Starbucks Posts Strong US Sales as Turnaround Gains Momentum

Starbucks is entering fiscal 2027 with stronger momentum in its US business after reporting substantial comparable-store sales growth for the fourth quarter of fiscal 2026. The Seattle-based coffee company announced its results on October 29, 2026, as CEO Brian Niccol highlighted improvements in customer traffic, operating performance and opportunities for future expansion.

For the quarter ended September 27, Starbucks recorded adjusted earnings of $0.80 per share, exceeding the analyst consensus of $0.72, according to CNBC. However, revenue declined 4% year over year to $9.14 billion, missing expectations of $9.23 billion, partly reflecting the restructuring of its China operations.

Net income attributable to Starbucks reached $677.2 million, or $0.59 per share, compared with $133.1 million, or $0.12 per share, during the same period a year earlier. Excluding restructuring, impairment charges and other items, adjusted earnings reached $0.80 per share.

Global comparable-store sales increased 7.2%, surpassing analysts' expectations of 6%, according to StreetAccount. Transactions grew 1.8%, while higher average customer spending also contributed to the improvement.

The US market delivered an even stronger performance, with comparable-store sales climbing 7.7%, above the 6.5% analyst estimate. Starbucks also reported a 460-basis-point expansion in operating margin to 14%, reflecting improved sales performance.

Niccol described the company's recovery as a foundation for renewed expansion during an appearance on Sozzi Unleashed.

"I think we're back to being just a growth company. I think the turn has occurred. And now we have all these growth opportunities in front of us because we've got a strong foundation," said Brian Niccol, Starbucks CEO.

The company attributes its domestic recovery to improvements in customer service, store environments and marketing under its turnaround strategy. Niccol also highlighted menu innovation and merchandise as important factors in attracting customers.

"Starbucks brand affinity is at near record levels as our menu innovation, marketing and merchandise continue to create moments that drive culture and bring people into our coffee houses," Niccol told analysts.

Starbucks reported particularly strong demand during its North American autumn menu launch, which featured products including the pumpkin spice latte. The company also said its matcha business had reached $1 billion in sales.

Outside North America, international comparable-store sales increased just 0.9%, falling short of the 3.2% analyst estimate. Declining customer traffic offset improvements in average transaction value, highlighting the uneven nature of the company's recovery across markets.

Starbucks has also adjusted its international operating structure. Following its China joint venture transition, the company has shifted much of its international operations toward licensed business models that give local operators greater responsibility. Reuters reported in September that Starbucks was also exploring the sale of a majority stake in its Japan business.

During the quarter, Starbucks opened 303 net new cafes. However, the company announced plans in September to close approximately 1% of its North American locations, representing around 250 stores, as part of its restructuring efforts.

By the end of fiscal 2026, Starbucks had completed more than 1,700 cafe renovations across the United States and Canada. The improvements include additional seating and softer lighting, with the company reporting stronger customer transactions at renovated locations.

Niccol also outlined additional investment priorities, including artificial intelligence technology for drive-through operations, expanded afternoon beverage options without caffeine and more portable food products.

"After a strong quarter that showcased significant margin improvement and continued momentum on top-line, we believe Starbucks has raised the bar for excellence," said Danilo Gargiulo, Bernstein analyst.

For fiscal 2027, Starbucks expects adjusted earnings of $3.15 to $3.25 per share, exceeding the analyst consensus of $3.14. The company also projects 4% comparable-store sales growth across North America.

However, its revenue outlook remains more cautious, with an anticipated 1% decline compared with analysts' forecast of 1.4% growth. Chief Financial Officer Cathy Smith attributed the pressure partly to an additional reporting week, the China joint venture transition, slightly lower coffee prices and slower growth in new North American cafe openings.

Niccol said Starbucks was ahead of schedule in achieving the fiscal 2028 targets established during its January investor day. In a company video, he described the priorities guiding the next stage of its business.

"We enter fiscal 2027 with momentum, a clear set of priorities and higher ambitions for what Starbucks can become," said Brian Niccol, Starbucks CEO.