U.S. Growth Outpaces Global Slowdown
Starbucks closed fiscal 2026 with a striking contrast: domestic sales surged while overseas locations lagged. The coffee chain posted adjusted earnings of $0.80 per share, comfortably beating the $0.72 consensus, driven largely by a 4% same‑store sales gain in North America.
CEO Brian Niccol hailed the “momentum” and signaled that the company is on track to exceed its fiscal 2028 targets, a bold claim given the mixed results.
- Adjusted EPS: $0.80 vs. $0.72 expected
- North American same‑store sales: +4% YoY
- Full‑year EPS guidance: $3.15‑$3.25, above analysts’ $3.14
International Weakness and Revenue Pressure
Despite the U.S. upswing, global cafés delivered a disappointing performance, pulling overall revenue down to $9.14 billion—short of the $9.23 billion Wall Street forecast. Analysts had anticipated a modest 1.4% sales growth, yet Starbucks now expects a 1% decline for fiscal 2027.
The shortfall reflects two headwinds: a shift to a joint‑venture model in China and a slight deflation in coffee bean prices, both of which dampen top‑line growth.
- Revenue: $9.14 bn vs. $9.23 bn expected
- Projected FY 2027 revenue: –1% (vs. +1.4% consensus)
- China JV transition and coffee price deflation cited as revenue drags
What the Outlook Means for Investors
Investors should weigh the strength of the U.S. rebound against the lingering overseas slump. The company’s guidance suggests confidence, but the anticipated slowdown in new North American store openings and weaker global demand could cap future upside.
If Starbucks can sustain its 4% domestic same‑store growth while stabilizing its international operations—especially in China—the earnings guidance appears achievable. Otherwise, the revenue decline could erode investor enthusiasm.
Bottom line: the American comeback is real, but it won’t fully offset the global headwinds unless the brand cracks the overseas growth puzzle.
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