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Starbucks reported stronger-than-expected comparable sales in its latest quarter and said it would resume share buybacks, as its turnaround plan to improve the coffee chain’s performance reached its second anniversary.
However, the Seattle-based group’s latest quarterly revenue figures and 2027 revenue outlook fell short of forecasts, as the company continues to move away from transitioning its China retail operations to a joint venture model.
Shares of the coffee chain operator fell slightly after hours.
Brian Niccol, who implemented the Back to Starbucks turnaround plan when he became chief executive in late 2024, called the latest quarter and financial year “tremendous” and said he was confident the company’s performance was “sustainable.”
“The return to Starbucks started as our turnaround plan. Now it’s our growth plan,” he said Thursday as the group also announced plans to resume share buybacks in 2027. Buybacks were suspended in 2022 by former CEO Howard Schultz.
Starbucks reported comparable sales growth, an important industry metric, of 7.2 percent across its global operations in the quarter ended September 27. That’s a slowdown from the previous three-month period, but better than Wall Street’s median forecast of 6 percent.
This growth was supported by same-store sales growth of 7.7 percent in the United States, its largest market, and largely by an increase in the average purchase by customers. Internationally, same-store sales increased 0.9 percent, as higher prices were offset by lower transactions.
Fourth-quarter revenue fell a further 4.5 percent to $9.1 billion, while net profit increased five-fold to $677.2 million due to restructuring costs from the previous year. Analysts expected revenue of $9.2 billion and net income of $756 million.
Starbucks said the decline in revenue was due to the conversion of its China retail operations to a licensed joint venture model. The company announced a year ago that it would sell a majority stake in its mainland operations to private equity firm Boyu Capital.
This transition should still have an effect over the coming months. Starbucks forecast a 1% decline in revenue for 2027, “primarily driven” by moving operations to China, but offset by a $700 million increase starting in the 53rd week of the fiscal year. Wall Street expected growth of around 1.6 percent.
Expectations of fewer cafe openings in North America are also expected to weigh on the revenue outlook, and executives told analysts Thursday that product prices would remain “on target” and “well below” the consumer price index.
Starbucks expects adjusted earnings of $3.15 to $3.25 per share in 2027, compared to analyst estimates of $3.14 per share.
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