Stronger customer traffic helped push Starbucks to a surprise sales beat, prompting the coffee giant to lift its 2026 outlook. The company posted fiscal Q2 revenue of $9.53 billion and adjusted EPS of $0.50, topping the $0.43 analysts had expected, while global same‑store sales rose 6.2%. Management raised its full‑year comparable‑store sales target to at least 5% and boosted adjusted EPS guidance to $2.25–$2.45.
Quarterly results that changed the outlook
Starbucks reported net sales of $9.53 billion for the quarter ended March 29, up about 9% from a year earlier. Adjusted earnings per share were $0.50, beating the $0.43 per share that analysts surveyed by LSEG had expected. Net income attributable to the company was $510.9 million, or $0.45 a share, compared with $384.2 million, or $0.34 a share, a year earlier.
Management said the quarter showed more visits to Starbucks cafés, a development CEO Brian Niccol described as a milestone in the company’s turnaround in a video posted with the results. Traffic growth was a core driver of the quarter’s better‑than‑expected performance.
Shares of Starbucks rose roughly 6% in extended trading after the results and the revised guidance were released.
Where the growth came from
Global comparable store sales, which include only locations open at least a year, climbed 6.2% in the quarter — well ahead of the roughly 4% growth analysts had been forecasting, according to StreetAccount estimates. The bulk of the improvement came from North America, where U.S. comparable store sales rose 7.1%.
U.S. traffic increased 4.3%, suggesting more customers are coming through the doors rather than simply spending more per visit. That lift in visits helped drive the revenue beat and underpinned the decision to raise full‑year forecasts.
International sales were a smaller contributor, with international same‑store sales up 2.6% overall. The split — strong U.S. demand and softer international growth — shaped management’s messaging and its higher confidence for full‑year results.
China: more visits but lower spend
China, Starbucks' second‑largest market, lagged the overall business with only 0.5% same‑store sales growth for the quarter. The company said traffic in China rose 2.1%, but average spend per visit fell 1.6% as Starbucks used more promotions to drive visits.
Those dynamics — higher footfall but lower ticket size — mean the company is trading some margin for volume in a market that matters to its global expansion plans. Management signalled it is prepared to use discounts to bring customers back, even as that approach trims average spend.
Guidance tightened and nudged higher
Following the quarter, Starbucks raised its full‑year targets and narrowed guidance ranges. Key points:
- Global and U.S. comparable store sales now expected to increase by at least 5% for fiscal 2026 (up from a prior projection of at least 3%).
- Adjusted EPS guidance lifted to a range of $2.25 to $2.45, from an earlier $2.15 to $2.40 range.
The tighter and higher guidance signals management's view that the operational improvements driving the quarter — notably traffic gains in North America — have momentum and could persist across additional quarters.
Costs, margins and the trade‑off in China
The company excluded restructuring, impairment costs and other items when reporting adjusted EPS; that adjusted figure beat expectations and suggests Starbucks' core store business is producing stronger returns as traffic improves and promotional mixes evolve.
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Shares rose about 6% in after‑hours trading after Starbucks raised its same‑store sales and adjusted EPS guidance for fiscal 2026.
This article was created with AI assistance.
