Starbucks (NASDAQ:SBUX) Posts Earnings Results, Beats Estimates By $0.20 EPS

Key Points

• Starbucks beat quarterly expectations: Adjusted EPS was $0.85, $0.20 above consensus, while revenue reached $9.32 billion versus the $9.17 billion estimate.
• Sales momentum and profitability strengthened: Global comparable sales increased 7.9%, operating margin expanded to 14.4%, and the company raised fiscal 2026 adjusted EPS guidance to $2.55–$2.65.
• “Back to Starbucks” initiatives are gaining traction: Improvements in staffing, service, supply-chain execution and store remodels supported results, while the company plans further international expansion and a more capital-light China strategy.

Starbucks (NASDAQ:SBUX - Get Free Report) issued its quarterly earnings data on Wednesday. The coffee company reported $0.85 EPS for the quarter, topping the consensus estimate of $0.65 by $0.20, FiscalAI reports. Starbucks had a negative return on equity of 29.24% and a net margin of 3.89%.The firm had revenue of $9.32 billion during the quarter, compared to the consensus estimate of $9.17 billion. Starbucks updated its FY 2026 guidance to 2.550-2.650 EPS.

Here are the key takeaways from Starbucks' conference call:

• Strong sales momentum continued: Global comparable sales rose 7.9% in Q3, with U.S. comps up 7.9% on balanced transaction and ticket growth. Starbucks expects U.S. Q4 comps of at least 6.5% and is raising full-year global comp guidance to nearly 6%.
• Profitability improved significantly: Consolidated operating margin expanded 430 basis points to 14.4%, while EPS increased 70% to $0.85. The company raised full-year margin guidance to above 11% and EPS guidance to $2.55–$2.65, supported by sales leverage, cost savings, and easing coffee costs.
• Back to Starbucks initiatives are gaining traction: Green Apron Service, better staffing and supply-chain execution, and coffeehouse uplifts are improving service consistency and food availability. Starbucks surpassed 1,000 North American uplifts ahead of schedule and plans at least 1,500 by the end of fiscal 2026, while Rewards membership reached 35.8 million active U.S. members.
• Portfolio and international strategy are shifting: The China retail transition to a 40%-owned joint venture reduced reported revenue but creates a more capital-light model, with Starbucks targeting up to 20,000 China stores over time. North American net new company-operated growth may remain modest through fiscal 2027 as the company evaluates closures of underperforming locations and redirects resources toward remodels and international expansion.

Starbucks Trading Up 1.0%

Shares of SBUX stock traded up $1.04 on Wednesday, hitting $104.14. 12,439,453 shares of the stock were exchanged, compared to its average volume of 8,255,398. The firm has a market capitalization of $118.69 billion, a PE ratio of 78.89, a P/E/G ratio of 2.06 and a beta of 0.98. Starbucks has a one year low of $77.99 and a one year high of $109.23. The firm's 50 day moving average is $102.15 and its two-hundred day moving average is $98.92.

Starbucks Dividend Announcement

The company also recently declared a quarterly dividend, which will be paid on Friday, August 28th. Stockholders of record on Friday, August 14th will be given a dividend of $0.62 per share. This represents a $2.48 dividend on an annualized basis and a dividend yield of 2.4%. The ex-dividend date of this dividend is Friday, August 14th. Starbucks's dividend payout ratio is currently 187.88%.

Insider Activity

In related news, CEO Brady Brewer sold 2,229 shares of the company's stock in a transaction that occurred on Monday, July 6th. The shares were sold at an average price of $104.00, for a total transaction of $231,816.00. Following the sale, the chief executive officer directly owned 77,364 shares in the company, valued at approximately $8,045,856. This represents a 2.80% decrease in their position. The sale was disclosed in a filing with the SEC, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 6,687 shares of company stock valued at $679,033 over the last 90 days. Insiders own 0.03% of the company's stock.

Institutional Investors Weigh In On Starbucks

A number of institutional investors and hedge funds have recently modified their holdings of SBUX. Brighton Jones LLC raised its holdings in shares of Starbucks by 86.5% in the 4th quarter. Brighton Jones LLC now owns 176,722 shares of the coffee company's stock valued at $16,126,000 after acquiring an additional 81,952 shares in the last quarter. Schnieders Capital Management LLC. increased its stake in Starbucks by 47.0% in the 2nd quarter. Schnieders Capital Management LLC. now owns 3,642 shares of the coffee company's stock worth $334,000 after purchasing an additional 1,164 shares during the period. Flow Traders U.S. LLC bought a new stake in Starbucks during the 2nd quarter valued at $288,000. Gamco Investors INC. ET AL increased its position in Starbucks by 92.8% during the 2nd quarter. Gamco Investors INC. ET AL now owns 5,225 shares of the coffee company's stock valued at $479,000 after purchasing an additional 2,515 shares during the period. Finally, NewEdge Advisors LLC boosted its position in Starbucks by 7.6% during the 2nd quarter. NewEdge Advisors LLC now owns 112,710 shares of the coffee company's stock valued at $10,328,000 after acquiring an additional 7,978 shares in the last quarter. 72.29% of the stock is owned by hedge funds and other institutional investors.

Key Starbucks News

Here are the key news stories impacting Starbucks this week:

• Positive Sentiment: Global comparable-store sales rose 7.9%, driven primarily by a 4.2% increase in comparable transactions, indicating stronger customer traffic as well as improved spending per visit. Starbucks Reports Q3 Fiscal Year 2026 Results
• Positive Sentiment: Adjusted earnings reached $0.85 per share, exceeding consensus estimates near $0.65-$0.66, while revenue of approximately $9.32 billion also topped forecasts. Reported GAAP EPS was $0.91, up sharply from the prior year. Starbucks Q3 Earnings Surpass Estimates
• Positive Sentiment: Starbucks raised fiscal 2026 adjusted EPS guidance to $2.55-$2.65 from $2.25-$2.45 and set a 6% global comparable-sales growth target. The outlook is above the roughly $2.39 analyst consensus. Starbucks Raises Its Full-Year Guidance
• Positive Sentiment: North American revenue increased 7% to $7.4 billion, while international margins improved, reinforcing expectations that operational improvements can support earnings growth. Starbucks Q3 Comparable Sales Rise 7.9%

Analyst Ratings Changes

A number of research firms recently commented on SBUX. Wells Fargo & Company reissued an "overweight" rating and issued a $120.00 price target (up from $115.00) on shares of Starbucks in a research report on Thursday, July 16th. Evercore lifted their target price on shares of Starbucks from $110.00 to $115.00 and gave the stock an "outperform" rating in a research report on Wednesday, April 29th. Weiss Ratings restated a "hold (c)" rating on shares of Starbucks in a research note on Monday, July 20th. Royal Bank Of Canada lowered Starbucks from a "sector perform" rating to a "positive" rating in a report on Thursday, May 14th. Finally, Deutsche Bank Aktiengesellschaft reiterated a "buy" rating on shares of Starbucks in a report on Wednesday, April 29th. Nineteen investment analysts have rated the stock with a Buy rating, ten have given a Hold rating and two have issued a Sell rating to the company's stock. Based on data from MarketBeat.com, Starbucks has an average rating of "Moderate Buy" and an average price target of $109.42.

About Starbucks

Starbucks Corporation is a global coffeehouse chain and roaster that operates, licenses and franchises coffee shops and related retail businesses. Founded in Seattle, Washington in 1971 by Jerry Baldwin, Zev Siegl and Gordon Bowker, the company grew from a single store focused on whole-bean coffee and equipment into a broad consumer-facing brand. Howard Schultz, who joined the company later and served in senior leadership roles, is widely credited with transforming Starbucks into a mass-market specialty coffee retailer and expanding its footprint internationally.

Starbucks' core activities center on the retail sale of hot and cold specialty beverages, whole-bean and packaged coffees, teas and ready-to-drink products, along with complementary food items and merchandise such as mugs and brewing equipment.

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