Starbucks customer demand hit record highs in its fiscal third quarter as the 50-plus-year-old company is gearing up for a major "reinvention."
"Demand really hasn't been an issue," Jefferies Managing Director Andy Barish emphasized on Yahoo Finance Live (video above). Instead, it's the labor portion of the business, the people that fulfill that demand, that will be in focus in the fiscal fourth quarter.
Barish explained that Starbucks is "focusing internally and spending a fair amount of money" on partners, which Starbucks calls employees.
In May, Starbucks interim CEO Howard Schultz announced a $1 billion investment in its U.S. partners and stores for the 2022 fiscal year.
That announcement included an update to the company's plan to increase wages for all U.S. hourly earners from $12 an hour to at least $15 per hour, which went into effect on August 1. Currently, the average wage for Starbucks workers is $17 an hour.
That new minimum wage could change again, according to Barish, who has a buy rating on the stock and a price target of $100.
"It's is being raised, obviously, by some of the headlines around unionization and things like that," Barish said. He added that the investment in people is "not a new thing" for the brand and that Starbucks remains a leader in the industry.
In a call with analysts Tuesday, Frank Britt, who recently stepped into the role of Starbucks Chief Strategy Officer, highlighted the top "five major strategic shifts" in the company's reinvention plan. They include ongoing partner co-creation, "fully embracing the need to radically improve our in-store partner experience," reimagining stores, evolving customer re-connection, and redesigning "what partnership means at Starbucks."
More is expected to be revealed at the coffee chain's Investor Day, which is set to take place Tuesday, September 13 in Seattle, Washington.
"This move and a lot of the other things that Starbucks has done over many, many decades as being one of the most, if not the most, progressive employers in the restaurant industry, I think points to what will be a step up here but then kind of a leveling out of reinvestment in their partners," Barish stated.
Brooke DiPalma is a producer and reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at email@example.com.