From Comps to Coffee Costs: What Will Define SBUX's FY26 Trajectory?

Starbucks Corporation SBUX enters fiscal 2026 with early signs of stabilization, but its path forward will hinge on two central forces: sustaining comp momentum and navigating persistent inflationary pressures, especially coffee costs.

The company ended fiscal 2025 with its first positive global comp growth in seven quarters, driven by improving U.S. traffic trends and solid international performance, including a return to growth in China. Yet, management remains clear: the turnaround is still in its early innings and fiscal 2026 progress may be uneven as the business rebuilds the transaction base.

A major swing factor will be the continued ramp of Green Apron Service. Starbucks’ revamped operating model is focused on staffing, speed and customer connection. Early data is encouraging. U.S. stores saw transaction-led comp growth in September and customer experience scores have improved meaningfully. 

With service execution strengthening across dayparts, especially mornings, Starbucks expects comps to build through fiscal 2026, albeit with the acknowledgment that recoveries are rarely linear. The rollout of store uplifts, expanded morning hours and new menu innovations, from Protein Cold Foam to artisanal bakery items, should help reinforce transaction growth and premium mix.

On the other side of the equation, coffee inflation and tariffs remain stubborn cost headwinds. Management noted that elevated coffee prices are likely to pressure margins through at least the first half of fiscal 2026, with relief expected only later in the year. While Starbucks is aggressively restructuring G&A and improving unit economics through closures of underperforming stores, earnings will continue to lag top-line progress as labor investments annualize. Pricing will be used cautiously, with a targeted approach aimed at preserving improved value perception.

Ultimately, fiscal 2026 for Starbucks will be defined by its ability to keep traffic recovering while absorbing inflation responsibly. If execution holds and cost pressures ease as expected, the foundation laid in fiscal 2025 could translate into a more durable, broad-based recovery.

Competitors to Watch: MCD and BROS Challenge Starbucks in FY26

As Starbucks works to strengthen comps and manage persistent coffee cost inflation, competition from McDonald’s MCD and Dutch Bros BROS will play an influential role in its fiscal 2026 trajectory. McDonald’s McCafé platform continues to gain traction, particularly among value-seeking consumers who are trading down amid macro pressures. With consistent pricing, wide accessibility and strong breakfast traffic, McDonald’s presents a credible alternative for customers who may otherwise visit Starbucks for morning beverages, a daypart the latter aims to protect as it rebuilds throughput and service consistency.

At the same time, Dutch Bros remains one of the fastest-growing players in specialty beverages. Its expanding footprint, youthful customer base and popular Rebel energy drinks challenge Starbucks in the increasingly competitive cold and functional beverage space. Dutch Bros’ emphasis on fast, friendly service directly intersects with Starbucks’ Green Apron Service goals, underscoring the operational discipline the latter must sustain to win share across key dayparts in fiscal 2026.

SBUX’s Price Performance, Valuation & Estimates

Shares of Starbucks have gained 0.9% in the past six months against the industry’s decrease of 9.7%.

Price Performance 

From a valuation standpoint, Starbucks trades at a forward price-to-sales ratio of 2.54, below the industry’s average of 3.39.

P/S (F12M)

The Zacks Consensus Estimate for SBUX’s fiscal 2026 and 2027 EPS implies a gain of 16.9% and 23.6%, respectively, year over year. The EPS estimates for fiscal 2026 and 2027 have declined in the past 30 days.

Starbucks currently has a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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