Starbucks released its fiscal 2026 third-quarter earnings report on July 30, showcasing a notable pattern of revenue contraction paired with a sharp profit surge. Revenue for the period reached $93.2 billion, a slight 1.4% decline year-over-year, while net profit attributable to the company soared to $1.045 billion, a massive 87.2% increase. The revenue dip was largely due to the accounting impact of its China business moving off the balance sheet, whereas the significant profit improvement confirmed the substantive success of the "Back to Starbucks" strategy.
Global same-store sales grew by 7.9%, marking the fourth consecutive quarter of positive growth. More importantly, the growth structure was encouraging: customer traffic increased 4.2%, and average ticket size rose 3.5%. This indicates that the uptick is not solely reliant on price hikes, but rather that customer traffic is meaningfully returning, with store visit frequency and consumer spending willingness both recovering. The North American market served as the primary growth engine this quarter. North American segment net revenue rose 6.8% to $7.40 billion, with same-store sales up 8.1%. Operating income in the region grew 9.8% to $1.01 billion, and the operating margin expanded by 30 basis points to 13.6%.
The restructuring of Starbucks China operations marks a pivotal strategic shift. This quarter was the first report following the transition of Starbucks China retail business into a joint venture, where Starbucks holds a 40% stake and Boyu Capital holds 60%. The business has shifted from direct consolidation to franchise accounting. Due to this accounting change, international segment net revenue fell 34.2% to $1.32 billion, but the international segment operating margin improved substantially by 550 basis points to 19.1%. Starbucks' CFO stated that the new model is expected to convert more than half of its revenue into operating profit.
Buoyed by the strong quarterly performance, Starbucks raised its fiscal 2026 full-year guidance: U.S. same-store sales growth is now expected to be slightly above 6%, with global growth near 6%. Non-GAAP earnings per share have been lifted from $2.25-$2.45 to $2.55-$2.65, and the non-GAAP operating margin is anticipated to exceed 11%.
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