Dubai – Qahwa World
Starbucks shares climbed in early trading after the company reported an increase in customer visits for the first time in two years, signaling progress in its ongoing turnaround effort—even as profits came in below expectations.
The coffee chain said transaction growth returned during its fiscal first quarter, helping lift same-store sales. Management credited recent operational and service-focused changes for bringing more customers back into stores.
Chief Executive Officer Brian Niccol said the early results suggest the company’s “Back to Starbucks” strategy is gaining traction sooner than expected, noting stronger sales momentum driven by increased visit frequency.
Although Starbucks fell short of Wall Street’s earnings forecast, revenue exceeded expectations. Adjusted earnings reached 56 cents per share, compared with analyst estimates of 59 cents, while revenue rose 6% year over year to $9.92 billion.
Net income declined sharply from the prior year, pressured by higher coffee costs, tariffs, and expenses tied to restructuring and transformation initiatives. Excluding one-time items, profitability remained more stable.
Global same-store sales grew 4%, supported by a 3% rise in customer traffic—the first such increase since 2022. Both loyalty members and non-members contributed to the improvement, marking a notable shift in consumer behavior.
In the U.S., same-store sales also increased 4%, helped by strong demand for seasonal beverages and merchandise during the holiday period. Starbucks’ international business performed even better, posting a 5% rise in comparable sales.
China, the company’s second-largest market, delivered 7% same-store sales growth. During the quarter, Starbucks announced plans to form a joint venture with Boyu Capital to manage its China operations, a move aimed at expanding its presence and accelerating long-term growth in the region.
Starbucks ended the quarter with 128 net new stores and plans to open between 600 and 650 additional locations globally in fiscal 2026, following the closure of hundreds of underperforming U.S. stores last year.
Looking ahead, the company forecast adjusted earnings per share of $2.15 to $2.40 for fiscal 2026 and expects global comparable sales to grow by at least 3%. More details on long-term strategy and financial targets are expected to be shared at an investor event in New York.
