Global same-store sales rose 6.2% and adjusted EPS of 50 cents topped Wall Street's 43-cent estimate
Starbucks $SBUX reported its first profit growth in more than two years and raised its full-year outlook after second-quarter results beat analyst expectations across the board.
The company posted quarterly net income of $510.9 million, a 33% increase compared with $384.2 million in the same period last year. On an adjusted basis, Starbucks earned 50 cents per diluted share, up 22% year over year. Analysts had projected 43 cents per share, according to CNBC.
Total revenue of $9.53 billion represented roughly 9% growth from a year ago, clearing the $9.16 billion consensus estimate, according to CNBC.
A 6.2% gain in global comparable store sales handily surpassed the 4% growth Wall Street had anticipated, according to CNBC, with a 3.8% uptick in transactions and a 2.3% lift in average ticket both contributing. Domestically, customer visits drove a 7.1% same-store sales gain in the U.S., where traffic climbed 4.3%. Overseas results were more uneven: international comparable sales expanded 2.6%, though China — the company's second-largest market — managed only 0.5% growth, as heavier discounting pulled the average check down 1.6% even as it drew 2.1% more customers through the door.
For the full fiscal year 2026, management raised its global and U.S. same-store sales target to at least 5% growth, up from the previous 3% goal. Adjusted earnings per share are now expected to be between $2.25 and $2.45, higher than the earlier range of $2.15 to $2.40.
"Our second quarter marked the turn in our turnaround as our Back to Starbucks plan drove both top and bottom line growth," CEO Brian Niccol said in a statement. CFO Cathy Smith said in a statement that "the combination of our comp growth and cost discipline" is starting to show up in margins.
GAAP operating margin expanded 180 basis points year over year to 8.7%. North America segment operating income fell 9% to $679.9 million, pressured by labor investments, product mix shifts, and inflation driven by tariffs and elevated coffee pricing. International segment operating income rose 84% to $398.6 million, lifted in part by lower depreciation costs after the company classified its China retail operations as assets held for sale ahead of a joint venture transaction with Boyu Capital.
In after-hours trading, Starbucks shares gained roughly 6%.
Niccol's Back to Starbucks turnaround strategy has included significant labor investments. The company announced a performance-based bonus program for U.S. baristas and shift supervisors that could pay eligible workers up to $1,200 per year, along with expanded tipping options and a shift to weekly paychecks for its U.S. workforce. The company said it has invested more than $500 million in additional staffing hours since the strategy launched.
