Starbucks on Thursday reported mixed quarterly results as its international cafes underperformed expectations.
However, its U.S. turnaround continues to take hold, as its home market topped expectations during the coffee giant's final quarter of fiscal 2026.
"We enter fiscal 2027 with momentum, a clear set of priorities and higher ambitions for what Starbucks can become," CEO Brian Niccol said in a video shared on the company's website.
Starbucks is ahead of schedule to meet the fiscal 2028 targets laid out at its investor day in January, he said on the company's earnings conference call.
For fiscal 2027, Starbucks is projecting adjusted earnings per share in a range of $3.15 to $3.25, above Wall Street's expectations of earnings per share of $3.14. However, its anticipated revenue decline of 1% is weaker than expected; analysts were forecasting net sales growth of 1.4%.
Starbucks is projecting North American same-store sales growth of 4% for the fiscal year.
The company's earnings and revenue outlook includes an additional week and the effects of the shift in its China business to a joint venture business model. Starbucks is also projecting slight deflation in coffee prices and slowing net new North American cafe openings, which will both weigh on its full-year revenue, according to CFO Cathy Smith.
Here's what the company reported for the quarter ended Sept. 27 compared with what Wall Street was expecting, based on a survey of analysts by LSEG:
Earnings per share: 80 cents adjusted vs. 72 cents expected
Revenue: $9.14 billion vs. $9.23 billion expected
Starbucks reported fiscal fourth-quarter net income attributable to the company of $677.2 million, or 59 cents per share, up from $133.1 million, or 12 cents per share, a year earlier.
Excluding restructuring and impairment costs and other items, the company reported earnings per share of 80 cents.
Net revenue fell 4% to $9.14 billion, reflecting the joint venture deal in China.
The company's global same-store sales increased 7.2%, fueled by growth in average ticket, and beating Wall Street estimates of 6%, according to StreetAccount. Transactions grew 1.8% in the quarter.
Starbucks' U.S. cafes reported same-store sales growth of 7.7%, topping StreetAccount estimates of a 6.5% increase.
Under Niccol's "Back to Starbucks" strategy, the company has focused on improving service, making its cafes more welcoming and sharpening its marketing. The changes have helped to win back customers.
"Starbucks brand affinity is at near record levels as our menu innovation, marketing and merchandise continue to create moments that drive culture and bring people into our coffee houses," Niccol told analysts.
The company said its North American rollout of its fall menu, which includes the iconic pumpkin spice latte, was the company's strongest ever autumn launch day. And matcha is now a $1 billion drink for Starbucks.
Outside of North America, the company's international comparable sales ticked up 0.9%, as traffic declines offset an increase to average ticket. That growth fell short of analyst estimates of a 3.2% increase, according to StreetAccount.
After its China business transitioned to a joint venture, Starbucks has shifted most of its international business to a licensed model, allowing local operators to take charge. The company is also exploring selling a majority stake in its Japan business, Reuters reported in September.
Starbucks opened 303 net new cafes during the quarter. In September, the company announced it would close about 1% of its North American footprint, or about 250 locations, as part of its turnaround.
By the end of its fiscal year, across the U.S. and Canada, the company also completed more than 1,700 cafe uplifts, meant to make its stores more welcoming to customers. The company has said locations that receive a makeover, with tweaks like increased seating and softer lighting, see higher transactions in the aftermath.
