Starbucks raises annual profit guidance after global comparable sales jump 7.9 percent
The coffee chain exceeded third-quarter earnings expectations and raised its full-year outlook, signaling that chief executive Brian Niccol’s operational turnaround is successfully driving traffic and margins despite broader consumer spending pressures.
Starbucks reported fiscal 2026 third-quarter revenue of $9.32 billion and adjusted earnings per share of 85 cents, surpassing analyst expectations of $9.16 billion and 66 cents respectively. The company also raised its full-year guidance across multiple key metrics, including lifting its adjusted EPS forecast to a range of $2.55 to $2.65.
Global comparable store sales increased 7.9 percent during the April-to-June period, easily beating the 5.7 percent consensus estimate. This robust growth demonstrates that the company is successfully driving both customer transactions and average ticket sizes, even as elevated gas prices and inflation squeeze household budgets.
Following the results, shares climbed more than 5 percent in extended trading to approach $110, potentially setting a new 52-week high. The stock is up 23.7 percent this year, significantly outperforming the broader S&P 500 and the consumer discretionary sector, which has been weighed down by macroeconomic concerns.
Chief executive Brian Niccol, who launched his Back to Starbucks turnaround strategy in late 2024, emphasized that the company is still capturing market share across different day parts. "If you look at where the business was, there's still lots of space to add more transactions both in the morning and in the afternoon," Niccol stated. "We've made tremendous progress on both day parts, but there's still a lot of room for growth."
North America comparable sales rose 8.1 percent, with the U.S. market specifically growing 7.9 percent. Chief financial officer Cathy Smith highlighted that the introduction of Energy Refreshers and new afternoon food options like wraps are driving a record food attach rate at company-operated U.S. stores.
Profitability also improved, with adjusted operating margins exceeding expectations and moving closer to the company's 2028 target of 13.5 to 15 percent. Smith noted that margins expanded on a year-over-year basis excluding tariff refunds, adding, "We expect the same fundamental drivers that supported margin expansion in Q3 to continue in Q4."
Total revenue showed a slight year-over-year decline primarily because Starbucks moved its China operations into a joint venture with a private-equity firm. The company utilized proceeds from this transaction to pay down $1.3 billion in debt, streamlining its balance sheet while navigating intense local competition in the region.
Looking ahead, Starbucks now expects full-year consolidated net revenues to show flat to slight growth, while global comparable sales are projected to near 6 percent. For the current fourth quarter, the company anticipates U.S. comparable sales growth of at least 6.5 percent as it continues to open 600 to 650 net new locations globally.
