Starbucks Earnings Rise on U.S. Sales and Margin Strength
Starbucks earnings rose as U.S. comps and margin expansion lifted Q4 results while China JV conversion and fiscal-2027 guidance signal slower growth.
KEY TAKEAWAYS
- North America comparable coffeehouse sales rose 7.9%, driven by higher ticket and more transactions.
- Consolidated net revenue fell to $9.1 billion after China retail converted to a licensed joint venture.
- Fiscal 2027 guide targets $3.15-$3.25 non-GAAP EPS and ~4.0% North America comps, implying slower growth.
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Starbucks Corp. reported Q4 fiscal 2026 results on Oct. 29, 2026, showing earnings growth driven by U.S. comparable sales and higher ticket values that boosted margins. International sales lagged, and management signaled slower comparable-sales growth for fiscal 2027.
Q4 Results and Operating Performance
In the 13-week quarter ended Sept. 27, 2026, Starbucks said global comparable coffeehouse sales rose 7.2%, driven by a 5.2% increase in average ticket size and a 1.8% rise in comparable transactions. North America comparable sales increased 7.9%, with a 5.0% gain in average ticket and a 2.7% rise in transactions. U.S. comparable sales rose 7.7%. International comparable sales advanced 0.9%, as higher average ticket values were partly offset by fewer transactions.
Consolidated net revenue fell about 4.5% year over year to $9.141 billion, primarily reflecting Starbucks’ conversion of its China retail operations to a licensed joint-venture model. The company’s Form 8-K filing reported a $536.3 million pretax gain related to that divestiture.
Profitability improved sharply. GAAP operating income rose to $898.4 million from $308.5 million a year earlier, lifting GAAP operating margin by 790 basis points to 10.8%. Non-GAAP operating margin reached 14.0%, up roughly 450 basis points on a constant-currency basis. GAAP diluted earnings per share (EPS) was $0.59, compared with $0.12 a year earlier. Non-GAAP diluted EPS rose 54% year over year to $0.80. Net earnings attributable to Starbucks totaled $677.2 million, up from $133.1 million in the prior-year quarter.
Starbucks opened 303 net new coffeehouses during the quarter and ended fiscal 2026 with 41,607 locations worldwide. For the full fiscal year, net revenue increased 2% to $37.91 billion, while non-GAAP EPS climbed 28% to $2.72. The company described the results as the fifth consecutive quarter of positive comparable-sales growth and the third consecutive quarter of margin expansion.
Fiscal 2027 Guidance and China Transition
Looking ahead, Starbucks projected fiscal 2027 non-GAAP diluted EPS between $3.15 and $3.25, with North America comparable coffeehouse sales growth of about 4.0% and a non-GAAP operating margin of 13.5% to 14.0%. The company expects consolidated net revenue to decline roughly 1% year over year, reflecting a roughly $700 million impact from a 53rd fiscal week and the ongoing China operating-model transition.
Management plans to resume share repurchases in fiscal 2027 and pursue disciplined store growth both in the U.S. and internationally, citing approximately 1,200 net new coffeehouses as a reference point. Priorities for the year include continued comparable-sales growth, margin expansion, menu innovation, and improved digital execution.
The results highlight a split picture: strong U.S. demand and expanding margins contrast with the China operating-model change, which complicates top-line comparisons as Starbucks executes its fiscal 2027 plan.
