Starbucks Beats Q3 Estimates and Raises 2026 Outlook Amid Turnaround Momentum

Key points

• Starbucks reported adjusted EPS of 85 cents, surpassing the 66 cents expected by analysts, and revenue of $9.32 billion, beating the $9.16 billion consensus.
• The company raised its full-year fiscal 2026 adjusted EPS outlook to a range of $2.55–$2.65, up from the previous $2.25–$2.45 estimate.
• Global same-store sales grew 7.9% in the quarter, exceeding the 6% estimate, with U.S. same-store sales rising 8.1% and international sales up 5.7%.
• Total net sales declined 1% to $9.3 billion, primarily due to the sale of a controlling stake in the China business to Boyu Capital, which was announced in November.
• CEO Brian Niccol stated that the quarter marked the point where the company's turnaround momentum became 'truly measurable,' citing increases in both transaction volume and average check size.

Background

This report follows a period of strategic restructuring for Starbucks, including the November announcement of a joint venture with Boyu Capital to manage its China operations. The current results reflect the ongoing leadership of CEO Brian Niccol, who has been driving a turnaround strategy focused on operational efficiency and customer engagement. The strong performance contrasts with earlier fiscal year challenges, as the company now projects sustained growth in both its home market and international segments for the remainder of fiscal 2026.

Why it matters

The results signal a successful stabilization of Starbucks' core business, with rising same-store sales indicating that customers are returning to cafes and spending more per visit. The upward revision in full-year guidance suggests confidence in the company's ability to sustain growth despite the loss of direct revenue from China. For investors, the beat in earnings and revenue, combined with a 7% stock jump, validates the current management's turnaround strategy and reduces uncertainty regarding the company's near-term profitability.

What to watch

Investors will monitor whether the momentum in same-store sales continues into the fourth quarter, particularly as the company fully integrates the new China joint venture structure. The market will also watch for any further adjustments to the full-year outlook as the company navigates the remainder of fiscal 2026. Additionally, the success of the turnaround strategy may influence future strategic decisions regarding international expansion and operational efficiency in the U.S. market.