Starbucks reported stronger-than-expected comparable sales growth of 7.2% in its latest quarter, driven by 7.7% same-store sales growth in its primary US market. However, fourth-quarter revenue fell 4.5% to $9.1bn, missing analyst estimates of $9.2bn, as the company continues to transition its China operations to a joint-venture model. Net income quintupled to $677.2m due to prior-year restructuring costs. CEO Brian Niccol, who launched the "Back to Starbucks" turnaround plan in late 2024, called the period "terrific" and expressed confidence in durable performance, announcing the resumption of share buybacks. The company forecast a 1% revenue decline for 2027, primarily due to the China shift and fewer North American store openings, adjusted earnings of $3.15 to $3.25 per share, and maintained pricing well below the consumer price index.
Shares edged lower in after-hours trading following the mixed results. While comparable sales beat the 6% Wall Street median forecast, the revenue miss and cautious 2027 outlook reflect ongoing challenges as the retail conversion in China to a licensed joint-venture model with private equity firm Boyu Capital continues. The two-year anniversary of the turnaround plan highlights progress but underscores the impact of structural changes on future growth prospects.
Source: Financial Times Companies · Summarized by HeadlinesBriefing