Starbucks stock gains momentum as margins widen despite China drag

Starbucks reported stronger comparable sales and profitability for the fiscal fourth quarter ended September 27, 2026, while the transition of its China business to a licensed joint venture reduced consolidated revenue. The company released the results on October 29 in a filing with the U.S. Securities and Exchange Commission.

Comparable sales support the turnaround

Global comparable coffeehouse sales increased 7.2% in the 13-week quarter, the fifth consecutive quarter of growth. North America rose 7.9%, with transactions up 2.7% and average ticket higher by 5.0%. U.S. comparable sales increased 7.7%, supported by a 2.4% increase in transactions and a 5.2% rise in average ticket.

International comparable sales grew 0.9%, as a 3.7% increase in average ticket only partly offset a 2.8% decline in transactions. Starbucks opened 303 net new coffeehouses during the quarter and ended the period with 41,607 locations, including company-operated and licensed stores.

Margins widen as China changes

Consolidated net revenue fell 4.5% year over year to 9.14 billion US dollars. Starbucks attributed the decline primarily to the conversion of its China retail operations from company-operated stores to a licensed joint venture model. The International segment's revenue declined 37% to 1.31 billion US dollars, while its operating income rose to 256.9 million US dollars and its operating margin expanded to 19.7%.

GAAP operating margin increased to 10.8% from 2.9% a year earlier. Non-GAAP operating margin reached 14.0%, up 460 basis points on a reported basis and 450 basis points at constant currency. Non-GAAP earnings per share rose 54% to 0.80 US dollars, while GAAP earnings per share increased to 0.59 US dollars from 0.12 US dollars.

Chief Executive Brian Niccol said the Back to Starbucks plan had evolved into the company's growth plan. Chief Financial Officer Cathy Smith said fiscal 2026 brought a return to comparable-sales growth, margin expansion and stronger earnings. The company also said it had closed about 250 North American company-operated coffeehouses in September as part of its portfolio review.

Fiscal 2027 starts with measured targets

Starbucks expects fiscal 2027 consolidated revenue to decline by about 1%, with about 700 million US dollars associated with the additional 53rd week. Management projects North America comparable sales growth of about 4%, a non-GAAP operating margin of 13.5% to 14.0% and non-GAAP earnings per share of 3.15 to 3.25 US dollars. The plan calls for about 1,200 net new coffeehouses worldwide, led by International.

For investors, the results show a sharper split between operating momentum in North America and the lower reported revenue base created by the China transaction. The next test is whether transaction growth and cost savings can sustain margin gains as the comparison moves beyond the initial benefits of restructuring.

Starbucks stock traded at 94.82 euros on Lang & Schwarz at 15:12 CET on Monday, November 9, 2026, 0.18 percent below the Xetra close of Friday, November 6, 2026.

The US market environment provides the broader backdrop for Starbucks stock.

More news and analyses on Starbucks stock will focus on North American demand, international expansion and the effect of the China model on reported growth.