Starbucks stock is rising as the coffee chain’s traffic increases for the first time in two years
Key Points:
Starbucks missed fiscal first-quarter earnings projections, but reported that transactions increased for the first time in two years.
Same-store sales have risen as CEO Brian Niccol’s rescue strategy takes root.
Starbucks is anticipated to disclose long-term financial ambitions during an investor day in New York City on Thursday.
Starbucks posted mixed quarterly results on Wednesday, as the company’s recovery drives traffic growth for the first time in two years while weighing on the bottom line.
“Our Q1 results demonstrate our ‘Back to Starbucks’ strategy is working, and we believe we’re ahead of schedule,” CEO Brian Niccol said in a statement.
“It’s great to see the sales momentum driven by more customers choosing Starbucks more often, and this is just the beginning.”
The corporation also provided its first financial projection since halting the prediction in October 2024.
According to LSEG, Starbucks expects adjusted profits per share in fiscal 2026 to be between $2.15 and $2.40, which is lower than Wall Street’s expectation of $2.35 per share.
In addition, the company expects at least 3% growth in same-store sales in the United States and globally.
In premarket trade, shares soared by more than 8%.
Here’s how the firm reported for the quarter ending December 28 compared to what Wall Street expected, according to an LSEG analyst survey:
Earnings per share: 56 cents adjusted, vs 59 cents projected.
Revenue: $9.92 billion, compared to $9.67 billion predicted.
Starbucks announced fiscal first-quarter net income of $293.3 million, or 26 cents per share, a decrease from $780.8 million, or 69 cents per share, the previous year.
In addition to turnaround expenses, rising coffee prices and tariffs weighed on the company’s margins this quarter.
Starbucks earned 56 cents per share, excluding restructuring costs, impairment charges, and other items.
Net sales increased 6% to $9.92 billion, driven by the company’s second consecutive quarter of same-store sales growth.
Global same-store sales grew 4%, exceeding StreetAccount’s projection of 2.3%. Traffic increased by 3%, marking the company’s first increase in transactions in two years.
Same-store sales in the United States increased 4%, boosted by demand for its holiday products, including as the viral “Bearista” cup and classic menu items like the peppermint mocha.
In November, Niccol stated that the holiday menu debut was the finest day ever for the company’s North American operations.
Outside the United States, Starbucks’ foreign same-store sales climbed by 5%.
During the quarter, the company announced plans to form a joint venture with Boyu Capital to manage its operations in China.
The purchase is expected to completion in the second quarter of fiscal 2026, subject to regulatory approval.
Starbucks’ fiscal 2026 prediction implies that it will continue to operate Starbucks China retail outlets in the second half of the fiscal year.
The company also established 128 net new locations during the quarter.
In fiscal year 2026, Starbucks intends to open 600 to 650 net new company-owned and licensed cafes.
The development comes after the corporation closed over 400 stores in the United States last year.
Investors expect to learn more about Niccol’s approach on Thursday at an investor day in New York City.
Executives will also disclose the company’s new long-term financial ambitions.