Q3 Fiscal Year 2026
Filed Jul 29, 2026Starbucks Reports Q3 Fiscal Year 2026 Results Company Delivers Four Consecutive Quarters of Comp Growth and Two Consecutive Quarters of Margin Expansion
Global comparable store sales increased 7.9%, GAAP operating margin expanded 60 basis points to 10.5%, and non-GAAP EPS expanded 70%, while consolidated net revenues decreased 1% to $9.3 billion because of the Starbucks China transaction.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Global comparable store salesother | 7.9% | – | – |
| Global comparable transactionsother | 4.2% | – | – |
| Global average ticketother | 3.5% | – | – |
| Consolidated net revenuesGAAP | $9.3 billion | – | (1)% |
| GAAP operating marginGAAP | 10.5% | – | 60 basis points |
| Non-GAAP operating marginnon-GAAP | 14.4% | – | 430 basis points |
| Effective tax rateGAAP | 26.4% | – | – |
| Non-GAAP effective tax ratenon-GAAP | 21.8% | – | 960 basis points |
| Earnings per shareGAAP | $0.91 | – | 86% |
| Earnings per sharenon-GAAP | $0.85 | – | 70% |
| Net new storesother | 175 | – | – |
| Global store countother | 41,304 stores | – | – |
| Company-operated share of global portfolioother | 33% | – | – |
| Licensed share of global portfolioother | 67% | – | – |
| U.S. share of global portfolioother | 41% | – | – |
| U.S. store countother | 16,933 stores | – | – |
| North America operating incomeGAAP | $1,008.9 | – | 10% |
| North America operating marginGAAP | 13.6% | – | 30 bps |
| International operating incomeGAAP | $252.8 | – | (7)% |
| International operating marginGAAP | 19.1% | – | 550 bps |
| Channel Development operating incomeGAAP | $306.2 | – | 40% |
| Channel Development operating marginGAAP | 52.1% | – | 700 bps |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| North AmericaIncrease in company-operated store revenue due to an 8.1% increase in comparable store sales, driven by a 4.5% increase in comparable transactions and a 3.5% increase in average ticket, primarily due to higher delivery sales and strength in customer food attach and beverage modifications. | $7,395.1 | – | 7% |
| InternationalConversion of Starbucks retail operations in China to the licensed joint venture model in the third quarter of fiscal 2026 drove lower company-operated store revenues and largely contributed to higher product sales to, and royalty revenue from, licensees. | $1,322.6 | – | (34)% |
| Channel DevelopmentIncrease in revenue in the Global Coffee Alliance. | $587.9 | – | 22% |
Fiscal Year 2026 outlook
- RevenueConsolidated net revenues flat to slight growth year over year
- NoteFourth quarter U.S. comparable store sales growth of 6.5% or greater
- NoteFull fiscal year 2026 U.S. comparable store sales growth of slightly greater than 6.0%
- NoteFull fiscal year 2026 global comparable store sales growth nearing 6.0%
- NoteNon-GAAP consolidated operating margin greater than 11.0%
- NoteNon-GAAP earnings per share in the range of $2.55 to $2.65
- NoteApproximately 600 to 650 net new coffeehouses globally across company-operated and licensed businesses
Capital returns
- The Board declared a cash dividend of $0.62 per share, payable on August 28, 2026, to shareholders of record on August 14, 2026.
What drove it
- Global comparable store sales increased 7.9%, primarily driven by a 4.2% increase in comparable transactions and a 3.5% increase in average ticket.
- North America comparable store sales increased 8.1%, supported by higher delivery sales and strength in customer food attach and beverage modifications.
- GAAP operating margin expansion was primarily driven by sales leverage and lower inflation paired with tariff refunds.
- Channel Development revenue increased due to the Global Coffee Alliance.
- Starbucks completed the transaction with funds managed by Boyu Capital to operate the Starbucks retail business in China and retains a 40% ownership interest in the joint venture.
Concerns
- Consolidated net revenues decreased 1% to $9.3 billion, reflecting the Starbucks China transaction.
- International net revenues decreased 34% as Starbucks retail operations in China converted to a licensed joint venture model.
- Higher restructuring costs, labor investments largely in support of Back to Starbucks, and product mix shift partially offset North America margin gains.
- Higher restructuring costs partially offset International operating-margin expansion.
- Product mix shifts and lower income from the North American Coffee Partnership joint venture relative to segment revenue growth partially offset Channel Development margin expansion.
What to watch
- Fourth quarter U.S. comparable store sales growth of 6.5% or greater.
- Full fiscal year 2026 U.S. comparable store sales growth of slightly greater than 6.0% and global comparable store sales growth nearing 6.0%.
- Delivery sales, customer food attach, and beverage modifications in North America.
- The effect of the Starbucks China joint venture licensee structure, which applies in the second half of fiscal year 2026.
- Non-GAAP consolidated operating margin greater than 11.0% and non-GAAP earnings per share in the range of $2.55 to $2.65.
Balance sheet and cash flow
- The company used a portion of the China sale proceeds to complete a series of tender offers to purchase approximately $1.3 billion aggregate principal amount of certain series of the company's outstanding notes.
Analysis
Starbucks delivered broad comparable-sales momentum in the third quarter, with global comparable store sales up 7.9%. The growth was led by a 4.2% increase in comparable transactions and a 3.5% increase in average ticket. North America was the principal operating growth engine, with comparable store sales up 8.1%, transactions up 4.5%, and ticket up 3.5%. Management attributed the regional sales performance to higher delivery sales and strength in customer food attach and beverage modifications.
Reported consolidated net revenues decreased 1% to $9.3 billion, including on a constant currency basis, reflecting the Starbucks China transaction. The segment presentation shows the effect clearly: North America net revenues increased 7% to $7,395.1, while International net revenues decreased 34% to $1,322.6 following the conversion of Starbucks retail operations in China to a licensed joint venture model. Channel Development provided an offset, with net revenues increasing 22% to $587.9, primarily due to the Global Coffee Alliance.
Margins improved across the company and each reported segment. GAAP operating margin expanded 60 basis points year-over-year to 10.5%, while non-GAAP operating margin expanded 430 basis points to 14.4%. North America operating margin rose 30 bps to 13.6%, International margin rose 550 bps to 19.1%, and Channel Development margin rose 700 bps to 52.1%. Sales leverage, lower inflation, and tariff refunds supported the result, although restructuring costs, labor investments supporting Back to Starbucks, and product mix shifts remained offsets. GAAP EPS increased 86% to $0.91 and non-GAAP EPS expanded 70% to $0.85.
Capital allocation included tender offers to purchase approximately $1.3 billion aggregate principal amount of outstanding notes using a portion of China sale proceeds. The Board also declared a cash dividend of $0.62 per share, payable on August 28, 2026, to shareholders of record on August 14, 2026. Starbucks ended the period with 41,304 stores after opening 175 net new stores in Q3, with 33% company-operated and 67% licensed.
The company raised fiscal year 2026 guidance and now expects fourth-quarter U.S. comparable store sales growth of 6.5% or greater, full-year U.S. comparable store sales growth of slightly greater than 6.0%, and global comparable store sales growth nearing 6.0%. It guides to flat to slight consolidated revenue growth, non-GAAP consolidated operating margin greater than 11.0%, non-GAAP EPS of $2.55 to $2.65, and approximately 600 to 650 net new coffeehouses globally. The outlook reflects Starbucks China as a joint venture licensee structure in the second half of fiscal 2026, compared with company-operated reporting in the first half.
Management, verbatim
Our Back to Starbucks plan was built on the belief that an extraordinary cup of coffee, human connection and customer experience win the day, every day. Our third quarter results are proof they do.
Brian Niccol, chairman and chief executive officer
Our third quarter results reflect the growing durability of our performance across both the top and bottom line, giving us confidence in the trajectory of our business.
Cathy Smith, chief financial officer
Not in the filing
stated, not guessed- Consolidated net revenue prior-year absolute amount
- Consolidated GAAP operating income
- Consolidated GAAP net income
- GAAP EPS prior-year absolute amount
- Non-GAAP EPS prior-year absolute amount
- Gross profit and gross margin
- Operating cash flow
- Free cash flow
- Cash and cash equivalents
- Total debt or debt balance after the tender offers
- Share repurchases
- Prior-quarter comparisons for reported metrics
- Prior outlook for comparison
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.