Key Takeaways
- Starbucks Earnings beat driven by higher traffic and increased customer spending
- Same-store sales growth reflects improved operations and menu strategy
- Outlook raised on sustained demand and margin stability expectations
Starbucks raised its full-year outlook after reporting its fourth consecutive quarter of same-store sales growth, supported by higher customer traffic and increased spending per visit.
The company now expects fiscal 2026 adjusted earnings per share in the range of $2.55 to $2.65, compared to its earlier guidance of $2.25 to $2.45. It also projects global same-store sales growth of nearly 6% and more than 6% growth in the U.S., up from prior expectations of at least 5%.
Sales growth and margin expansion drive performance
For the quarter ended June 28, Starbucks reported adjusted Starbucks earnings per share of 85 cents, exceeding expectations of 66 cents. Revenue came in at $9.32 billion, above the expected $9.16 billion.
Net income attributable to the company rose to $1.05 billion, or 91 cents per share, compared to $558.3 million, or 49 cents per share, in the previous year. Operating margins improved to 13.6% from 13.3%, supported in part by tariff refunds that offset earlier cost pressures.
Despite overall revenue declining 1% to $9.3 billion due to the sale of a controlling stake in its China business, underlying performance remained strong. Same-store sales rose 7.9%, exceeding estimates of 6%, with growth driven by both higher transactions and increased average ticket size.
In North America, same-store sales increased 8.1%, supported by a 4.5% rise in customer traffic and a 3.5% increase in average spending. Customers showed a willingness to spend more through product customisation and food additions alongside beverages.
Strategy execution and store expansion plans
The company’s operational improvements under its current strategy focused on enhancing customer experience and service efficiency. Investments in labour and store upgrades have contributed to improved in-store performance and higher customer engagement.
Menu adjustments also supported growth, with the company removing underperforming items and introducing new beverages. Its Refreshers category continued to expand, generating $2 billion in annual revenue and posting double-digit growth during the quarter. The category has helped increase customer visits beyond peak morning hours.
Internationally, same-store sales rose 5.7%. Following the formation of a joint venture in China, around 90% of international stores now operate under a licensed model, which supports Starbucks earnings through a more asset-efficient structure.
During the quarter, Starbucks added 175 net new stores and completed over 1,000 store upgrades, reaching its fiscal 2026 target ahead of schedule. The company now plans at least 1,500 store renovations by the end of fiscal 2026, with further acceleration expected.
Each store upgrade costs approximately $150,000 and has contributed to higher transaction volumes. Improvements typically include increased seating capacity and updated interiors designed to enhance customer experience.
The company is also reviewing its North American store network, which may lead to additional closures. In fiscal 2025, its footprint in the region declined by 1%.
The overall performance highlights steady demand recovery, improved operational execution, and a focus on enhancing customer engagement across markets.
