Starbucks (NASDAQ:SBUX) Posts Earnings Results, Beats Estimates By $0.08 EPS

Starbucks (NASDAQ:SBUX) issued its earnings results on Thursday. The coffee company reported $0.80 EPS for the quarter, beating analysts’ consensus estimates of $0.72 by $0.08, FiscalAI reports. Starbucks had a negative return on equity of 34.10% and a net margin of 5.17%. The business had revenue of $9.14 billion during the quarter, compared to analyst estimates of $9.22 billion.

Here are the key takeaways from Starbucks’ conference call:

• Fiscal 2026 results exceeded expectations: Q4 global comparable sales rose 7.2%, U.S. comparable sales increased 7.7%, operating margin expanded 450 basis points to 14%, and EPS grew approximately 54% to $0.80.
• Starbucks expects continued earnings recovery in fiscal 2027, guiding to approximately 4% North America comparable-sales growth, 13.5%–14% operating margin, and EPS of $3.15–$3.25. Management said it is ahead of schedule toward its fiscal 2028 framework, supported by sales leverage and ongoing savings from its $2 billion cost program.
• Fiscal 2027 consolidated revenue is expected to decline approximately 1%, primarily because of the transition of Starbucks China’s retail operations to a licensed joint venture, along with lower channel-development revenue and fewer North American company-operated openings.
• Management highlighted several growth opportunities, including more than 2,000 North American coffeehouse uplifts, integrated delivery in the Starbucks app, personalized digital ordering, afternoon menu and beverage platforms, and approximately 1,200 net new global coffeehouses in fiscal 2027, mainly internationally.
• Starbucks plans to return capital to shareholders through its 16th consecutive annual dividend increase to $0.63 per share and approximately $1 billion in fiscal 2027 share repurchases, while maintaining an investment-grade balance sheet.

Starbucks Stock Performance

SBUX traded up $2.31 during mid-day trading on Thursday, reaching $105.51. 11,059,307 shares of the stock were exchanged, compared to its average volume of 8,115,618. Starbucks has a 1 year low of $77.99 and a 1 year high of $110.51. The stock has a market capitalization of $120.28 billion, a PE ratio of 60.64, a price-to-earnings-growth ratio of 1.44 and a beta of 0.98. The company has a 50 day moving average price of $99.25 and a two-hundred day moving average price of $99.55.

Starbucks Increases Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Friday, November 27th. Shareholders of record on Friday, November 13th will be paid a dividend of $0.63 per share. This is a boost from Starbucks’s previous quarterly dividend of $0.62. The ex-dividend date is Friday, November 13th. This represents a $2.52 annualized dividend and a yield of 2.4%. Starbucks’s dividend payout ratio (DPR) is 144.83%.

Wall Street Analysts Forecast Growth

A number of equities analysts recently issued reports on the company. Piper Sandler increased their target price on Starbucks from $110.00 to $120.00 and gave the stock an “overweight” rating in a report on Thursday, July 30th. Wells Fargo & Company lowered their price objective on shares of Starbucks from $125.00 to $120.00 and set an “overweight” rating on the stock in a report on Wednesday, October 21st. Evercore restated an “outperform” rating and set a $120.00 price objective (up from $115.00) on shares of Starbucks in a report on Thursday, July 30th. Guggenheim began coverage on shares of Starbucks in a research note on Monday, August 3rd. They issued a “buy” rating on the stock. Finally, Gordon Haskett lifted their price objective on shares of Starbucks from $110.00 to $118.00 and gave the company a “hold” rating in a report on Thursday, July 30th. Twenty-four equities research analysts have rated the stock with a Buy rating, twelve have issued a Hold rating and four have assigned a Sell rating to the company. According to data from MarketBeat.com, Starbucks has a consensus rating of “Moderate Buy” and an average target price of $110.14.

Starbucks News Roundup

Here are the key news stories impacting Starbucks this week:

• Positive Sentiment: U.S. comparable sales rose 7.7%. The domestic business outperformed expectations, supported by higher average customer spending and an improvement in transactions. This suggests the “Back to Starbucks” strategy is gaining traction in the company’s most important market. Starbucks international business disappoints but U.S. stores outperform
• Positive Sentiment: Adjusted earnings beat expectations. Starbucks reported earnings of $0.80 per share versus the consensus estimate of $0.72, while the company’s comparable-sales performance also exceeded Wall Street expectations. The improvement in margins was another positive signal for the multiyear turnaround. Starbucks beats quarterly sales and profit expectations
• Neutral Sentiment: Revenue was below expectations. Quarterly revenue of $9.14 billion missed the $9.22 billion consensus estimate, despite stronger comparable sales. The shortfall highlights that sales gains are not yet translating into broad-based growth across the business. Starbucks earnings and revenue results
• Negative Sentiment: International comparable sales disappointed. Results outside the U.S. fell short of expectations, offsetting some of the strength in domestic stores and raising concerns about the recovery’s global breadth. Starbucks international business disappoints
• Negative Sentiment: Traffic growth remains a concern. Analysts noted that larger average checks accounted for much of the U.S. comparable-sales increase, while visit growth slowed. Management also appears to anticipate more measured sales growth in fiscal 2027, making the stock’s relatively high valuation harder to justify if margin gains moderate. Starbucks margins jump as store visits slow

Insider Activity at Starbucks

In related news, CEO Brady Brewer sold 588 shares of the firm’s stock in a transaction dated Tuesday, October 20th. The shares were sold at an average price of $100.00, for a total transaction of $58,800.00. Following the transaction, the chief executive officer directly owned 70,920 shares of the company’s stock, valued at $7,092,000. This trade represents a 0.82% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 6,687 shares of company stock valued at $685,935 in the last three months. Corporate insiders own 0.03% of the company’s stock.

About Starbucks

Starbucks Corporation is a global specialty coffee company headquartered in Seattle, Washington. Founded in 1971, the company operates and licenses coffeehouses under the Starbucks brand, serving brewed coffee, espresso beverages, teas, cold drinks, food, and other ready-to-consume products.

In addition to its company-operated and licensed stores, Starbucks sells packaged coffee, tea, and single-serve products through grocery retailers, convenience stores, and other distribution channels.