Starbucks Sees Positive First Quarter Results
Starbucks had a solid start to its fiscal year, with festive drinks and popular Bear Cups contributing to a surge in sales.
From October to December, same-store sales—those from locations open for a year or longer—rose by 4%, exceeding Wall Street’s anticipated increase of 2.3%, based on analyst surveys by FactSet.
The U.S. market followed suit, also posting a 4% rise in same-store sales. Transaction volume went up by 3%, and customer spending per visit increased by 1%. This marked the company’s best performance in the U.S. in a couple of years.
On Wednesday, Starbucks’ stock climbed by 2%.
Brian Nicol, the company’s Chairman and CEO, pointed to these results as a sign that their turnaround strategy is gaining traction.
Over the past year, Starbucks has been ramping up its workforce and upgrading its equipment to enhance service speed and improve mobile ordering. They’re also in the process of renovating stores to make them more inviting—around 200 have already been updated, with plans for over 1,000 more by fall.
Nicol confidently stated on a conference call with investors, “We have a plan, we are committed to the plan, and the plan is working.” He added that they’re working on revitalizing the brand both domestically and internationally.
However, Nicol did warn that not all progress may be consistent. Despite this, the company is hopeful for better sales as the year unfolds. They project global same-store sales and revenue to rise by more than 3% in fiscal 2026, especially after a decline of 1% last year.
According to Nicol, Starbucks recorded its highest profits during the first week of the holiday season. One highlight was the $29.95 Bearista cup, which quickly sold out after its release. As an example of its popularity, a Bearista Cup was listed on eBay for $119.99 shortly thereafter.
Interestingly, foot traffic in the U.S. remained high, even with a strike involving over 1,000 unionized employees who aimed to disrupt the traditionally busy Red Cup Day. Since 2018, the company has offered free reusable cups to customers who buy holiday drinks on that day. Although the strike led to the temporary closure of some locations, it didn’t have a lasting impact.
Some U.S. stores even saw more customers following Starbucks’ closure of about 600 locations in North America back in September, as resources are being redirected to support higher-performing outlets.
Starbucks enjoyed a successful quarter in China too, with same-store sales up by 7%. Not long ago, the company announced a new partnership with Chinese investment firm Boyu Capital, which will manage Starbucks stores in China. Under this agreement, Boyu will acquire a 60% stake in Starbucks’ retail operations there, valued at approximately $4 billion, while Starbucks retains a 40% share and continues to own its brand.
Revenue for the quarter showed a 6% increase, reaching $9.9 billion, which surpassed Wall Street’s expectations of $9.65 billion.
However, the company noted that profits are under pressure not just from coffee tariffs but also due to investments in its workforce. Chief Financial Officer Kathy Smith mentioned that some of these costs are expected to decrease as the year progresses.
In another notable move, President Trump announced the elimination of U.S. tariffs on various products, including beef, coffee, and tropical fruits, which could ease some financial burdens.
When adjusted for one-time expenses, Starbucks reported earnings of 56 cents per share for the quarter, which fell short of Wall Street’s anticipated 59 cents.
