Starbucks (SBUX 0.43%) dominates the retail coffee industry, with its massive store base and global presence. Since its initial public offering in 1992, the business has usually been a wildly successful investment. But this hasn't been the case recently, with shares generating a negative 8% total return in the past three years.

Adding Starbucks to your portfolio might be something you're considering. Here are three facts about this top restaurant stock that investors must know before buying.

1. Declining revenue trends

Anyone following this company knows that Starbucks has hit a rough patch. The business has reported three straight quarters of declining year-over-year revenue. This has been driven by falling same-store sales (comps), with the most recent period -- the 2024 fourth quarter, ended Sept. 29 -- showing a 7% dip on a worldwide basis.

What's particularly alarming is that Starbucks is seeing softer foot traffic at its stores. It dropped 10% in the U.S. in the fourth quarter. And in China, which has typically been the company's key growth market, traffic was down 6%. These aren't encouraging trends.

Brian Niccol, formerly the CEO at Chipotle Mexican Grill, was brought in to help remedy the situation. Niccol's priorities include simplifying the menu and boosting service speed. Given his track record of success at the Tex-Mex fast casual chain -- particularly following its health scare of several years ago -- there might be no better person to orchestrate a successful turnaround at Starbucks.

2. A durable competitive edge

Despite its challenges, Starbucks has a durable competitive advantage that supports its economic moat. In this instance, the company's brand strength has historically been key to its success. And it's precisely what helps the business resonate with consumers across the globe.

The chain has long positioned itself as a premium brand, allowing it to sell what are otherwise commoditized drinks and food at high prices. In the past decade, the company's gross margin has averaged 28.2%, which shows the profitability of these items.

A valid argument can be made that the brand has weakened in the past couple of years. This is evident when looking at the falling comps I've outlined above. But if you zoom out, you'll see that comps have steadily climbed over the years. Moreover, the fact that the company has successfully entered new markets, replicating its playbook in the U.S., proves its brand is still valuable.

That strength and relevance over such a long period gives me confidence that Starbucks will still be leading the retail coffee industry decades from now.

3. Expanding the store base

As of Sept. 29, Starbucks had 40,199 stores scattered across the world, up 29% compared to just five years ago. During the announcement of a strategic plan in November 2023, executives set an explicit target of reaching 55,000 locations globally by 2030. That would seriously drive greater revenue and earnings growth.

Given the leadership change, coupled with the ongoing struggles, rapidly growing the store base isn't management's top priority at this moment. "We plan to reduce the number of our new stores and renovations in fiscal year 2025," chief financial officer Rachel Ruggeri said on the fourth-quarter 2024 earnings call.

However, I believe that previous target of 55,000 is still in play once the business' operations stabilize and Starbucks can start focusing on playing offense once again. This means there is still meaningful potential to expand both in the U.S. and abroad, particularly in China.

The chance for higher sales and profits down the road can be a winning combination for patient investors who are looking to add this stock to their portfolios.