Jim Cramer says Starbucks can carry out turnaround

CNBC’s Jim Cramer on Wednesday expressed faith in Starbucks CEO Brian Niccol’s ability to execute a turnaround, even though the coffee chain’s quarter missed expectations and failed to impress Wall Street.

“This is a case where you simply have to bet on the jockey and remember that he can turn the horse around and make it a winner,” he said.

Starbucks reported weaker-than-expected earnings and revenue, posting another quarter of same-store sales declines. Shares dipped during Wednesday’s session, finishing down 5.66%. Niccol admitted the results were “disappointing” on the earnings call, but he claimed that “behind the scenes, we really are showing a lot of signs of progress.”

Cramer was incredulous that some on Wall Street would turn away from the company only six months into Niccol’s term as CEO, pointing to his strong track record at Chipotle. Before taking the reigns at Starbucks, Niccol served as CEO of the burrito maker and oversaw a major turnaround for the company as it reeled from food safety scandals.

Starbucks still has issues, Cramer conceded, but he was encouraged by certain aspects of the quarter as well as Niccol’s own comments to CNBC. Cramer mentioned the company’s pilot programs purported to improve throughput, one of the its more pressing issues, he added. He was also impressed by Starbucks’ international business, including its China market, which saw flat same-store sales after consecutive quarters of decline.

Cramer also touched on the fraught macroeconomic environment that has stung many outfits during this earnings season. But he emphasized that some CEOs are able to guide companies forward despite these broader concerns.

“We know this is a tough moment, right. We have tariffs that are putting the wood to profitability. We have a world where commerce seems to be grinding to a halt. We have inflation,” he said. “But some companies can keep delivering in spite of this environment.”

Starbucks did not immediately respond to request for comment.

Sign up now for the CNBC Investing Club to follow Jim Cramer’s every move in the market.

Disclaimer The CNBC Investing Club holds shares of Starbucks.