Starbucks Q1 2026 Earnings Show Mixed Results as Sales and Traffic Grow Faster Than Expected

Starbucks reported its first-quarter earnings for fiscal 2026, showing a mix of positive traffic growth and pressures on profitability. The company saw its customer visits rise for the first time in two years, signaling early success in its turnaround strategy under CEO Brian Niccol.

For the quarter ended December 28, Starbucks posted adjusted earnings per share of 56 cents, slightly below Wall Street’s expectation of 59 cents. Revenue came in at $9.92 billion, beating the consensus estimate of $9.67 billion. Despite the top-line growth, net income attributable to Starbucks fell to $293.3 million, or 26 cents per share, down significantly from $780.8 million, or 69 cents per share, a year earlier.

Traffic and Same-Store Sales Growth

Starbucks experienced a 3% increase in global customer traffic, marking the first rise in two years of transactions. Same-store sales expanded 4% worldwide, outpacing analysts’ projections of approximately 2.3%. The U.S. market mirrored this growth, with a 4% increase driven primarily by the popularity of seasonal products like the viral "Bearista" cup and perennial favorites such as peppermint mocha.

Internationally, Starbucks’ same-store sales grew 5%, with China—its second-largest market—leading the gains at 7%. The company announced a planned joint venture with Boyu Capital to operate its China business, a transaction expected to close in the second quarter of fiscal 2026 pending regulatory approval. Meanwhile, Starbucks will continue managing its China retail stores through the first half of the year.

Financial Outlook and Operating Plans

Starbucks reinstated its fiscal 2026 guidance, forecasting adjusted earnings per share between $2.15 and $2.40. This range sits at the lower bound of Wall Street’s consensus estimate of $2.35 per share. The company projects global and U.S. same-store sales growth of at least 3% for the full year.

The quarter’s results were weighed down by costs linked to the ongoing turnaround efforts, along with higher coffee prices and tariffs. These factors compressed margins, contributing to the year-over-year decline in net income excluding non-recurring charges.

During the quarter, Starbucks expanded its footprint by opening a net 128 new locations. For the fiscal year, the company plans to launch between 600 and 650 net new company-operated and licensed cafes, a significant acceleration after closing roughly 400 U.S. stores last year.

Investor Engagement and Future Plans

Starbucks is set to hold an investor day where Niccol and other executives will outline the company’s long-term financial goals and provide further insights into the “Back to Starbucks” strategy. Investors are anticipating updates on how Starbucks intends to balance growth with margin improvements amid evolving market conditions.

The retailer’s emphasis remains on enhancing customer visits and sustaining sales momentum through innovation and brand strength. These efforts will be critical as Starbucks navigates cost pressures and macroeconomic uncertainties while expanding globally.

This quarter’s results highlight both the progress and challenges Starbucks faces in executing its turnaround plan. Continued focus on operational execution and market expansion will be key factors to watch in the upcoming quarters.