Starbucks (SBUX) Beats Q4 Profit Estimates but Revenue Falls Short

Starbucks (SBUX) reported fiscal fourth-quarter revenue of $9.14 billion, down 4% year on year and short of the $9.23 billion analysts expected, according to LSEG data cited by CNBC. Adjusted earnings of 80 cents a share beat the 72-cent LSEG consensus; FactSet’s estimate was also 72 cents. The shares slipped 0.6% to $104.83 as of 9:31 a.m. ET on Friday, after the results came out following Thursday’s close.

The stock had already risen 2.2% on Thursday, closing at $105.51 before the report.

What stood out

Sales at existing stores did the work. Global comparable store sales, which strip out stores opened or closed in the past year, rose 7.2%, and North America, the company’s largest market, rose 7.9%.

International was the weak spot, with comparable sales up only 0.9%. Total revenue fell because Starbucks moved its China stores into a licensed joint venture this year, so it now books a smaller share of sales there, the release and CNBC both showed.

Profit grew much faster than sales. Adjusted earnings rose 54% from a year earlier. On the call, Chief Executive Brian Niccol said “Back to Starbucks,” the plan he launched in 2024 to speed up service and fix the cafes, has moved from a turnaround plan to a growth plan.

The outlook

Starbucks expects adjusted earnings of $3.15 to $3.25 a share in fiscal 2027, the year to September 2027, against the $3.14 analysts expected, according to LSEG data cited by Reuters. Fiscal 2027 has 53 weeks, and the extra week is worth a little more than 10 cents of that forecast, the company said.

It expects North America comparable sales to grow about 4% and an operating margin of 13.5% to 14%. Revenue is expected to fall about 1%, again because of the China deal.

The stock went into the report up 25.3% this year, and at Thursday’s close it sat 2.8% below its 52-week closing high of $108.55 from 13 August.

Our take

The quarter shows the turnaround working where it matters most: sales at North American cafes are growing again, and profit is growing faster than sales. The revenue miss is mostly an accounting effect of the China deal, but International comparable sales near zero are a real soft spot. Next quarter we’d watch whether North America can hold growth near the 4% guide and how much of next year’s earnings growth depends on the extra week.