Starbucks on Thursday reported higher quarterly profit that surpassed Wall Street projections, driven by resilient demand in its home market even as international sales lagged and overall revenue slipped.
For the fourth quarter ended Sept. 27, the Seattle-based coffee giant posted net income of $677.2 million, or 59 cents per share, up sharply from $133.1 million, or 12 cents per share, during the same period a year earlier, CNBC reported. Excluding restructuring and impairment charges, adjusted earnings reached 80 cents per share, topping analyst expectations of 71 to 72 cents.
However, net revenue fell 4 percent to $9.14 billion, slightly shy of Wall Street forecasts, CNBC and Yahoo Finance reported. The revenue decline was largely shaped by the company selling control of its Chinese retail business to Boyu Capital in a joint venture arrangement earlier this year.
Domestic momentum offsets global drag
Starbucks posted a 7.2 percent increase in global same-store sales, beating consensus estimates. The gains were propelled primarily by North American performance, where comparable-store sales jumped 7.7 percent on a combination of higher transaction volumes and roughly 5 percent growth in average spending per ticket, according to Yahoo Finance.
The company said its autumn menu debut, featuring the pumpkin spice latte, delivered its strongest single launch day on record. Chief Executive Officer Brian Niccol also announced that matcha beverages have grown into a $1 billion product line for the chain.
“We have a clear plan. We’ve been working the plan. And the plan is working,” Niccol said during the earnings presentation, asserting that his “Back to Starbucks” initiative has evolved from a recovery program into an engine for long-term expansion.
In contrast, international cafe performance fell short of expectations. Outside North America, comparable sales increased by just 0.9 percent, well below the roughly 3 percent projected by analysts surveyed by StreetAccount, as a 3 percent drop in foot traffic eroded higher spending per visit, CNBC reported.
Cafe remodels and tech investments
Niccol has spent two years trimming bloated menus, retraining staff, and remodeling cafes to speed up service and restore an inviting coffeehouse atmosphere. Starbucks completed more than 1,700 store renovations across the U.S. and Canada by the close of fiscal 2026, CNBC noted. While the company announced in September that it would close roughly 250 underperforming locations, or about 1 percent of its domestic footprint, Niccol said on the earnings call that the brand sees long-term opportunity to construct up to 5,000 additional North American stores.
Addressing future operations, Niccol highlighted upcoming investments in technology, including artificial intelligence tools to assist baristas with drive-thru ordering, digital systems that recognize arriving loyalty members, and streamlined payment options, the New York Post reported.
To support its bottom line, the company has undertaken cost cuts, including layoffs and restructuring, to help balance roughly $500 million in labor investments, according to the New York Post.
Outlook and market reaction
For fiscal 2027, Starbucks projected adjusted earnings per share between $3.15 and $3.25, topping Wall Street’s $3.14 expectation. However, management forecast a 1 percent decline in annual net revenue, missing analyst forecasts of 1.4 percent growth, CNBC reported.
Chief Financial Officer Cathy Smith said the sales forecast accounts for the altered China operating model, minor deflation in coffee commodity costs, and a more measured pace of store openings. Smith added that the company anticipates 4 percent same-store sales growth in North America in 2027, with any price adjustments remaining well below the current 3.7 percent inflation rate, according to Yahoo Finance.
Shares of Starbucks declined about 2 percent in extended trading Thursday evening following the weaker-than-anticipated sales guidance.
