Starbucks — Fiscal Year 2026 Earnings Summary

Financial Performance:

• Consolidated net revenues for Q4 FY26 were $9.1 billion, a 4% decrease year-over-year, driven by the conversion of Starbucks retail operations in China to a licensed joint venture model.
• Consolidated net revenues for full FY26 were $37.9 billion, a 2% increase year-over-year.
• Q4 GAAP operating margin expanded 790 basis points to 10.8%; Non-GAAP operating margin expanded 450 basis points to 14.0%.
• Full-year GAAP operating margin expanded 180 basis points to 9.7%; Non-GAAP operating margin expanded 200 basis points to 11.9%.
• Q4 GAAP EPS was $0.59 (up 392%); Non-GAAP EPS was $0.80 (up 54%).
• Full-year GAAP EPS was $2.21 (up 36%); Non-GAAP EPS was $2.72 (up 28%).
• Q4 GAAP operating income was $991.8 million compared to $278.2 million in the prior year.
• Full-year GAAP operating income was $3,691.1 million compared to $2,936.6 million in the prior year.
• The divestiture of Starbucks retail operations in China resulted in a pre-tax gain of $536.3 million in FY26.
• Cash and cash equivalents ended FY26 at $3.68 billion, up from $3.22 billion in the prior year.
• Total liabilities were $36.05 billion, down from $40.11 billion in the prior year.
• Shareholders' deficit was $7.67 billion, compared to a deficit of $8.10 billion in the prior year.

Guidance and Future Outlook:

• Fiscal Year 2027 is a 53-week year.
• Consolidated net revenues for FY27 are expected to decline approximately 1% year-over-year, including approximately $700 million related to the 53rd week.
• North America comparable coffeehouse sales growth for FY27 is guided at approximately 4.0%.
• Non-GAAP consolidated operating margin for FY27 is guided at 13.5% to 14.0%.
• Non-GAAP earnings per share for FY27 is guided at $3.15 to $3.25, including slightly more than ten cents related to the 53rd week.
• Approximately 1,200 net new coffeehouses are expected globally in FY27, led by International.

Business Segments and Product Lines:

• Global Comparable Coffeehouse Sales: Increased 7.2% in Q4 and 6.2% for the full year.
• North America: Q4 comparable sales up 7.9% (U.S. up 7.7%); Full-year comparable sales up 6.6% (U.S. up 6.5%). Q4 net revenues were $7.3 billion (up 6%); Full-year net revenues were $28.9 billion (up 5.6%).
• International: Q4 comparable sales up 0.9% (driven by 3.7% ticket increase offset by 2.8% transaction decline); Full-year comparable sales up 3.7%. Q4 net revenues were $1.3 billion (down 37%); Full-year net revenues were $6.7 billion (down 13.8%).
• Channel Development: Q4 net revenues were $494.4 million (down 9%); Full-year net revenues were $2.2 billion (up 16.1%).
• Store Count: Ended Q4 FY26 with 41,607 coffeehouses globally (32% company-operated, 68% licensed). U.S. coffeehouses comprised 40% of the global portfolio (16,781 locations).
• Restructuring: Closed approximately 250 company-operated North America coffeehouses in Q4 FY26 as part of the "Back to Starbucks" plan.
• China Transition: Converted retail operations in China to a licensed joint venture model in Q3 FY26, resulting in 7,991 company-operated coffeehouses becoming licensed.

Market and Competitive Landscape:

• The "Back to Starbucks" plan is described by management as a growth plan rather than just a turnaround plan.
• Performance was driven by strength in product mix, customer food attach, pricing, and higher delivery sales.
• The company maintains a global footprint of more than 41,000 coffeehouses.

Risks and Challenges:

• Risks include the successful execution of the "Back to Starbucks" strategy and restructuring plans.
• Risks associated with the joint venture in China and other strategic transactions.
• Potential negative effects of food or beverage-safety incidents, product recalls, and supply chain disruptions.
• Macroeconomic conditions, inflation, interest rate fluctuations, and labor unrest.
• Competition from new entrants and pricing actions by competitors.
• Cybersecurity threats and data protection compliance.

Management Commentary and Tone:

• Brian Niccol, Chairman and CEO, stated the company had a "terrific quarter and a great year" driven by fundamentals and customer experience, expressing confidence in durable performance.
• Cathy Smith, CFO, noted the return to comp growth, margin expansion, and stronger earnings, highlighting confidence in the fiscal 2027 outlook.
• Management emphasized a disciplined focus on driving sustainable long-term value.

Other Key Points:

• The Board declared a cash dividend of $0.63 per share, payable November 27, 2026.
• The company has 66 consecutive quarters of dividend payouts with a CAGR of 16.6% over that period.
• Plans to resume share repurchases in fiscal 2027 were announced.
• The effective tax rate for Q4 was 27.1% (up from 18.8%); for the full year, it was 34.2% (up from 25.9%), driven by discrete items related to the China divestiture.
• Net cash provided by operating activities for FY26 was $4.99 billion.
• Net cash used in financing activities for FY26 was $5.64 billion, primarily due to cash dividends paid ($2.82 billion) and debt repayments.
• Net proceeds from the divestiture of certain operations (China) were $2.54 billion.