$Starbucks(SBUX)$ reports fiscal third-quarter results after the market closes on July 29. Its previous quarter provided evidence that customer traffic was recovering, but the turnaround is increasing labour and store expenses before the full revenue benefit has appeared.
In the fiscal second quarter ended March 29 and reported April 28, global comparable-store sales increased 6.2%, supported by a 5.9% increase in transactions. Revenue rose 9% to $9.5 billion, while adjusted earnings reached $0.50 per share. Starbucks’ official second-quarter release provides the figures.
Management raised expected fiscal-year comparable sales growth to at least 5% and adjusted EPS guidance to $2.25–$2.45. The “Back to Starbucks” strategy focuses on shorter waiting times, simplified menus, improved stores and additional staffing.
The bullish argument is that increasing transactions represent genuine customer recovery rather than sales growth produced only through price increases. If existing staffing levels can support higher volumes, Starbucks may eventually generate operating leverage.
The margin evidence is not yet convincing. North American operating margin declined to 9.9% from 11.6%, primarily because of labour investments, product mix and inflation involving tariffs and coffee prices. The company is effectively accepting lower current profit to rebuild the customer experience.
China remains another uncertainty after Starbucks sold control of its operations there. The transaction reduces direct capital exposure, but it also changes the company’s participation in potential future growth.
Starbucks closed at $103.65 on July 27 after reaching $105.63.
SBUX Weekly Chart
Starbucks has confirmed that its fiscal third-quarter release will follow the July 29 market close. The company’s earnings announcement provides the schedule.
SBUX’s weekly chart remains in a broad multi-year range, with strong support near $72 and a descending trendline now creating major resistance around $109–$112. The stock has recovered steadily from its 2025 lows and is consolidating near $103–$105, but it has not yet confirmed a breakout, so buying calls at the current level would expose the trade to another rejection toward $96–$100.
A decisive weekly close above approximately $112, ideally followed by a successful retest, would improve the long-term structure and could open a move toward $118–$120, followed by the previous high near $125–$127. A defined-risk strategy would be a 60–90 DTE $110/$120 call debit spread entered only after breakout confirmation; traders preferring premium collection could instead wait for a pullback that holds around $98–$100 and consider a $95/$90 bull put spread. A weekly close below roughly $96 would weaken the near-term recovery and increase the risk of a deeper retracement.
The evidence leans neutral to moderately bullish. Improving traffic suggests the turnaround is working, but labour and input costs still limit profitability. The view would become more bullish if comparable transactions remain positive while North American margins stabilise; it would be invalidated by weaker traffic or another meaningful margin contraction. This is personal opinion for education and is not financial advice.
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Disclaimer: This article is for informational and educational purposes only and does not constitute financial, investment, or trading advice. The views expressed are personal opinions based on publicly available information and are subject to change without notice. Investors should conduct their own research and consider their financial situation, risk tolerance, and investment objectives before making any investment decisions. I do not guarantee the accuracy or completeness of the information presented.
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