Starbucks stock: Earnings beat offsets China-led revenue decline

Starbucks reported stronger-than-expected adjusted earnings for the fiscal fourth quarter on Thursday, October 29, while revenue fell short of analysts' estimates because of the company's shift to a licensed joint venture model in China. The results were published in the company's financial release.

Starbucks generated fourth-quarter net revenue of 9.14 billion US dollars, down 4.5 percent from a year earlier. The decline primarily reflected the conversion of Starbucks' China retail operations to a licensed joint venture structure, which reduced consolidated company-operated revenue. GAAP earnings per diluted share rose to 0.59 US dollars from 0.12 US dollars, while non-GAAP earnings per share increased 54 percent to 0.80 US dollars.

North America Drives The Turnaround

Global comparable coffeehouse sales increased 7.2 percent, marking the fifth consecutive quarter of growth. The result was supported by a 5.2 percent increase in average ticket and a 1.8 percent rise in comparable transactions. North America comparable sales advanced 7.9 percent, with transactions up 2.7 percent and average ticket up 5.0 percent. U.S. comparable sales rose 7.7 percent.

North America revenue increased 6.2 percent to 7.33 billion US dollars, while segment operating income rose to 898.4 million US dollars from 308.5 million US dollars. The segment's operating margin reached 12.3 percent, compared with 4.5 percent a year earlier. International comparable sales increased only 0.9 percent, as a 3.7 percent ticket increase was largely offset by a 2.8 percent decline in transactions.

Consolidated non-GAAP operating margin expanded to 14.0 percent from 9.5 percent. Starbucks said lower restructuring costs and sales leverage supported the improvement. The company also recorded a 536.3 million US dollar pretax gain from the divestiture of its China retail operations during fiscal 2026, an item excluded from its non-GAAP measures.

Fiscal 2027 Outlook Sets The Next Test

Starbucks expects consolidated net revenue to decline by approximately 1 percent in fiscal 2027, partly because of the China transition and the comparison with company-operated China revenue in the first half of fiscal 2026. The coming fiscal year includes 53 weeks, contributing approximately 700 million US dollars of revenue.

Management guided to North America comparable-sales growth of approximately 4.0 percent, non-GAAP operating margin of 13.5 percent to 14.0 percent and non-GAAP earnings per share of 3.15 to 3.25 US dollars. Starbucks also plans approximately 1,200 net new coffeehouses globally and intends to resume share repurchases. The board declared a quarterly dividend of 0.63 US dollars per share, payable November 27 to shareholders of record on November 13.

Starbucks stock traded at 95.62 euros on Lang & Schwarz at 12:09 CET on Friday, October 30, 2026.

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