Starbucks Q3 Earnings Top Estimates, Guidance Raised
Starbucks Q3 earnings beat as comps and transactions climbed and management raised FY26 EPS guidance, prompting investor repositioning.
KEY TAKEAWAYS
- Adjusted EPS $0.85 topped consensus and prompted management to raise FY26 adjusted EPS guidance.
- Global comparable-store sales rose 7.9% driven by 4.2% higher transactions and a 3.6% ticket increase.
- Company lifted full-year same-store sales outlook to roughly 6% and guided Q4 comps near 6.5%.
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Starbucks Corporation reported July 29 that its fiscal third-quarter earnings beat expectations, prompting management to raise full-year adjusted EPS guidance to $2.55–$2.65 per share. CEO Brian Niccol’s "Back to Starbucks" turnaround, focused on faster service, menu innovation, and expanded food offerings, supported stronger traffic and profitability.
Quarter Results and Metrics
For the 13-week quarter ended June 28, 2026, Starbucks reported net revenue of $9.3 billion, down about 1% year over year. Management attributed the decline mainly to the structural impact of divesting its China operations rather than weaker demand. Adjusted (non-GAAP) earnings per share reached $0.85, roughly 29% above consensus estimates near $0.65–$0.66.
Global comparable-store sales rose 7.9%, marking the fourth consecutive quarter of positive growth. This increase was driven by a 4.2% rise in comparable transactions and about a 3.5–3.6% lift in average ticket. North America led the gains with comparable-store sales up 8.1% and visits rising approximately 4.5%, while international markets posted growth near 5.7%.
Guidance and Turnaround Momentum
Starbucks raised its fiscal 2026 adjusted EPS guidance to $2.55–$2.65 per share and lifted global and U.S. same-store sales expectations to roughly 6% or slightly higher. The company also forecast fiscal fourth-quarter same-store sales near 6.5%, signaling sustained momentum entering 2027.
Management credited the "Back to Starbucks" turnaround under Niccol for the improved results. The strategy emphasizes faster service, menu innovation, expanded food offerings, and operational changes such as the Green Apron Service model. These initiatives have enhanced throughput and the guest experience, driving transaction growth rather than relying solely on price increases.
Starbucks has outlined longer-term margin targets of about 13.5–15% by 2028, framing fiscal 2026–27 as years for margin recovery as investments in labor, technology, and stores begin to yield results. The updated outlook and rising traffic suggest management expects these efficiency gains to improve profitability if current trends continue.
