What drove the top-line growth in fiscal Q2 2026?

Growth was primarily traffic-driven. Global comparable transactions rose 3.8%, and average ticket rose 2.3%. North America comps rose 7.1%, with transactions up 4.4% and ticket up 2.6%. Net new store growth was modest, with 11 net new stores in the quarter, so most of the revenue gain came from comparable sales and licensed store and Channel Development growth.

Why did North America margins decline even though sales grew?

North America operating margin fell 170 bps to 9.9%. Management cited labor investments tied to the Back to Starbucks plan, a shift in product mix, and inflation from tariffs and elevated coffee prices. Sales leverage partially offset these pressures, but not enough to protect the prior-year margin.

How should investors view the International segment's profit jump?

The 84% increase in International operating income is partly an accounting effect. After China retail assets were classified as held for sale, the company stopped recording related depreciation and amortization, which lowered costs. This benefit is not a pure operating improvement, and the China joint venture will change how these results are reported starting in the second half of fiscal 2026.

Does the current dividend look covered by earnings?

Not on a quarterly basis. The declared dividend of $0.62 per share exceeded both Q2 GAAP EPS ($0.45) and non-GAAP EPS ($0.50). Operating cash flow was $1.96 billion for the first half, and dividends paid were $1.41 billion, which is covered by cash flow but leaves little margin after capital expenditures. Investors should monitor payout sustainability against the cash flow trend and the China transaction proceeds.

What should investors expect from the China joint venture and fiscal 2026 guidance?

The Boyu Capital joint venture closed in April, and its impact will begin in Q3 fiscal 2026. Management expects a material gain from the transaction, which is excluded from the projected GAAP EPS range of $1.73 to $1.93. The non-GAAP EPS guidance of $2.25 to $2.45 excludes that gain and the related tax effects, so GAAP results in the second half may differ meaningfully from the non-GAAP outlook.

SBUX 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed April 28, 2026. Cited figures are marked; the original filing is the authoritative source.

Starbucks' fiscal Q2 2026 (quarter ended March 29, 2026) marked what management called the turn in its Back to Starbucks turnaround.

Global comparable store sales rose 6.2%, driven mainly by a 3.8% increase in comparable transactions. Consolidated net revenues grew 8.8% to $9.5 billion^a (8.1% in constant currency). GAAP diluted EPS was $0.45, up 32%, and non-GAAP EPS was $0.50, up 22%.

GAAP operating margin expanded 180 basis points to 8.7%, helped by lower store operating and D&A costs after China retail assets were reclassified as held for sale. Management raised its fiscal 2026 guidance for comparable store sales (now 5% or greater) and non-GAAP EPS ($2.25 to $2.45^b). The quality of the improvement is mixed.

North America, the core profit engine, grew revenue 7% and comps 7.1%, but operating income fell 9% and margin contracted 170 basis points to 9.9%, reflecting labor investments, product mix, and tariff and coffee cost inflation. International operating income rose 84%, but much of that reflects the accounting effect of ceasing depreciation on the China assets held for sale rather than purely operating gains. Balance sheet and cash flow data also warrant attention: cash fell to $1.5 billion^c from $3.2 billion, operating cash flow declined to $2.0 billion from $2.4 billion, and the shareholders' deficit widened to $8.5 billion.

The China joint venture with Boyu Capital closed in April, and its impact begins in Q3, when a material gain is expected but excluded from guidance. For investors, the key takeaways are the traffic-led top-line recovery and the sustainability of margin expansion, particularly in North America. The raised guidance supports the turnaround narrative, but the China transaction and its accounting effects will complicate comparisons in the second half of fiscal 2026.

02—Key points

Key Highlights

Global comparable store sales rose 6.2%, led by a 3.8% increase in comparable transactions and a 2.3% increase in average ticket; U.S. comps rose 7.1%.
Consolidated net revenues rose 8.8% to $9.5 billion, and GAAP operating margin expanded 180 bps to 8.7% (non-GAAP 9.4%, up 120 bps).
GAAP EPS of $0.45 rose 32%, and non-GAAP EPS of $0.50 rose 22%; the effective tax rate increased to 29.8% from 23.5%.
North America operating income fell 9% to $679.9 million, and operating margin contracted 170 bps to 9.9% due to labor investments, product mix, and tariff and coffee inflation.
International operating margin reached 19.4% (up 780 bps), aided by ceasing D&A on China retail assets classified as held for sale.
Fiscal 2026 guidance raised: comparable store sales growth of 5% or greater and non-GAAP EPS of $2.25 to $2.45, with consolidated revenue roughly flat year over year.
The Boyu Capital joint venture for China retail closed in April (Boyu 60%, Starbucks 40%); its impact begins in Q3, and a material gain is excluded from projections.

03—Questions

Frequently Asked Questions

What drove the top-line growth in fiscal Q2 2026?
Growth was primarily traffic-driven. Global comparable transactions rose 3.8%, and average ticket rose 2.3%. North America comps rose 7.1%, with transactions up 4.4% and ticket up 2.6%. Net new store growth was modest, with 11 net new stores in the quarter, so most of the revenue gain came from comparable sales and licensed store and Channel Development growth.
Why did North America margins decline even though sales grew?
North America operating margin fell 170 bps to 9.9%. Management cited labor investments tied to the Back to Starbucks plan, a shift in product mix, and inflation from tariffs and elevated coffee prices. Sales leverage partially offset these pressures, but not enough to protect the prior-year margin.
How should investors view the International segment's profit jump?
The 84% increase in International operating income is partly an accounting effect. After China retail assets were classified as held for sale, the company stopped recording related depreciation and amortization, which lowered costs. This benefit is not a pure operating improvement, and the China joint venture will change how these results are reported starting in the second half of fiscal 2026.
Does the current dividend look covered by earnings?
Not on a quarterly basis. The declared dividend of $0.62 per share exceeded both Q2 GAAP EPS ($0.45) and non-GAAP EPS ($0.50). Operating cash flow was $1.96 billion for the first half, and dividends paid were $1.41 billion, which is covered by cash flow but leaves little margin after capital expenditures. Investors should monitor payout sustainability against the cash flow trend and the China transaction proceeds.
What should investors expect from the China joint venture and fiscal 2026 guidance?
The Boyu Capital joint venture closed in April, and its impact will begin in Q3 fiscal 2026. Management expects a material gain from the transaction, which is excluded from the projected GAAP EPS range of $1.73 to $1.93. The non-GAAP EPS guidance of $2.25 to $2.45 excludes that gain and the related tax effects, so GAAP results in the second half may differ meaningfully from the non-GAAP outlook.

04—Continue

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