The next big leg of the Starbucks story — and how CEO Brian Niccol plans to get there

Shares of Starbucks jumped 7% on Wednesday after the coffee giant reported a beat-and-raise quarter, which included greater visibility into CEO Brian Niccol's next phase of the turnaround: restoring profits. Investors were pleased with the results, which included several highlights, including Starbucks' first earnings beat in five quarters and only the second beat since the December 2023 result. It was the first quarter of growth on both the top and bottom line in more than two years. But with the ship righted, Niccol acknowledged that investors will increasingly look for profit growth. Speaking on CNBC's "Squawk on the Street," Niccol said investors should begin to see some of the $2 billion in cost savings identified by management flowing through to profit margins in the second half of the year. "The team is crystal clear on who's accountable for what work in order to achieve those cost savings," Niccol said Wednesday. The optimism in Starbucks' margin recovery story is why Starbucks remains "the best non-data center stock" in the portfolio, Jim Cramer said during the Morning Meeting for Club members on Wednesday. He also acknowledged that improving profitability is the key issue investors still need to see; once Starbucks shows consistent margin growth, the stock will go higher. …