Summary
Starbucks Corporation reported its first quarter fiscal year 2026 results, with total net revenues increasing 5.5% year-over-year to $9.9 billion. This growth was primarily driven by a 5.2% increase in company-operated store revenues, fueled by a 4% rise in comparable store sales in the U.S. and a 5% increase internationally. However, the company experienced a significant decline in net earnings attributable to Starbucks, which fell to $293.3 million from $780.8 million in the prior year's quarter, resulting in diluted earnings per share of $0.26, down from $0.69. The decrease in profitability was largely influenced by a substantial increase in income tax expense, significantly impacted by changes in indefinite reinvestment assertions related to the planned joint venture in China. Additionally, operating income saw a contraction due to increased product and distribution costs, elevated coffee pricing and tariffs, and labor investments supporting the 'Back to Starbucks' strategy. Despite the earnings drop, the company continues to execute its 'Back to Starbucks' initiatives, including store closures and organizational restructuring, and is advancing its strategic partnership in China.
Financial Highlights
51 data points| Revenue | $9.92B |
| Operating Expenses | $9.08B |
| Operating Income | $890.80M |
| Interest Expense | $139.00M |
| Net Income | $293.30M |
| EPS (Basic) | $0.26 |
| EPS (Diluted) | $0.26 |
| Shares Outstanding (Basic) | 1.14B |
| Shares Outstanding (Diluted) | 1.14B |
Key Highlights
- 1Consolidated net revenues increased by 5.5% to $9.9 billion, driven by company-operated stores and international growth.
- 2Global comparable store sales increased by 4%, with a 4% rise in the U.S. and a 5% rise internationally.
- 3Net earnings attributable to Starbucks significantly decreased by 62.4% to $293.3 million, leading to diluted EPS of $0.26.
- 4Operating margin contracted by 290 basis points to 9.0% due to higher costs and strategic investments.
- 5Significant increase in income tax expense, primarily due to changes in indefinite reinvestment assertions related to the China joint venture, impacting reported earnings.
- 6Starbucks continues to execute its 'Back to Starbucks' strategy, including store closures and restructuring efforts, with $88.1 million recorded in restructuring and impairment charges.
- 7The company announced an agreement to form a joint venture for Starbucks retail operations in China, classifying the related assets and liabilities as held for sale.