Starbucks ($SBUX) upset some of its employees when it introduced a new dress code earlier this week. The updated dress code requires the coffee chain’s workers to wear black tops alongside khaki, black, or blue denim bottoms. Previously, tops of any color were allowed, and bottoms could also be grey or brown. These new color choices were made to highlight Starbucks’ iconic green apron.
The Starbucks dress code change went into effect on Monday, but some workers aren’t happy about it. This resulted in hundreds of employees walking out in protest. A union representing workers at hundreds of SBUX locations said more walkouts are planned. It also filed a complaint with the Department of Labor concerning the dress code update.
Employee complaints include financial stress from having to buy new clothes that fit the altered Starbucks dress code. The coffee company said it will provide each employee with two Starbucks branded tops to wear, but that they might not show up in time for the dress code update.
Starbucks Seeks to Regain Its Lost Allure
Starbucks’ updated dress code is part of a larger plan to draw coffee fans back to its stores. The chain has suffered recently, with same-store sales falling during the last five quarters. This has the coffee chain scrambling to win customers back with several policy changes and updates.
Five-star Evercore ISI analyst David Palmer weighed in on the company’s recovery plan yesterday. He said the firm “can envision a multi-year recovery period of roughly 15%+ EPS growth beyond FY26 when considering Starbucks’ brand strength and Brian Niccol’s turnaround history.”
Palmer reiterated a Buy rating for SBUX stock, but lowered his price target from $105 to $95. Even so, that still represents a potential 10.49% upside for the shares.
Is SBUX Stock a Buy, Hold, or Sell?
Turning to Wall Street, the analysts’ consensus rating for Starbucks is Moderate Buy, based on 15 Buy and eight Hold ratings over the last three months. With that comes an average SBUX stock price target of $94.74, representing a possible 9.42% upside.
