01—Abstract
Summary
Summary of the 10-Q filed July 29, 2026. Cited figures are marked; the original filing is the authoritative source.
Starbucks Corporation reported its financial results for the fiscal third quarter ended June 28, 2026.
Total net revenues saw a slight decrease of 1.4% year-over-year to $9.3 billiona. This decline was primarily influenced by the strategic conversion of Starbucks' China retail operations to a licensed joint venture model, which reduced reported revenues but is expected to yield higher operating margins in the long term. Despite the revenue dip, global comparable store sales grew by a robust 7.9%, led by a 7.9% increase in the U.S. market, signaling underlying demand strength.
Net earnings attributable to Starbucks increased significantly to $1.05 billionb, or $0.91 per diluted share, up from $558.3 million, or $0.49 per diluted share, in the prior year's quarter. This jump was largely driven by a substantial pre-tax gain of $536.3 million from the divestiture of certain operations, specifically the China joint venture completion. The company's "Back to Starbucks" strategy continues to be a focus, with ongoing restructuring plans aimed at improving efficiency and optimizing the store portfolio.
While these efforts involve significant restructuring and impairment charges ($302.6 millionc for the quarter), they are part of a longer-term vision to revitalize the brand and drive sustainable growth. The company ended the quarter with $3.45 billion in cash and cash equivalents, maintaining a solid liquidity position.
02—Key points
Key Highlights
- Total net revenues decreased 1.4% to $9.3 billion, impacted by the strategic shift of China operations to a joint venture model.
- Global comparable store sales increased by a strong 7.9%, with the U.S. market showing significant growth of 7.9%.
- Net earnings attributable to Starbucks surged to $1.05 billion ($0.91/share) from $558.3 million ($0.49/share) due to a $536.3 million gain from divestitures.
- Operating income increased 4.8% to $980.4 million, with operating margin expanding 60 basis points to 10.5%, reflecting sales leverage and improved cost efficiencies.
- Significant restructuring and impairment charges of $302.6 million were recorded, primarily related to the "Back to Starbucks" strategy and store portfolio optimization.
- The company completed the divestiture of its China retail operations into a joint venture with Boyu Capital, retaining a 40% stake.
- Cash and cash equivalents stood at $3.45 billion, indicating healthy liquidity.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2026filed July 29, 2026Financial Statements
Q3 FY2026 against Q3 FY2025
| Line item | Q3 FY2026Q3 FY2025 | Change |
|---|---|---|
| Revenue | $9.32B$9.46B | −1.4% |
| Operating Expenses | $8.42B$8.58B | −1.8% |
| Operating Income | $980.40M$935.60M | +4.8% |
| Interest Expense | $134.60M$142.30M | −5.4% |
| Net Income | $1.05B$558.30M | +87.2% |
| EPS (Basic) | $0.92$0.49 | +87.8% |
| EPS (Diluted) | $0.91$0.49 | +85.7% |
| Shares Outstanding (Basic) | 1.14B1.14B | +0.3% |
| Shares Outstanding (Diluted) | 1.14B1.14B | +0.4% |
05—Questions
Frequently Asked Questions
What was the primary driver of the significant increase in net earnings this quarter?
The substantial increase in net earnings was primarily driven by a pre-tax gain of $536.3 million resulting from the divestiture of Starbucks' retail operations in China and their conversion into a joint venture.
How has the strategic shift in China impacted Starbucks' reported revenues?
The conversion of Starbucks' China retail operations to a licensed joint venture model resulted in a decrease in reported total net revenues by approximately $776 million for company-operated stores in the quarter. However, this strategic move is expected to lead to higher long-term operating margins for Starbucks.
What is the "Back to Starbucks" strategy and what financial impact is it having?
The "Back to Starbucks" strategy is aimed at revitalizing the brand and driving growth through initiatives like improving the customer experience, enhancing operational efficiency, and optimizing the store portfolio. This strategy has led to significant restructuring and impairment charges, totaling $302.6 million in the quarter, primarily related to store closures and transformations.
What is the company's liquidity position?
Starbucks maintained a strong liquidity position, with cash and cash equivalents totaling $3.45 billion as of June 28, 2026. The company also has access to a $3.0 billion unsecured revolving credit facility and a $3.0 billion commercial paper program, with no outstanding borrowings under these facilities at the end of the quarter.
06—Continue