Starbucks (NASDAQ:SBUX) Posts Earnings Results

Starbucks (NASDAQ:SBUX) issued its earnings results on Thursday. The coffee company reported $0.80 EPS for the quarter, beating the consensus estimate of $0.72 by $0.08, FiscalAI reports. Starbucks had a net margin of 5.17% and a negative return on equity of 34.10%. The company had revenue of $9.14 billion for the quarter, compared to the consensus estimate of $9.22 billion.

Here are the key takeaways from Starbucks’ conference call:

• Fiscal 2026 results exceeded expectations: Q4 global comparable sales rose 7.2%, U.S. comparable sales increased 7.7%, operating margin expanded 450 basis points to 14%, and EPS grew approximately 54% to $0.80.
• Starbucks expects continued earnings recovery in fiscal 2027, guiding to approximately 4% North America comparable-sales growth, 13.5%–14% operating margin, and EPS of $3.15–$3.25. Management said it is ahead of schedule toward its fiscal 2028 framework, supported by sales leverage and ongoing savings from its $2 billion cost program.
• Fiscal 2027 consolidated revenue is expected to decline approximately 1%, primarily because of the transition of Starbucks China’s retail operations to a licensed joint venture, along with lower channel-development revenue and fewer North American company-operated openings.
• Management highlighted several growth opportunities, including more than 2,000 North American coffeehouse uplifts, integrated delivery in the Starbucks app, personalized digital ordering, afternoon menu and beverage platforms, and approximately 1,200 net new global coffeehouses in fiscal 2027, mainly internationally.
• Starbucks plans to return capital to shareholders through its 16th consecutive annual dividend increase to $0.63 per share and approximately $1 billion in fiscal 2027 share repurchases, while maintaining an investment-grade balance sheet.

Starbucks Stock Performance

SBUX traded up $2.31 during mid-day trading on Thursday, reaching $105.51. The stock had a trading volume of 11,048,490 shares, compared to its average volume of 8,115,513. The firm’s fifty day simple moving average is $99.25 and its two-hundred day simple moving average is $99.55. The stock has a market capitalization of $120.28 billion, a P/E ratio of 60.64, a P/E/G ratio of 1.44 and a beta of 0.98. Starbucks has a 52 week low of $77.99 and a 52 week high of $110.51.

Starbucks Increases Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Friday, November 27th. Shareholders of record on Friday, November 13th will be given a $0.63 dividend. This represents a $2.52 dividend on an annualized basis and a yield of 2.4%. The ex-dividend date is Friday, November 13th. This is a positive change from Starbucks’s previous quarterly dividend of $0.62. Starbucks’s dividend payout ratio is 144.83%.

Insider Activity

In related news, CEO Brady Brewer sold 2,229 shares of the firm’s stock in a transaction dated Friday, September 4th. The stock was sold at an average price of $105.60, for a total value of $235,382.40. Following the transaction, the chief executive officer owned 73,149 shares in the company, valued at $7,724,534.40. This trade represents a 2.96% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 6,687 shares of company stock worth $685,935 over the last quarter. Corporate insiders own 0.03% of the company’s stock.

Wall Street Analysts Forecast Growth

Several brokerages recently issued reports on SBUX. Compass Point began coverage on shares of Starbucks in a report on Monday, August 3rd. They set a “buy” rating for the company. Piper Sandler upped their price objective on shares of Starbucks from $110.00 to $120.00 and gave the stock an “overweight” rating in a research note on Thursday, July 30th. Citigroup reaffirmed a “neutral” rating and set a $104.00 price objective (down from $112.00) on shares of Starbucks in a report on Tuesday, October 20th. Robert W. Baird cut their target price on shares of Starbucks from $124.00 to $115.00 and set an “outperform” rating for the company in a research note on Friday, October 2nd. Finally, Jefferies Financial Group lifted their target price on shares of Starbucks from $95.00 to $101.00 and gave the company a “hold” rating in a research note on Thursday, July 30th. Twenty-four equities research analysts have rated the stock with a Buy rating, twelve have given a Hold rating and four have issued a Sell rating to the company. Based on data from MarketBeat, Starbucks currently has an average rating of “Moderate Buy” and an average target price of $110.14.

Starbucks News Summary

Here are the key news stories impacting Starbucks this week:

• Positive Sentiment: Wall Street expects another quarter of positive same-store sales growth, supporting hopes that improvements in coffee quality, service and the customer experience are gaining traction. Starbucks stock has risen roughly 24% this year. Starbucks is about to report earnings. Here’s what to expect
• Positive Sentiment: Analysts anticipate fiscal fourth-quarter earnings of approximately $0.71 per share on $9.23 billion in revenue. A beat, particularly on comparable sales or margins, could reinforce confidence in CEO Brian Niccol’s turnaround strategy. Starbucks Likely To Report Higher Q4 Earnings
• Positive Sentiment: Investors are also watching whether Starbucks generated enough free cash flow to support its dividend, following the company’s latest dividend increase and continued annual payout-growth streak. Starbucks’ Dividend Rests on Free Cash Flow
• Neutral Sentiment: The earnings release is the immediate focus for investors, with attention on same-store sales, operating margins, China performance, full-year guidance and management’s outlook for the turnaround. Options markets imply a potentially large post-earnings move. Starbucks Q4 Earnings Are on October 29
• Negative Sentiment: Although expectations have improved, several analysts have reduced price targets. One fair-value estimate was lowered from about $112.23 to $109.93, suggesting a more cautious view after the stock’s strong advance and elevated valuation. Starbucks Stock Sees Modest Fair Value Cut
• Negative Sentiment: Starbucks faces renewed competition from McDonald’s, whose holiday menu includes seasonal beverages that compete with Starbucks’ important holiday offerings. McDonald’s or Starbucks Holiday Menu

Starbucks Company Profile

Starbucks Corporation is a global specialty coffee company headquartered in Seattle, Washington. Founded in 1971, the company operates and licenses coffeehouses under the Starbucks brand, serving brewed coffee, espresso beverages, teas, cold drinks, food, and other ready-to-consume products.

In addition to its company-operated and licensed stores, Starbucks sells packaged coffee, tea, and single-serve products through grocery retailers, convenience stores, and other distribution channels.