10-QPeriod: Q2 FY2026

STARBUCKS CORP Quarterly Report for Q2 Ended Mar 29, 2026

Filed April 28, 2026For Securities:SBUX

Summary

Starbucks Corporation (SBUX) reported its second-quarter fiscal year 2026 results, demonstrating revenue growth driven by increased comparable store sales, particularly in the U.S. The company's 'Back to Starbucks' strategy continues to influence operational changes, including store closures and organizational restructuring, which are expected to improve efficiency and long-term profitability. While net earnings saw a significant decrease year-over-year, this was largely impacted by a substantial discrete tax expense related to the change in indefinite reinvestment assertions for its China operations, following the closing of the joint venture transaction. The company maintained a strong liquidity position and ended the period with robust available credit facilities.

Financial Highlights

52 data points
Beta

Revenue

$9.53B

Net Income

$510.90M

5.4% Net Margin

EPS (Diluted)

$0.45

Total Assets

$30.56B

Cash & Equivalents

$1.53B

Free Cash Flow

$91.80M

Financial Statements
Beta
Revenue$9.53B
Operating Expenses$8.75B
Operating Income$828.10M
Interest Expense$137.00M
Net Income$510.90M
EPS (Basic)$0.45
EPS (Diluted)$0.45
Shares Outstanding (Basic)1.14B
Shares Outstanding (Diluted)1.14B

Key Highlights

  • 1Consolidated net revenues increased by 8.8% to $9.5 billion for the quarter ended March 29, 2026, compared to $8.8 billion in the prior year's quarter.
  • 2Global comparable store sales increased by 6.2% for the first two quarters of fiscal 2026, with the U.S. market showing a 7.1% increase.
  • 3Operating income for the second quarter of fiscal 2026 increased to $828.1 million, a 37.8% increase from $601.0 million in the prior year, resulting in an expanded operating margin of 8.7%.
  • 4The company reported a net earnings attributable to Starbucks of $510.9 million for the quarter, a decrease from $384.2 million in the prior year, impacted by a significant increase in income tax expense.
  • 5Restructuring and impairment charges decreased significantly to $25.1 million for the quarter, down from $116.2 million in the prior year, reflecting the ongoing 'Back to Starbucks' initiative.
  • 6The divestiture of 60% of Starbucks' China retail operations to Boyu Capital closed on March 30, 2026, for $3.1 billion, impacting current and future financial reporting.
  • 7The company's cash position decreased to $1.5 billion from $3.2 billion at the prior year-end, while maintaining substantial liquidity through available credit facilities.

Frequently Asked Questions

The primary driver of the revenue increase was higher revenues from company-operated stores, fueled by a 6.2% increase in comparable store sales, and a significant increase in 'Other' revenues, largely attributable to the Global Coffee Alliance.

The decrease in net earnings was primarily due to a substantial increase in income tax expense. This was largely driven by a $273 million discrete impact from changes in indefinite reinvestment assertions related to classifying Starbucks' China retail operations as held for sale, in preparation for the joint venture closing.

The closing of the joint venture with Boyu Capital, where Starbucks retained a 40% interest, marks a strategic shift in China from a company-operated model to a licensed one. This transition is expected to lead to lower revenue but higher operating margins for Starbucks beginning in the third quarter of fiscal 2026. The transaction also provided $3.1 billion in proceeds, which the company plans to use for debt reduction and strengthening its balance sheet.

The 'Back to Starbucks' strategy is evident in continued store closures for underperforming locations, organizational restructuring to improve efficiency, and increased investment in labor to enhance the customer and partner experience. These initiatives are contributing to revenue growth through improved comparable store sales and an expansion in operating margin, although they also involve significant restructuring costs which are decreasing year-over-year.