Starbucks Earnings: The Turnaround Looks Better Than the Revenue Headline

Starbucks reported falling revenue and improving comparable sales in the same quarter. That is not necessarily a contradiction: changing how a business is owned and reported can reduce recognised revenue without showing that customers are buying less at the remaining coffeehouses.

Tonight’s SEC-furnished results show $9.141 billion of Q4 revenue, against $9.569 billion a year earlier. Global comparable coffeehouse sales rose 7.2%, while GAAP diluted EPS increased to $0.59 from $0.12. Adjusted EPS was $0.80, versus $0.52.

China changes the accounting comparison

Starbucks says the conversion of its China retail operations to a licensed joint-venture model was the main reason consolidated revenue declined. A company-operated shop records customer sales differently from a licensed operation, where the parent earns a different mix of fees and related income.

That makes revenue growth a less straightforward measure of the turnaround during the transition. It does not mean revenue has become irrelevant. Investors need to connect the changed reporting perimeter to margins, cash generation and the economics retained by Starbucks.

A smaller reported revenue base can support a better business, but that outcome has to be demonstrated. The accounting change itself is not proof of improved returns.

Separate customer visits from spending per visit

Global comparable sales growth included a 5.2% increase in average ticket and 1.8% growth in transactions. The U.S. delivered 7.7% comparable sales growth, including 2.4% transaction growth. International transactions fell 2.8%, even as international comparable sales rose 0.9%.

Average ticket can change with prices and product mix; it is not a pure measure of menu-price increases. Transaction growth is the clearer evidence that more purchasing occasions are occurring at comparable locations.

That distinction matters for durability. A business can lift revenue per visit while losing visits, but there are limits to how far that can run. The stronger U.S. traffic result supports the turnaround case; the international decline deserves continued scrutiny.

The margin recovery needs context

GAAP operating margin reached 10.8%, compared with 2.9% a year earlier. Management identifies lower restructuring costs and sales leverage as key drivers. Some improvement therefore reflects comparison with a costly prior period, rather than only a permanent change in coffeehouse economics.

The adjusted operating margin was 14.0%. Watching both measures is more useful than choosing whichever produces the more dramatic improvement. Restructuring can be necessary, but shareholders still bear its cash and economic costs.

Next year’s forecast is not a simple growth headline

For FY2027, Starbucks guides adjusted EPS to $3.15–3.25 and North America comparable sales growth to roughly 4%. Forecast reported revenue falls about 1%, again mainly reflecting the China transition. FY2027 has 53 weeks, with the extra week contributing approximately $700 million of revenue and slightly more than ten cents of adjusted EPS within guidance.

Comparisons should therefore adjust for both the ownership change and the extra week. Otherwise, investors risk confusing calendar effects with operating momentum.

The quarter offers evidence that the turnaround is working in the U.S. The stronger investment case would combine sustained customer visits, durable margins and better cash returns across the wider portfolio.

The Starbucks earnings page now includes directly reported full-year FY2026 figures alongside its existing quarterly record. The Q4 figures discussed here are the standalone quarter from the release, not annual totals minus nine months. Browse all earnings coverage for the rest of tonight’s results.

Quarter ended 27 September 2026. Reported figures are GAAP unless labelled adjusted. General company analysis, not a personal investment recommendation.

Cover: Hiro - Kokoro☆Photo, Wikimedia Commons, CC BY-SA 2.0. Photographed 24 December 2015; archival, not the 2026 seasonal design. Resized for display; display cropping may apply. This image and its resized version remain available under the same licence.