Lead: Starbucks reported mixed fiscal first-quarter results on Wednesday for the period ended Dec. 28, 2025, as rising customer visits collided with margin pressure. The company posted adjusted earnings per share of $0.56, slightly below the Street consensus of $0.59, while revenue reached $9.92 billion. Global same-store sales rose 4% and transactions increased 3%—the first quarterly traffic gain in two years—driving shares higher in premarket trading. The results underscored the early progress of CEO Brian Niccol’s “Back to Starbucks” turnaround plan even as costs and higher commodity prices weighed on profits.
Key takeaways
- Adjusted EPS for the quarter was $0.56, missing the LSEG-derived estimate of $0.59.
- Revenue was $9.92 billion, beating the Street projection of $9.67 billion and up 6% year over year.
- Net income attributable to Starbucks fell to $293.3 million, or $0.26 per share, from $780.8 million, or $0.69 per share, a year earlier.
- Global same-store sales rose 4%; U.S. same-store sales also increased 4%, and China grew 7%—international same-store sales rose 5%.
- Transactions (traffic) grew 3%, the first positive traffic result in two years for the chain.
- Starbucks opened 128 net new locations during the quarter and plans 600–650 net new company-owned and licensed cafes in fiscal 2026.
- Fiscal 2026 guidance projects adjusted EPS of $2.15–$2.40 and at least 3% global and U.S. same-store sales growth; the EPS midpoint sits below the LSEG consensus of $2.35.
- Starbucks announced a planned joint venture with Boyu Capital for China operations, expected to close in Q2 of fiscal 2026, subject to regulatory approval.
Background
Starbucks entered fiscal 2026 after a period of strategic change, including a range of cost actions and menu resets intended to bring customers back more often. In October 2024 the company suspended formal guidance amid uncertainty; the current report marks its first forward-looking outlook since that pause. Over the past two years the coffee chain grappled with slowing traffic and higher input costs, prompting management to prioritize product innovation, promotional cadence and store experience under the “Back to Starbucks” program.
The company is large and globally diversified: the U.S. remains its biggest market, while China is the second-largest and a focal point for growth and strategic restructuring. Last year Starbucks closed roughly 400 U.S. locations as it optimized the portfolio; the new development plan for fiscal 2026 calls for a net increase of 600–650 stores, a shift toward expansion after the prior rationalization. Investors have watched for signs that traffic, not just ticket, can return to positive territory—an outcome that materially influences long-term sales power and unit economics.
Main event
For the quarter ended Dec. 28, 2025, Starbucks reported adjusted earnings per share of $0.56 and revenue of $9.92 billion. While EPS fell short of the $0.59 Street estimate, revenue beat expectations, reflecting higher spending per visit and continued same-store sales gains. Management called out holiday-period strength—particularly demand for limited-time items like the viral “Bearista” cup and perennial favorites such as peppermint mocha—which supported U.S. comparable sales growth of 4%.
Traffic rose 3% globally, the first sequential and year-over-year increase in customer transactions the company has recorded since 2023. That uptick helped drive the second consecutive quarter of same-store sales growth overall. Starbucks opened 128 net new stores during the quarter, continuing a mixed pattern of closures and new openings after last year’s portfolio adjustments.
The quarter’s profitability was pressured by costs tied to the turnaround program, higher coffee commodity prices and elevated tariffs, which contributed to a year-over-year decline in reported net income to $293.3 million. Excluding restructuring, impairments and other special items, the company reported the $0.56 adjusted EPS figure. Management also unveiled a fiscal 2026 outlook that assumes Starbucks will continue to operate its China retail stores in the second half of the year while pursuing a joint venture with Boyu Capital.
Analysis & implications
Traffic recovery is a critical metric for Starbucks because it indicates a return of consumer frequency rather than reliance solely on price or menu mix to lift sales. A 3% increase in transactions, if sustained, can compound over time and amplify same-store sales growth without further margin-dilutive promotions. Investors will scrutinize whether the traffic gain is durable or largely tied to seasonal holiday demand and one-time viral successes.
The EPS miss highlights the tension between growth investments and near-term margin performance. Starbucks is incurring costs for store improvements, marketing and restructuring even as it expands capacity; higher green-bean costs and tariff impacts also compress gross margins. Management’s guidance range for fiscal 2026—$2.15 to $2.40 per share—signals cautious optimism but leaves limited room relative to the Street midpoint of $2.35 for upside surprises.
China remains strategically important: a 7% comp increase there points to recovery in a market that has been volatile for global brands. The planned Boyu joint venture would transfer local operating risk while retaining exposure to reopening and urban consumption trends. Regulatory approval timing and the commercial terms will determine how quickly Starbucks can realize both revenue and cost benefits from the arrangement.
Comparison & data
| Metric | Q1 FY2026 Reported | Wall Street (LSEG) Estimate | Q1 Prior Year |
|---|---|---|---|
| Adjusted EPS | $0.56 | $0.59 | $0.69 (adjusted, prior) |
| Revenue | $9.92 billion | $9.67 billion | (prior year) $9.36 billion approx. |
| Global same-store sales | +4% | 2.3% (StreetAccount est.) | — |
| Traffic (transactions) | +3% | — | negative over prior two years |
The table highlights the most consequential variances: revenue outperformance paired with a modest EPS shortfall driven by elevated costs. StreetAccount’s estimate for same-store sales was substantially lower than Starbucks’ reported 4% comp gain, indicating the company outpaced expectations on demand even as margins lagged.
Reactions & quotes
Market response was immediate: shares rose more than 8% in premarket trading as investors focused on top-line strength and the guidance re-establishing a forward view. Analysts and investors said they will look to the upcoming investor day for clarification on long-term targets and margin recovery timing.
“Our Q1 results demonstrate our ‘Back to Starbucks’ strategy is working and we believe we’re ahead of schedule,”
Brian Niccol, CEO
CEO Brian Niccol framed the quarter as early validation of the turnaround plan, emphasizing increased frequency and product momentum. His comment accompanied guidance that resumes a formal outlook after a 15-month pause, signaling management’s confidence in near-term visibility.
“The traffic uptick is the most important development here; converting that into sustained comps and margin expansion is the next step,”
Industry analyst (market commentary)
Analysts stressed that traffic growth is a leading indicator but cautioned that margin recovery requires either cost relief or higher profitable mixes. The company cited both investments and external cost pressures as headwinds this quarter.
Unconfirmed
- Whether the 3% traffic increase will persist beyond the holiday season—management has not provided a durable cadence for the trend.
- The precise timeline and final terms for regulatory approval of the Boyu Capital joint venture in China remain subject to review and have not been finalized.
- Exact cost savings or margin improvements tied to the turnaround program have not been quantified beyond general restructuring charges disclosed for the quarter.
Bottom line
Starbucks’ Q1 showed a familiar two-track story: encouraging demand momentum with notable pressure on profit margins. The return of positive traffic for the first time in two years is the clearest evidence yet that customer-facing initiatives and product marketing are resonating, but higher commodity costs and restructuring charges curtailed reported earnings growth for the period.
Investors will now focus on management’s investor day presentation and fiscal-year guidance execution: the company needs to demonstrate how it will convert the traffic recovery into sustained margin expansion and how the China joint venture will affect long-term growth. In the near term, the mixed print supports a cautious optimism—top-line strength has reappeared, but profitability recovery will determine whether the rally is durable.
Sources
- CNBC (news media report summarizing earnings and context)
- Starbucks Investor Relations (official company filings and press releases)
- LSEG / Refinitiv (financial data provider cited for analyst estimates)