Starbucks (SBUX.US) Q4 U.S. business recovers beyond expectations, new fiscal year growth guidance slows to 4%

According to Jinzhong Finance APP, Starbucks (SBUX.US) released its Q4 FY2026 earnings report after the US market closed on October 29 (early morning Beijing time on October 30). The financial report shows that Starbucks reported Q4 revenue of $9.14 billion, a year-on-year decline of about 4%, below the market expectation of $9.22 billion. The drop was mainly due to Chinese retail business transitioning to a joint venture licensing model with Boyu Capital, so it was no longer consolidated in the accounts. On the profitability side, adjusted earnings per share reached $0.80, up 54% year-on-year, beating analysts’ expectations of $0.72.

Net profit was $677 million, rising more than fourfold year-on-year, partly reflecting a decrease in restructuring and impairment costs.

Global same-store sales grew 7.2%, marking the fifth consecutive quarter of positive growth and exceeding the market expectation of around 6%. In particular, same-store sales in the US grew by 7.7%, higher than expected, benefiting from store renovations and the strong performance of the coffee chain’s autumn menu offerings. Growth in North America was 7.9%; in international markets, the gain was only 0.9%, below the expected 3.2%, as a drop in transaction volume offset the increase in average ticket size.

Through store upgrades, service improvements, menu updates, and more targeted marketing, Starbucks has attracted more customers. At the same time, the company closed hundreds of underperforming stores to focus efforts on locations with better results. In September, about 250 stores were closed in North America.

According to data from the foot traffic analysis firm Placer.ai, Starbucks’ US stores saw customer growth surpassing peers, aligning with the financial report data. However, entering October, foot traffic growth leveled off, indicating momentum is tapering amid a high base.

Chief Executive Officer Laxman Narasimhan stated on the company’s call with analysts, "The fundamentals of the company are strengthening," and "I can’t stress this enough."

Maintaining the current growth rate will become increasingly challenging in the future. Starbucks anticipates that for the fiscal year beginning in late September, North American same-store sales will grow about 4%, signaling a slowdown after three consecutive quarters of growth above 7%.

The coffee chain’s long-term target is US same-store sales growth of 3% or higher.

The company expects revenue for FY2027 to decline by about 1% (including an approximately $700 million impact from a 53rd week and Chinese business transformation factors), North American same-store sales to grow about 4%, and earnings per share to reach $3.15–$3.25, with the market expecting $3.16.