It has been about a month since the last earnings report for Starbucks (SBUX). Shares have added about 4.5% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Starbucks due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for Starbucks Corporation before we dive into how investors and analysts have reacted as of late.
Starbucks Q1 Earnings Miss Estimates, Revenues Increase Y/Y, Stock Up
Starbucks reported mixed first-quarter fiscal 2026 results, with earnings missing the Zacks Consensus Estimate and net revenues beating the same. The top line increased, but the bottom line declined from the prior-year quarter’s figure.
Following the results, the company’s shares are up 8% in the pre-market trading session today. Starbucks’ management said first-quarter fiscal 2026 results show the “Back to Starbucks” strategy is gaining traction sooner than expected, with sales improving as more customers return and visit often. The company is confident this momentum will translate into sustainable earnings growth and support long-term profitability.
Discussion on Q1 Earnings, Revenues & Comps of SBUX
In the fiscal first quarter, the company reported earnings per share (EPS) of 56 cents, missing the Zacks Consensus Estimate of 58 cents. The bottom line also decreased 19% from 69 cents reported in the prior-year quarter.
Net revenues of $9.91 billion beat the consensus mark of $9.64 billion. The reported value was up 5.5% year over year.
Global comparable store sales increased 4% year over year. The upside was backed by a 3% increase in comparable transactions and a 1% increase in average ticket.
During first-quarter fiscal 2026, the company added 128 net new locations, bringing the total store count to 41,118, with 52% operated by it and 48% run by licensed partners.
Starbucks’ Overall Margin Contracts in Q1
The company’s non-GAAP operating margin contracted 180 basis points (bps) to 10.1% from the prior-year quarter. This was largely due to increased labor spending to support the “Back to Starbucks” strategy, along with inflationary headwinds stemming from tariffs and higher coffee costs.
SBUX’s Segmental Details
North America: The segmental net revenues were $7.28 billion, up 3% year over year. Its comparable store sales rose 4% against a decline of 4% in the prior-year quarter. Average transactions increased 3%, whereas the change in tickets rose 1% year over year.
Operating margin contracted 480 bps to 11.9% from 16.7% in the prior-year quarter.
International: This segment’s net revenues of $2.06 billion increased 10% year over year. Comparable store sales increased 5% in contrast to a 4% fall reported in the prior-year quarter. Average transactions increased 3%, whereas the change in tickets fell 2% year over year.Operating margin expanded 100 bps year over year to 13.7%. The improvement was mainly supported by sales leverage and reduced store operating as well as depreciation and amortization expenses, following the classification of Starbucks’ China retail assets as held for sale and the halt of related depreciation. These benefits were partly offset by restructuring charges tied to store closures and ongoing inflationary pressures, largely from higher coffee costs.In the fiscal first quarter, comps in China were up 7% against a 6% decline reported in the prior-year quarter. Transactions rose 5%, whereas the change in tickets was up 2% year over year.
Channel Development: Net revenues in the segment increased 20% year over year to $522.7 million. The upside was driven by an increase in contributions to the Global Coffee Alliance.
Operating margin declined to 41.3% from 47.7% a year earlier, mainly due to an unfavorable sales mix and higher global product costs, though this was partly cushioned by higher income from the North American Coffee Partnership joint venture.
SBUX’s Financial Details
The company ended the fiscal first quarter with cash and cash equivalents of $3.41 billion compared with $3.22 billion at the end of Sept. 28, 2025. As of Dec. 28, long-term debt totaled $14.6 billion, almost flat compared with Sept. 28, 2025.
Meanwhile, management declared a quarterly cash dividend of 62 cents per share. The dividend is payable on Feb. 27, 2026, to its shareholders of record as of Feb. 13.
Fiscal 2026 Outlook of SBUX
Starbucks has outlined its expectations for fiscal 2026, signaling steady growth and gradual margin improvement. The company anticipates global and U.S. comparable store sales to rise at least 3%, with overall net revenues increasing at a similar pace. Management also expects a modest year-over-year expansion in non-GAAP operating margin.
Non-GAAP earnings per share are projected to be between $2.15 and $2.40. In terms of expansion, Starbucks plans to open roughly 600 to 650 net new
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a upward trend in estimates review.
VGM Scores
At this time, Starbucks has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a score of D on the value side, putting it in the bottom 40% for value investors.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Starbucks has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Starbucks Corporation (SBUX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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