Starbucks (SBUX) shares surged 5.15% in after-hours trading on Tuesday following the company's fiscal third-quarter earnings report, which revealed mixed results but showed signs of progress in key areas. The coffee giant's revenue beat Wall Street expectations, while its turnaround efforts appeared to be gaining traction.

The company reported revenue of $9.46 billion, surpassing analyst estimates of $9.31 billion. However, adjusted earnings per share came in at $0.50, falling short of the expected $0.65. Despite the earnings miss, investors seemed to focus on positive developments in Starbucks' business.

CEO Brian Niccol expressed optimism about the company's turnaround strategy, stating that efforts were "ahead of schedule." This sentiment likely contributed to the stock's after-hours rally. Niccol emphasized the company's commitment to investing in labor and store operations, signaling a focus on improving the customer experience and operational efficiency.

A bright spot in the report was Starbucks' performance in China, where comparable store sales increased by 2%. This growth in a key international market provided encouragement for investors, especially given recent challenges in the region. The company also noted plans to invest "over half a billion dollars" into additional work hours for its U.S. company-run stores next year, highlighting its commitment to enhancing service quality.

While global comparable store sales declined 2%, with North America seeing a similar drop, the market appeared to look past these near-term challenges. Instead, investors seemed to be betting on the long-term potential of Starbucks' turnaround initiatives and its ability to navigate a competitive landscape.