Starbucks: US sales rise 7.9%, profit slides on China exit
Comparable sales climbed 7.2% worldwide and 7.9% in North America in the quarter to 27 September, but revenue fell 4% after Starbucks closed the sale of its China retail business.
Starbucks grew comparable sales 7.2% worldwide in the quarter to 27 September, its strongest increase in two years, but group profit slid as the coffee chain closed the sale of its China retail business.
The Starbucks earnings report, covering the fourth quarter of its 2026 fiscal year, was released on 29 October. North America led the rebound, with comparable sales up 7.9% on a higher average ticket and more transactions. International comparable sales rose a slimmer 0.9%.
Consolidated net revenue fell 4% to $9.1 billion. Starbucks attributes the drop to its China retail divestiture, completed during the quarter, which removed a large block of company-operated revenue from the consolidated accounts.
A bigger ticket, not more visits, is carrying Starbucks' recovery into the new fiscal year.
Profit narrows as costs bite
GAAP earnings per share came to $0.59, with non-GAAP EPS at $0.80. GAAP operating margin was 10.8% and non-GAAP operating margin 14.0%. The GAAP effective tax rate jumped to 27.1%, up from 18.8% a year earlier, a further drag on the bottom line.
The chain opened 303 net new coffeehouses in the quarter, ending with 41,607 stores worldwide. About 32% are company-operated and 68% licensed, a split that has shifted steadily toward franchise-style licensing over the past decade.
Executives framed the North America rebound as evidence that menu simplification and faster service are working after two soft years of US traffic. The China sale marks the opposite move: a retreat from direct ownership in the brand's second-largest market.
A smaller footprint, a bigger ticket
Starbucks also issued guidance for fiscal 2027, without disclosing detailed figures in the release. The company is betting that higher spend per visit, rather than more visits, carries its growth into the new year.
The chain's recovery comes as its supply chain faces firmer bean costs; Brazil's coffee exports to the US nearly doubled in September, easing some of the sourcing pressure roasters have faced this year.
Whether a bigger ticket holds through the US holiday quarter, typically Starbucks' busiest, will be the next test for these Starbucks earnings.
