In brief
Starbucks’ fourth‑quarter revenue slipped 4.5% year‑on‑year to $9.14 billion, yet net income leapt 408.8% to $677.2 million, largely due to sharp reductions in restructuring and impairment expenses. The decline was largely attributed to the conversion of China retail operations to a licensed joint‑venture model, while global comparable sales actually rose 7.2% and the company projected a 1% revenue decline for the full fiscal year 2027. It also announced plans to open 1,200 new coffeehouses worldwide during the year.
Starbucks announced on Thursday that its fourth‑quarter revenue fell 4.5% year‑on‑year to $9.14 billion, while net income surged 408.8% to $677.2 million, a rise attributed largely to a sharp decline in restructuring and impairment costs.
For the 13‑week quarter ended September 27, the coffee giant’s diluted earnings per share jumped from $0.12 to $0.59, while non‑GAAP adjusted earnings per share rose 53.8% to $0.80. Operating income climbed 256.5% to $991.8 million from $278.2 million a year earlier, boosting the operating margin to 10.8% from 2.9%.
The revenue decline was mainly explained by the company’s decision to convert its China retail operations to a licensed joint‑venture model, a move that reduced sales in that market. Despite that, global comparable coffeehouse sales rose 7.2%, driven by a 5.2% increase in average ticket price and a 1.8% rise in comparable transactions.
In North America, comparable sales increased 7.9%, including a 7.7% rise in the United States, while the North American segment’s revenue grew 6% to $7.33 billion. Conversely, the international segment recorded a 37% revenue decline to $1.31 billion, largely reflecting the China transition. International comparable sales were up 0.9%.
Starbucks opened a net 303 new coffeehouses during the quarter, bringing its global store count to 41,607 at the end of September.
For the full fiscal year 2026, the company posted revenue of $37.91 billion, up 2% from the prior year, and net income of $2.53 billion, a 36.1% increase. Diluted earnings per share rose to $2.21 from $1.63.
Future Outlook
Looking ahead, Starbucks expects revenue to decline approximately 1% in fiscal 2027, primarily reflecting the transition of its China operations to the licensed joint‑venture model. The company projects about 4% growth in North American comparable sales and plans to open a net 1,200 new coffeehouses worldwide.
While the company highlighted a sharp improvement in operating margin, the substantial reduction in restructuring and impairment expenses that helped drive the current year’s profit surge could vary in future periods, indicating potential volatility in earnings depending on ongoing restructuring activities and the success of the joint‑venture model in China.
