Starbucks beat Wall Street's earnings expectations in its fiscal fourth quarter of 2026 as American customers kept coming back, with comparable sales in the United States rising 7.7% — the clearest sign yet that chief executive Brian Niccol's turnaround plan is working, even as headline revenue fell because of a major change to how the company counts its China business. Starbucks Q4 earnings, reported after the market closed on Thursday, October 29, 2026, showed adjusted earnings of $0.80 per share, comfortably ahead of the $0.73 consensus estimate, while global comparable sales rose 7.2% for a fifth consecutive quarter of growth.
The headline numbers tell two stories at once. Profitability surged: net income attributable to Starbucks rose to $677.2 million, or $0.59 per share, from $133.1 million, or $0.12 per share, a year earlier, and adjusted earnings of $0.80 compared with $0.52 a year ago. Revenue, by contrast, fell 4.5% to $9.14 billion from $9.57 billion a year earlier, missing the Zacks consensus estimate by 1.41%. The company explained that decline largely by the mid-year shift of its China retail business to a joint-venture licensing model with Boyu Capital, which removed those sales from its consolidated revenue — a change in accounting, not a collapse in demand.
Starbucks released its fourth-quarter and full-year fiscal 2026 results on Thursday, October 29, 2026, for the quarter ended September 27, 2026, followed by an earnings call at 4:15 p.m. Eastern time led by Niccol and chief financial officer Cathy Smith. The adjusted earnings beat was the company's third time surpassing consensus earnings estimates in the last four quarters, according to Zacks, while revenue has topped estimates only twice in that period — a pattern that fits a company whose profits are recovering faster than its reported top line.
The sales detail is where the turnaround shows up most clearly. Global comparable sales increased 7.2%, above analyst estimates of roughly 6% to 6.2%, and US comparable sales grew 7.7%, with North America comparable sales of 7.9% against a 7.2% estimate in Zacks' key-metrics breakdown. Foot-traffic data cited in coverage of the results showed US store visits growing faster than rivals, supporting the idea that the improvement came from more customers and better store operations, not just higher prices. International comparable sales, however, rose only 0.9%, well short of the 3% analysts had expected, and international net revenue fell 37% year over year to $1.31 billion — again largely reflecting the China deconsolidation rather than a sudden loss of overseas customers.
Starbucks also kept expanding its footprint, opening 303 net new cafes during the quarter, according to CNBC's account of the results, taking its total store count to 41,607, slightly above the 41,477 analysts had expected. In North America, the company closed coffeehouses that, in Niccol's words on the call, did not show a path to delivering the experience or financial performance it expects — pruning weak locations even as it added stores overall.
Niccol took over Starbucks in 2024 with a mandate to fix a business that had drifted: long waits, cluttered stores and frustrated baristas had begun to show up in sales. His "Back to Starbucks" plan focused on the basics — faster service, cleaner and more welcoming cafes, and a better experience for both customers and staff — and the company has now reported five consecutive quarters of comparable sales growth, suggesting the plan has moved from promise to pattern.
The China change is the other big piece of context for this quarter's numbers. In mid-2026 Starbucks moved its China retail business into a joint venture with Boyu Capital under a licensing model, so those stores' sales no longer appear in Starbucks' consolidated revenue. That single change explains why revenue can fall 4.5% in a quarter when comparable sales rise 7.2%: the underlying stores are still selling coffee, but the money is now counted differently. It also explains the sharp fall in reported international revenue, and why investors were told to look at comparable sales and earnings, rather than headline revenue, to judge the quarter.
The results also landed in a week when Wall Street was punishing big technology companies for heavy artificial-intelligence spending — Alphabet, Amazon and Intel all reported in the same earnings season and saw their shares fall — making a consumer company's earnings beat stand out. Ahead of the release, Starbucks shares had already added about 22.6% since the start of the year, against a 13.1% gain for the S&P 500, and Zacks carried a Rank #2 (Buy) rating on the stock, with the estimate-revisions trend described as favourable before the report.
The profit recovery is the most striking part of the report. GAAP net income of $677.2 million more than quadrupled from $133.1 million a year earlier, partly because last year's quarter carried heavier restructuring and impairment charges. Adjusted earnings, which strip out those items, rose about 54% to $0.80 per share. Consolidated operating margin expanded by 450 basis points year over year to 14% in the quarter, the third consecutive quarter of margin growth, according to the earnings call — evidence that the company is keeping more of each sales dollar even as it invests in stores and staff.
For the full fiscal year, consolidated net revenue grew to $37.9 billion, up 2.1%, slightly below analysts' $38 billion expectation, while adjusted earnings rose 28% year over year to $2.72 per share, beating the $2.62 forecast. North America net revenue in the quarter was $7.33 billion, up 6.2% year over year and essentially in line with estimates, while company-operated store revenue was $7.43 billion, down 5.5% year over year on the China change. Licensed-store revenue was $1.2 billion, roughly flat against expectations.
The guidance for fiscal 2027 is deliberately cautious. Starbucks expects consolidated net revenue to decline by about 1% year over year, including roughly $700 million related to the 53rd week in the fiscal calendar and the China business transformation, with North America comparable sales growth of about 4% — a slowdown after three consecutive quarters above 7% — and adjusted earnings of $3.15 to $3.25 per share, just above analysts' $3.14 to $3.16 expectations. In other words, the company is telling investors to expect steadier, slower growth next year, with profits still rising.
Niccol struck an upbeat tone on the earnings call, framing the quarter as the moment the turnaround became a growth story. "We closed fiscal 2026 with another terrific quarter and a much stronger Starbucks than we had a year ago," he said. "Back to Starbucks started as a turnaround plan, and now Back to Starbucks is our growth plan. In Q4, our net revenues were $9.1 billion, down 3.9% year-over-year, reflecting the mid-year transition of our China business to a licensed model. Global comps were up 7.2%, marking our fifth consecutive quarter of comp growth, and U.S. comps were up 7.7%."
Analyst reaction, as captured by Zacks, was more measured: the sustainability of any immediate share-price move would depend largely on management's commentary on the call, it said, and the current consensus estimate for the coming quarter is $0.76 per share on $9.75 billion in revenue. The cautious fiscal 2027 sales guidance — North America comparable growth of about 4% after a run above 7% — gives sceptics something to point to, even as the earnings guidance of $3.15 to $3.25 per share sits above expectations. The debate, in short, is not whether the turnaround is real — five quarters of comparable growth answer that — but how fast it can keep running.
Starbucks matters beyond its own shareholders because it is one of America's most visible consumer bellwethers. When its US comparable sales rise 7.7%, it suggests American consumers are still willing to spend on small, everyday treats even as they complain about the cost of living — a useful counterpoint to the gloomier signals from this week's technology sell-off and to the inflation data showing prices still well above the Federal Reserve's target. It also matters for the thousands of workers and landlords tied to its more than 41,000 stores, and for the coffee supply chain that feeds them.
For investors, the report reframes the question around Starbucks. A year ago the question was whether Niccol could stop the slide; now it is whether a company guiding to about 4% North America comparable growth and a small revenue decline can keep expanding its margins and earnings fast enough to justify a share price that has already risen more than 22% this year. The China licensing model is part of that answer: by giving up consolidated revenue, Starbucks trades headline growth for a steadier, asset-lighter income stream, and the market will judge that trade over several quarters, not one.
The next test comes with the fiscal first quarter of 2027, for which analysts currently expect earnings of $0.76 per share on $9.75 billion in revenue, and with the first quarter earnings call tentatively scheduled for Wednesday, January 27, 2027. Investors will watch whether US comparable sales hold near their recent pace or cool toward the guided 4% for the year, whether international comparable sales recover from the weak 0.9% of this quarter, and whether the operating margin can hold near 14%.
Closer to home, the restaurant sector's earnings season continues, with Shake Shack — another name in the same industry — due to report its quarter ended September 2026 on November 5, with analysts expecting $0.33 per share, down 8.3% year over year. Starbucks' own seasonal business also now moves into its busiest period, with the holiday drinks season testing whether the improved store experience can convert the turnaround's momentum into another quarter of growth.
Yes, on earnings. Adjusted earnings of $0.80 per share beat the Zacks consensus estimate of $0.73 by 9.59%, and compared with $0.52 a year ago. Revenue of $9.14 billion, however, missed the consensus estimate by 1.41%.
Comparable sales — sales at stores open at least a year — rose 7.2% globally and 7.7% in the US. Reported revenue fell 4.5% mainly because China retail sales were removed from consolidated revenue after the business moved to a joint-venture licensing model with Boyu Capital in mid-2026.
Adjusted earnings of $3.15 to $3.25 per share, North America comparable sales growth of about 4%, and a consolidated revenue decline of about 1%, including about $700 million from the 53rd week and the China transformation.
Starbucks opened 303 net new cafes in the quarter, taking its total to 41,607 stores, slightly above the 41,477 analysts had expected. In North America it also closed locations that did not show a path to the expected experience or financial performance.
Its fiscal first-quarter 2027 earnings call is tentatively scheduled for Wednesday, January 27, 2027. Analysts currently expect $0.76 per share on $9.75 billion in revenue for that quarter.
Related coverage on US News Pulse: Amazon Q3 earnings miss estimates as AWS grows 39% and shares fall after hours; Intel Q3 earnings: shares plunge 17% as weak Q4 outlook overshadows AI surge; Nasdaq falls 1.4% as Alphabet rout drags Wall Street lower on Thursday.
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