archives (December 2025): China has been open to Western consumer brands for decades. Those brands still have a lot to learn about Chinese consumers.

Also see (February 2026): Yes, consumers in China are consuming again. It's just not their No. 1 priority these days.

During a Starbucks investor day in January, Brady Brewer, CEO of Starbucks International, said that the average person in China drank only three cups of coffee per year. Starbucks has faced competition from the likes of Luckin Coffee (UK:0A6U) in China. Starbucks same-store sales in China and the broader Asia-Pacific region slid through 2024, before rebounding last year, according to FactSet data.

Starbucks has banked on higher service standards and warmer coffeehouse vibes as part of its effort to recharge sales. However, some analysts have raised questions about the cost of the chain's turnaround efforts, and whether they can win over younger consumers.

Earlier Thursday, Starbucks had said it would begin offering weekly pay to all U.S. workers. It also introduced a new bonus plan that allows baristas and shift supervisors to make up to an extra $1,200 per year - or $300 a quarter - if their store "meets and exceeds certain sales, operational and customer service targets."

The company also said workers would now be able to collect tips through mobile orders and payments, and via a scan-and-pay option at the register. The new incentives, the company said, were part of a plan to reward employee talent.

Whether the company's unionized employees see those benefits remains to be seen. Starbucks said the program announced Thursday "will be subject to collective bargaining as required by federal law" at the roughly 5% of U.S. stores that have unionized.

Starbucks declined to offer additional detail beyond that announcement.

The union, Starbucks Workers United, has been seeking to ensure at least three workers on the coffeeshop floor at all times, a $17-an-hour starting wage for the lowest-paid baristas, and stronger health and safety measures, among other concessions. The labor union and Starbucks have for the past half-decade been engaged in start-and-stop negotiations.

In a statement, the union said it was still in the process of learning about the incentives announced Thursday. But it said some baristas have to rely on SNAP and Medicaid, and often struggle to secure enough working hours to pay rent or qualify for healthcare coverage.

"While we continue to learn more about this announcement, it's clearly a reaction to our organizing and demands for higher take-home pay for baristas," the union said. "It's notable that these bonuses and tips will be largely out of baristas' control, relying on customer tipping and store performance metrics as determined by Starbucks management."

-Bill Peters

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04-03-26 0906ET

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