1. Starbucks reported Q3 2026 earnings (April-June quarter) on July 29, 2026
2. Global comparable store sales rose 7.9%, well above expectations of 5.7%
3. The company reports growth across income levels and dayparts (morning and afternoon)
4. They’ve raised their full-year outlook
5. CEO Brian Niccol’s “Back to Starbucks” strategy is working
6. Specific product innovations like Refreshers are driving afternoon sales
7. Traffic and customer spending are both up
Let me write the article now:
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Starbucks reported strong results for its fiscal third quarter Wednesday, demonstrating that its turnaround efforts under CEO Brian Niccol are gaining significant momentum across diverse customer segments and throughout the day.
Global same-store sales climbed 7.9 percent during the three-month period that ended June 28, substantially exceeding Wall Street’s expectations of 5.7 percent growth. The Seattle-based coffee chain’s U.S. same-store sales also increased 7.9 percent, marking the fourth consecutive quarter of positive comparable-store sales growth. The company said its business grew across customer income levels and in both morning and afternoon dayparts, signaling broad-based strength throughout the customer base and throughout the day.
The results exceeded analyst forecasts for both earnings and revenue. Starbucks earned 85 cents per share on an adjusted basis, surpassing expectations of 66 cents. Net sales declined 1 percent to $9.3 billion, primarily because of the company’s sale of a controlling stake in its China business to Boyu Capital, completed in April. However, the reported revenue still beat analysts’ forecast of $9.2 billion, and net income rose 87 percent to $1 billion.
Reflecting confidence in the company’s trajectory, Starbucks raised its financial guidance for the full fiscal year, which ends September 28. The company now expects global same-store sales to grow approximately 6 percent, up from its previous forecast of 5 percent growth. Starbucks also increased its full-year earnings per share guidance to a range of $2.55 to $2.65, up from the prior outlook of $2.25 to $2.45 per share.
The gains reflect the company’s “Back to Starbucks” strategic initiative, which focuses on improving service, making stores more welcoming, and bolstering the overall customer experience. Over the past year, Starbucks has added employees to stores during rush times and invested in technology to better manage the sequencing of in-store and mobile orders. The company has also redesigned stores to create a cozier, coffeehouse atmosphere with additional seating and warmer lighting.
CEO Brian Niccol characterized the quarter as pivotal in a video message accompanying the earnings announcement, saying “This was the quarter our momentum became truly measurable.” The company’s efforts to improve staffing, coaching and store routines appear to be driving traffic growth in both morning and afternoon periods. Morning traffic has recovered to near-2022 levels, according to management disclosures, while the afternoon daypart is emerging as a significant growth opportunity.
Much of the afternoon strength is being fueled by Refreshers, a drink platform that has grown to become a $2 billion revenue contributor for Starbucks. In the fiscal third quarter, Refreshers revenue climbed by a double-digit percentage. The company is also leveraging food innovation and matcha offerings to drive afternoon traffic, supported by digital menu boards that make it easier to promote daytime products.
North America, which represents Starbucks’ most important market, delivered particularly strong performance with comparable store sales up 8.1 percent. Traffic to North American restaurants jumped 4.5 percent, and the average customer check increased 3.5 percent, indicating that customers are visiting more frequently and spending more per visit. Customers have increased spending through several channels, including growth in delivery orders, as well as through purchases of innovative drinks and food items. The company highlighted that its S’mores Cold Brew, featuring marshmallow syrup, marshmallow cream cold foam and a graham cracker topping, proved particularly popular with younger customers and represented one of its strongest limited-time summer offerings in years.
International same-store sales outside the United States increased 5.7 percent, though the company continues to face challenges in certain key markets. The China joint venture structure now represents a shift in Starbucks’ business model, with approximately 90 percent of the company’s international locations operating under a licensed structure. This asset-light model is intended to support more efficient capital deployment and long-term earnings growth.
During the quarter, Starbucks opened 175 net new stores and surpassed its goal of 1,000 cafe renovations, completing that target ahead of schedule. The company is now targeting at least 1,500 store renovations by the end of fiscal 2026 and plans to accelerate those efforts further in the following fiscal year. These cafe makeovers, which average about $150,000 each, have proven instrumental in driving transaction growth through improved customer experiences.
The company’s operating margin expanded significantly during the quarter, growing 430 basis points to 14.4 percent, aided by sales leverage and cost management. Operating performance benefited from a tariff refund that the company received during the fiscal third quarter, which largely offset tariffs paid during the first three quarters of the fiscal year.
Looking ahead to the fourth quarter, Starbucks expects U.S. comparable store sales growth of 6.5 percent or greater, which would position the full fiscal year 2026 to achieve slightly more than 6 percent U.S. comparable store sales growth and global comparable store sales growth nearing 6 percent. The company plans to open approximately 600 to 650 net new coffeehouses globally across company-operated and licensed businesses for the full fiscal year 2026.