Starbucks reported mixed results on Thursday, October 29, and the market’s reaction was muted. The coffee chain beat profit expectations and its US stores performed better than expected, but total revenue fell short. Shares slipped nearly 2% in after-hours trading.
It is a good example of a turnaround that is working in one place but not yet everywhere.
What Happened
For its fiscal fourth quarter, which ended September 27, 2026, Starbucks reported adjusted earnings of $0.80 per share, beating the $0.72 analysts expected. Reported net income rose to $677.2 million, or $0.59 per share, from $133.1 million a year earlier, when restructuring costs weighed on profits.
Revenue, however, fell 4% to $9.14 billion, below the $9.23 billion analysts expected. The main reason for the drop is not weak demand. Starbucks converted its China retail business into a licensed joint venture earlier in the year, which means those sales no longer count in the same way in its reported revenue.
The most encouraging number was same-store sales, which measure sales at stores open for at least a year. Global same-store sales rose 7.2%, beating the 6% analysts expected. US same-store sales rose 7.7%, above the 6.5% forecast. That was the company’s fifth straight quarter of better-than-expected same-store sales growth.
International stores were the weak spot. Same-store sales outside North America rose only 0.9%, well below the 3.2% analysts expected, as fewer customers visited, even though those who came spent more per visit.
For the full fiscal year, revenue rose 2% to $37.9 billion, and adjusted earnings rose 28% to $2.72 per share.
Why It Happened
Starbucks has been working on a turnaround plan called “Back to Starbucks,” focused on faster service, better stores and popular seasonal products. In the United States, that plan appears to be working. Customers are visiting more often, and average spending per visit rose, helped by seasonal drinks and menu changes.
Outside the United States, the recovery is slower. International traffic fell, which offset higher spending per visit. The company also closed about 250 company-owned stores in North America in September as part of a review of its store network, and it opened 303 net new stores overall in the quarter, ending with 41,607 locations worldwide.
Think of it like a chain of shops where the home stores are busy again, but the overseas shops are still quiet. The overall picture looks mixed because the two parts are moving in different directions.
Key Figures
- Q4 revenue: $9.14 billion, down 4% (expected: $9.23 billion)
- Q4 adjusted earnings per share: $0.80 (expected: $0.72)
- Q4 reported net income: $677.2 million, or $0.59 per share
- Global same-store sales: up 7.2% (expected: 6%)
- US same-store sales: up 7.7% (expected: 6.5%)
- International same-store sales: up 0.9% (expected: 3.2%)
- Full-year revenue: $37.9 billion, up 2%
- Fiscal 2027 adjusted earnings forecast: $3.15 to $3.25 per share
Why It Matters
Starbucks is one of the most watched consumer brands in the world, and its results say something about everyday spending. When US same-store sales grow 7.7%, it suggests American consumers are still willing to pay for a daily coffee, even at higher prices. But weak international traffic is a reminder that the recovery is not global yet.
The results also show why revenue alone can mislead. Starbucks’ revenue fell mainly because of the China accounting change, not because customers stopped buying coffee. Same-store sales, which compare like with like, tell a healthier story.
What Happens Next
For fiscal 2027, Starbucks expects adjusted earnings of $3.15 to $3.25 per share, slightly above the $3.14 analysts expected. But it also expects total revenue to fall about 1%, below the 1.4% growth analysts had forecast, again largely because of the China change. The company expects North American same-store sales to grow about 4%.
Chief executive Brian Niccol said Starbucks enters the new fiscal year with momentum and is ahead of schedule on its targets for fiscal 2028. The test will be whether international stores start to recover the way US stores have.
Final Thoughts
Starbucks’ quarter was neither a clear win nor a clear loss. The US turnaround is gaining steam, profits beat expectations, and the company raised its ambitions. But revenue missed, and international stores lagged. For investors, the question is simple: can the US recovery spread to the rest of the world?
Disclaimer: This article is for educational and informational purposes only and does not constitute financial advice.
Sources: CNBC, “Starbucks sales miss expectations, but its U.S. turnaround is gaining steam” (https://www.cnbc.com/2026/10/29/starbucks-sbux-q4-2026-earnings.html); Seeking Alpha earnings recap (https://seekingalpha.com/news/4660702-starbucks-revenue-miss-overshadows-solid-fq4-results-upbeat-profit-guidance).
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