Starbucks Corporation released its fiscal first‑quarter 2026 results, reporting net revenue of $9.915 billion, a 6% year‑over‑year increase that surpassed the consensus estimate of $9.62‑$9.87 billion. Adjusted earnings per share were 56 cents, falling short of the 59‑cent estimate but lower than the 69‑cent figure reported in the same quarter a year earlier.
Revenue growth was driven by a 3% rise in North America sales to $7.28 billion and a 10% jump in international revenue to $2.64 billion, with China sales up 7%. Global comparable‑store sales grew 4%, and U.S. transaction growth turned positive for the first time in eight quarters, reflecting renewed customer traffic in core markets.
Operating margin in the North America segment contracted to 11.9% from 16.7% a year earlier, while the company’s overall GAAP operating margin fell to 9.0% from 11.9%. The compression was driven by labor‑investment costs, higher coffee‑price inflation, an $88.1 million restructuring charge, and a $266 million discrete tax expense related to China operations.
Starbucks reiterated its fiscal 2026 guidance, projecting non‑GAAP EPS of $2.15 to $2.40. CEO Brian Niccol said the “Back to Starbucks” strategy is “ahead of schedule” and that the company remains confident on its path forward, while CFO Cathy Smith highlighted that margin improvement is expected in the second half of the year as cost‑control measures take effect.
Investors highlighted the return of sales momentum and the first positive U.S. comparable‑store growth in two years as key drivers of the favorable market reaction. The revenue beat and the turnaround narrative reinforced confidence in the company’s ability to scale demand while managing cost pressures.
The results also underscore ongoing headwinds, including rising labor costs, coffee‑price inflation, and the impact of the China joint‑venture deconsolidation, which will shift China retail operations to equity accounting. The company’s $2 billion cost‑efficiency program and the planned deconsolidation of China retail are expected to support long‑term profitability, while labor unrest remains a potential risk.
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