Starbucks reported stronger-than-expected fourth-quarter earnings and comparable-store sales growth, although revenue fell slightly short of Wall Street forecasts. The results suggest the coffee giant’s turnaround strategy is gaining traction as the company prepares to accelerate growth in fiscal 2027.
The Seattle-based coffee chain reported improving customer traffic and higher spending in its U.S. stores, helping offset weaker international performance and the financial impact of changes to its China operations.
Starbucks Q4 Earnings Beat Wall Street Expectations
Starbucks reported adjusted earnings of $0.80 per share for the fourth quarter, exceeding analysts’ expectations of $0.71 per share.
Quarterly revenue reached $9.1 billion, slightly below Wall Street’s forecast of $9.2 billion. The revenue shortfall reflected the sale of Starbucks’ China business.
Despite the revenue miss, the company delivered stronger-than-expected comparable-store sales growth for the fifth consecutive quarter.
Global same-store sales increased 7.2%, surpassing analysts’ projections of 6.2%.
U.S. Sales Growth Drives Quarterly Performance
The United States remained a major contributor to Starbucks’ quarterly performance, with domestic comparable-store sales increasing 7.7%.
The improvement was supported by approximately 5% growth in average customer spending and a roughly 2% increase in transactions.
Customers spent more on seasonal beverages and merchandise, contributing to stronger sales during the company’s fall promotional period.
Starbucks also reported its strongest fall beverage launch day to date, highlighting continued consumer interest in its seasonal offerings.
The results indicate that the company is benefiting from both higher spending per visit and an increase in customer traffic.
CEO Brian Niccol Says Starbucks Turnaround Strategy Is Delivering Results
Starbucks CEO Brian Niccol expressed confidence in the company’s recovery efforts, emphasizing improvements in operational consistency, store performance and customer engagement.
“We have a clear plan. We’ve been working the plan. And the plan is working,” Niccol said in prepared remarks.
The CEO said Starbucks is operating with greater consistency, maintaining a healthier store portfolio and attracting more customers.
The company’s turnaround strategy has focused on strengthening its core coffeehouse experience while improving operational efficiency and positioning the business for sustainable growth.
Starbucks Plans Thousands of Additional North American Stores
During the earnings call, Niccol outlined the company’s long-term expansion opportunities across North America.
He said Starbucks sees “significant long-term white space in North America … to build around 5,000 additional coffee houses over time.”
The expansion outlook follows Starbucks’ September announcement that it would close approximately 250 locations across the United States and Canada.
Those closures were expected to reduce the company’s North American store count by roughly 1%.
The combination of store closures and longer-term expansion plans reflects Starbucks’ efforts to improve its existing portfolio while identifying opportunities for future development.
International Starbucks Sales Fall Short of Forecasts
While North American operations delivered stronger results, Starbucks’ international business experienced more modest growth.
International comparable-store sales increased 0.9%, below analysts’ expectations of approximately 3%.
The international segment, including major markets such as the United Kingdom and Japan, faced pressure from declining customer transactions.
Transactions decreased by approximately 3%, offsetting a 4% increase in average spending per customer.
The figures suggest that higher spending helped support international revenue, although customer traffic remained a challenge.
Starbucks Fiscal 2026 Results Show Improving Profitability
Starbucks’ full-year financial results reflected a similar pattern, with earnings and comparable-store sales outperforming expectations despite a modest revenue shortfall.
For fiscal 2026, the company reported revenue of $37.9 billion, representing a 2% increase from the previous year.
The figure was slightly below Wall Street’s estimate of $38 billion.
Adjusted earnings increased 28% year over year to $2.72 per share, exceeding analysts’ forecast of $2.62.
Global same-store sales rose 6.2% for the fiscal year, ahead of the expected 6% increase.
North American operations remained the primary driver of comparable-store sales growth.
“We enter fiscal 2027 with momentum, a clear set of priorities and higher ambitions for what Starbucks can become,” Niccol said.
Starbucks Targets Continued Sales Growth in Fiscal 2027
Starbucks executives expect further improvement in the company’s North American business during fiscal 2027.
Chief Financial Officer Cathy Smith said the company anticipates approximately 4% comparable-store sales growth across North America.
Smith also addressed the company’s pricing strategy as consumers continue to face inflation-related pressures.
“Any pricing will remain focused and well below CPI,” Smith said, referring to the Consumer Price Index.
The report cited an annual consumer inflation rate of 3.7%.
The company’s pricing approach suggests Starbucks intends to balance profitability with customer affordability while supporting continued sales growth.
Starbucks Stock Slips Despite Stronger Earnings
Starbucks shares edged lower in premarket trading Friday despite the company’s earnings beat and stronger-than-expected comparable-store sales.
The stock was trading near $105.01, down approximately 0.47%, during early regular trading.
Investors appeared to weigh the company’s improving operating performance against its revenue shortfall and slower international sales growth.
Outlook: Starbucks Shifts Focus Toward Long-Term Growth
Starbucks enters fiscal 2027 with stronger domestic sales momentum, improving profitability and plans for additional North American expansion.
Although international customer traffic and revenue performance remain areas of concern, the company’s latest results provide evidence that its turnaround initiatives are producing measurable improvements.
Continued growth in customer visits, disciplined pricing and effective store expansion will be important factors in determining whether Starbucks can sustain its recovery over the coming year.
Charles Dickens is a contributor to Highlands Today, covering news, politics, business, technology, sport, entertainment, and lifestyle. He focuses on clear, accurate reporting and useful information that helps readers stay informed about current affairs and developments affecting their communities. His work highlights relevant stories, emerging trends, and important issues, presenting them in a balanced, accessible, and reader-friendly manner.
