Starbucks U.S. Same-Store Sales Jump 7.7% While Revenue and International Sales Miss Estimates

Starbucks reported fiscal fourth-quarter results on Thursday, Oct. 29, and the picture was split. The U.S. business ran well ahead of expectations. Revenue and the international business did not.

For the quarter ended Sept. 27, adjusted earnings came in at 80 cents per share. Analysts surveyed by LSEG expected about 72 cents. Net revenue fell 4% to $9.14 billion, short of the $9.23 billion forecast. Starbucks attributes the decline to moving its China retail operations into a licensed joint venture.

U.S. cafes carry the quarter

U.S. same-store sales rose 7.7%. StreetAccount's estimate was 6.5%. U.S. transactions grew 2.4% and average ticket rose 5.2%, so more people came in and each spent more.

Global same-store sales rose 7.2% against an expected 6%. Global transactions were up 1.8%.

CEO Brian Niccol said the company's fall menu launch, which includes the pumpkin spice latte, was its strongest autumn launch day ever. He also said matcha is now a $1 billion drink for Starbucks.

"Back to Starbucks started as our turnaround plan. Now, it's our growth plan," Niccol said in a statement. He said Starbucks is ahead of schedule on the fiscal 2028 targets it set at its January investor day.

The non-GAAP operating margin widened 460 basis points to 14.0%. Net income attributable to Starbucks was $677.2 million, or 59 cents per share, up from $133.1 million, or 12 cents, a year earlier.

International falls short

International same-store sales rose only 0.9%. Analysts had expected 3.2%. Transactions fell 2.8%, and a 3.7% rise in average ticket was not enough to make up the difference.

Niccol's turnaround is working on American soil. Overseas, fewer customers are walking in.

Starbucks ended the quarter with 41,607 coffeehouses after a net 303 additions. In September the company announced it would close about 250 company-operated cafes in North America.

Niccol said on the earnings call that he sees room to build around 5,000 additional coffeehouses in North America over time.

Full year and the fiscal 2027 outlook

For fiscal 2026, revenue rose 2% to $37.9 billion, slightly under the roughly $38 billion Wall Street expected. Adjusted earnings per share rose 28% to $2.72, ahead of the $2.62 estimate. U.S. same-store sales grew 6.5% for the year.

For fiscal 2027, Starbucks guided to adjusted earnings of $3.15 to $3.25 per share, above the $3.14 analysts expected. Revenue is a different matter. The company expects consolidated net revenue to fall about 1%. Analysts had forecast growth of 1.4%.

Chief Financial Officer Cathy Smith pointed to the China joint venture, slight deflation in coffee prices and slower net new North American cafe openings as drags on revenue. The outlook also includes an extra week, since fiscal 2027 is a 53-week year.

Other guidance numbers:

• North American same-store sales growth of about 4%
• A non-GAAP operating margin of 13.5% to 14.0%
• About 1,200 net new coffeehouses globally, led by International

The company's own numbers show a profit forecast that clears the Street and a revenue forecast that does not.

Chipotle rumor addressed

Earlier this month, reports surfaced that Starbucks was in talks to take over Chipotle. A Starbucks spokesperson told Yahoo Finance at the time: "As a matter of policy, we don't comment on rumors and speculation, but we want to be clear we are not buying Chipotle."

Shares and cash returns

Starbucks shares closed Thursday at $105.51, up 2.24%, before the report came out. They fell nearly 2% in extended trading afterward. U.S. regular trading does not open again until 9:30 a.m. ET today, Oct. 30.

Smith said Starbucks plans to resume share repurchases in fiscal 2027. The board declared a quarterly dividend of 63 cents per share, payable Nov. 27 to shareholders of record on Nov. 13.

The international business is the open question. Fiscal 2027 guidance calls for the roughly 1,200 net new cafes to be led by International. That is the segment where transactions fell 2.8% last quarter.