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    SBUX
    Earnings call· Mar 2026(Q2 FY26)

    STARBUCKS Q2 FY26 earnings call SBUX

    Apr 28, 2026 Source

    Executive summary

    Starbucks Q2 FY26 — Turnaround Progress with Top and Bottom Line Growth

    Starbucks delivered its first top and bottom line growth in over two years, signaling a turn in its turnaround strategy. Strong operational execution, menu innovation, and a revamped rewards program drove robust global comparable sales, despite ongoing macro uncertainties and cost pressures in North America. The company is focused on sustaining this momentum and achieving repeatable, profitable growth.

    Highlights

    5

    • Consolidated company revenue was $9.5 billion, up 8% year-over-year.

    • Global comparable store sales grew 6.2%, driven by strong performance in North America and International.

    • Consolidated operating margin improved to 9.4%, up 110 basis points.

    • Earnings per share grew 22% year-over-year to $0.50.

    • U.S. 90-day active Starbucks Rewards membership reached a record 35.6 million, up 4% year-over-year.

    Concerns

    4

    • North America operating margin contracted approximately 170 basis points to 10.2%.

    • North America margins were impacted by roughly 190 basis points of product and distribution cost increases.

    • Inflation largely related to tariffs and elevated coffee prices impacted North America margins.

    • The current macro environment brings heightened uncertainty to the operating landscape and consumer behavior.

    Guidance & targets

    11
    CategoryTargetConfidence
    Global comparable store sales growth
    5% or better
    high materiality
    High
    Earnings per share (EPS)
    $2.25 to $2.45
    high materiality
    High
    Consolidated net revenues
    roughly flat year-over-year
    medium materiality
    Medium
    Consolidated operating margins
    slight year-over-year growth
    medium materiality
    Medium
    Net new coffeehouses
    approximately 600 to 650
    medium materiality
    High
    International net new coffeehouses
    450 to 500
    medium materiality
    High
    U.S. company-operated net new coffeehouses
    150 to 175
    medium materiality
    High
    China-related revenues (post-JV)
    less than 20% of what we would have previously reported
    high materiality
    High
    $2 billion cost savings plan
    on track
    high materiality
    High
    Consolidated G&A dollars
    run below fiscal 2023 levels
    medium materiality
    High
    FY28 EPS targets
    not changing at this time
    high materiality
    Medium

    Segment performance

    5
    SegmentRevenueYoYQoQMargin
    Consolidated
    First time in more than 2 years to deliver growth on both top and bottom line. Operating margin improved by 110 basis points.
    Global comparable store sales: 6.2%
    		$9.5 billion8%—9.4%
    North America
    Led comp performance, with U.S. company-operated business growing transactions across all dayparts. Operating margin contracted approximately 170 basis points due to product/distribution cost increases and legal accruals.
    Comparable store sales: 7.1%Transactions: up more than 4%Average ticket: grew nearly 3%
    		$6.9 billion6%—10.2%
    International
    Momentum built globally, with all top 10 international markets posting positive comps for the first time in 9 quarters. Operating margin grew by approximately 790 basis points, with half driven by held-for-sale accounting related to Starbucks China.
    Comparable store sales: 2.6%Transactions: up over 2%
    		$2.1 billionnearly 8%—20.3%
    Starbucks China
    Delivered transaction-led comp growth for the fourth consecutive quarter. On a 2-year basis, comps were stable sequentially versus Q1.
    Comparable store sales: 50 basis pointsTransaction growth: more than 2%
    		————
    Channel Development
    Net revenues grew primarily due to higher revenues from the Global Coffee Alliance.
    		—38%——

    Operational metrics

    25
    EPS
    $0.50up approximately 22% year-over-year
    Q2 FY26

    First quarter of EPS growth in more than 2 years.

    Global store count
    41,12911 net new coffeehouses in the quarter
    as of March 29

    Total Starbucks stores in global portfolio.

    U.S. 90-day active Starbucks Rewards membership
    35.6 millionup 4% year-over-year
    Q2 FY26

    Reached a record high, with steady member growth from Q1 to Q2, a positive shift from prior year seasonal sequential declines.

    North America store count
    18,38525 net new coffeehouses
    end of Q2

    Includes 44 net new company-operated openings and 19 net licensed store closures.

    International store count
    22,744down 14 net coffeehouses from Q1
    end of Q2

    Includes impact of 55 store closures as part of last September's portfolio decisions.

    International margin expansion from held-for-sale accounting
    $118 million
    Q2 FY26

    Approximately half of International margin expansion was driven by this temporary accounting dynamic, which concluded at the start of Q3.

    North America operating margin contraction drivers
    190 basis points
    Q2 FY26

    Impacted by product and distribution cost increases as a percentage of revenues and greater-than-anticipated legal accruals.

    Effective tax rate
    27.1%
    Q2 FY26

    Primarily due to taxes accrued in advance of the planned sale of Starbucks China's retail business, higher pretax earnings, and related permanent/discrete tax items.

    China transaction value
    more than $13 billion
    post Q2 close

    Anticipated overall value to Starbucks, including the net present value of licensing economics.

    China transaction gross cash proceeds
    approximately $3.1 billion
    post Q2 close

    Received before taxes from the Boyu Capital transaction.

    Debt repayment
    $1 billion
    February

    Repaid February maturities prior to the China transaction close.

    Coffeehouse uplifts completed
    300+
    Q2 FY26

    Completed on budget and with 0 closure days, driving positive customer feedback.

    Coffeehouse uplifts target
    1,000+
    by fiscal year-end

    Targeted for top 20 markets, accelerating this work over the next 2 quarters.

    China county-level cities with Starbucks
    1,000+
    current

    Current footprint in China.

    China county-level cities expansion target
    1,500+
    next 3 years

    Plan to expand Starbucks' footprint in China.

    International business license model
    nearly 90%
    future

    International business moving towards this model, simplifying structure and strengthening support for business partners.

    Cold Foam platform sales growth
    more than 40%
    Q2 FY26

    Across U.S. company-operated business, with innovation in new flavors and protein strengthening appeal, especially among Gen Z.

    Delivery business growth
    more than 30%
    year-to-date

    Across U.S. company-operated business, proven to be a largely incremental revenue stream.

    U.S. licensed stores system-wide comps
    positivefirst time since Q1 fiscal 2024
    Q2 FY26

    Led by record airport volumes and growth in other discretionary segments, with recovery in retail and grocery.

    Share of U.S. company-operated coffeehouses delivering 4+ shots (Grow program)
    increased over 30 percentage points
    since October

    Since launching the simplified coffeehouse reporting and ranking system.

    5-shot coffeehouses with leader >1 year tenure
    80%
    Q2 FY26

    Coffeehouse leader stability is highly correlated to store performance.

    60 star redemption option usage
    approximately 1/3
    since launch

    Accounts for approximately 1/3 of all redemptions, becoming the most used reward.

    Brand affinity (consideration and purchase intent)
    5-year highs
    Q2 FY26

    Gains led by Gen Z and millennials, with more customers believing their Starbucks purchase is worth it.

    Multi-serve refreshers concentrate CPG launch
    largest CPG launch in over a decade
    last quarter

    Strong customer reception and repeat purchase behavior in North America.

    Consolidated G&A decrease
    5.5%
    Q2 FY26

    As organizational streamlining efforts continue to actualize this fiscal year.

    Industry KPIs

    5
    MetricValueDetails
    Comparable sales comps6.2%%
    Input cost inflation hedgingelevated coffee pricesqualitative
    Value affordability positioning60 star redemption optionqualitative
    Loyalty program members tier mix35.6 millionmembers
    Net unit growth development pipeline600 to 650units

    Product announcements

    3
    ProductTypeDetails
    App feature for scheduling order pickup timeupdate
    Tropical Butterfly Refresherlaunch
    Coffee and protein ready-to-drink beverageslaunch

    Deals & partnerships

    1
    Boyu CapitalDivestituremore than $13 billion (overall value to Starbucks, including NPV of licensing economics); $3.1 billion (gross cash proceeds before taxes)

    Transaction for Starbucks China's retail business, bringing together Starbucks' globally trusted brand with Boyu's local market expertise to unlock long-term opportunities.

    Risks & headwinds

    3
    Macro environment uncertaintycurrent

    heightened uncertainty

    Mitigation: Our comp guidance accounts for these considerations, but we want to be cautious going forward as we're not sure how this will play out.

    Product and distribution cost increasesQ2 FY26

    190 basis points

    Mitigation: Expected to moderate in the back half of fiscal 2026.

    Inflation from tariffs and elevated coffee pricesQ2 FY26

    almost $1 a pound year-over-year change

    Mitigation: Expected to abate toward the back end of the year, especially given recent trends in coffee prices. Results typically lag the market due to coffee purchasing and hedging practices.

    Q&A highlights

    8

    Inquired about current service time performance, the impact of algorithm changes, and how scheduled ordering will further improve service times.

    Brian Niccol stated that 80% of stores are hitting service time targets (4 min cafe, 4 min drive-thru, <12 min MOP). Scheduled ordering is expected to improve MOP predictability. The company is also learning to sequence mobile orders better for on-premise customers.

    “we've got about 80% of our stores or better hitting the metrics.”

    asked by Brian Harbour · answered by Brian Niccol

    2 min read6 chapters

    Detailed Narrative

    01

    Operational Excellence and Partner Investment

    Starbucks' "Back to Starbucks" strategy, focusing on "Green Apron Service," has led to improved customer experience scores and service times, with 80% of stores now hitting targets. The "Grow program" has significantly increased the number of U.S. company-operated coffeehouses delivering 4 or more shots by over 30 percentage points since October. Investments in weekly pay and a new quarterly reward program for baristas and shift supervisors aim to strengthen partner confidence and retention, with 80% of 5-shot coffeehouses having stable leadership.

    02

    Menu Innovation and Marketing Impact

    Disciplined menu innovation, including new bakery items, premium Matcha, and 1971 dark roast coffee, is driving demand across dayparts. New energy refreshers and a new mango flavor have exceeded expectations, strengthening a proven $2 billion platform. Marketing efforts are amplifying the brand through cultural events and tech platforms, leading to increased brand affinity, reaching 5-year highs in consideration and purchase intent, particularly among Gen Z and millennials.

    03

    Starbucks Rewards Program Revitalization

    The redesigned Starbucks Rewards program has successfully driven engagement, with U.S. 90-day active membership reaching a record 35.6 million, up 4% year-over-year. This growth bucked traditional seasonal sequential declines. The new 60-star redemption option has become the most used reward, accounting for approximately one-third of all redemptions, and early data indicates increased frequency among members visiting 4 or more times a week.

    04

    Coffeehouse Uplifts and Portfolio Management

    Strategic investments in coffeehouse uplifts are driving positive customer feedback and transaction trends, reinforcing the "third place" experience. Over 300 uplifts are complete, on budget and with zero closure days, with plans for more than 1,000 to be completed in top 20 markets by fiscal year-end. The "Grow report" combined with improving company-wide comp trends is also informing disciplined portfolio management and unit growth acceleration.

    05

    International Market Momentum and China JV

    International markets showed broad-based momentum, with all top 10 markets, including China, Japan, South Korea, and Mexico, posting positive comps for the first time in nine quarters. The transaction with Boyu Capital for Starbucks China's retail business, completed post-quarter, aims to unlock long-term opportunities, with plans to expand Starbucks' footprint in China from over 1,000 county-level cities today to more than 1,500 in the next three years, moving towards a nearly 90% license model internationally.

    06

    Financial Discipline and Cost Savings

    The company achieved its first consolidated margin expansion since Q1 FY24, driven by International segment recovery and a 5.5% decrease in consolidated G&A. While North America margins faced product, distribution, tariff, and coffee price pressures, these are expected to moderate📎 in the second half of FY26. The $2 billion cost savings plan, spanning through FY28, is on track, with current savings offsetting strategic investments in the "Back to Starbucks" plan.

    AI-generated summary of the company’s earnings call. Not investment advice.