In brief
For the 13‑week quarter ending September 27, Starbucks saw revenue fall 4.5% YoY to $9.14 billion while net income surged 408.8% to $677.2 million, largely because a sharp decline in restructuring and impairment costs offset declines in China. Global comparable sales rose 7.2%, and the company plans to open 1,200 new coffeehouses worldwide, projecting a modest 1% revenue decline in fiscal 2027.
On October 29, 2026, Starbucks announced that for the 13‑week quarter ended September 27, its revenue fell 4.5% year‑on‑year to $9.14 billion, while net income exploded 408.8% to $677.2 million. The surge, according to Xinhua, was primarily due to a sharp reduction in restructuring and impairment costs.
Reuters style data from Xinhua report that net income attributable to Starbucks rose to $677.2 million from $133.1 million a year earlier. Diluted earnings per share climbed from $0.12 to $0.59, and non‑GAAP adjusted EPS rose 53.8% to $0.80. Operating income jumped 256.5% to $991.8 million from $278.2 million, expanding the operating margin from 2.9% to 10.8%.
Revenue decline was mainly attributed to the conversion of Starbucks’ retail operations in China to a licensed joint‑venture model. Xinhua noted that the international segment recorded a 37% drop in revenue, falling to $1.31 billion. The move restructuring of China operations was a significant factor behind that decline.
In contrast, global comparable coffeehouse sales rose 7.2% during the quarter, driven by a 5.2% increase in average ticket and a 1.8% lift in comparable transactions. North America performed strongly: comparable sales grew 7.9%, with the United States alone up 7.7%. Revenue from the North American segment increased 6% to $7.33 billion. The international comparable sales, however, rose only 0.9%.
Starbucks opened a net 303 new coffeehouses in the quarter, bringing its global store count to 41,607 at the end of September. The company’s plan is to open a net 1,200 new coffeehouses worldwide during fiscal 2027.
Looking ahead, Xinhua and The Star both reported that Starbucks expects revenue to decline approximately 1% in fiscal 2027, largely due to the ongoing transition of its China stores to the licensed joint‑venture structure. The company projects about 4% growth in North American comparable sales and anticipates a modest decline in international revenue tied to its restructuring in China.
For the full fiscal year 2026, Starbucks reported a 2% rise in total revenue, reaching $37.91 billion, and a 36.1% increase in net income to $2.53 billion. Diluted earnings per share climbed from $1.63 to $2.21.
Open questions remain about the long‑term impact of Starbucks’ strategic shift in China. Analysts and investors are watching how the licensed joint‑venture model will affect revenue and profitability in the increasingly competitive Chinese market. The company’s forecast of a 1% decline in revenue for fiscal 2027 raises questions about the sustainability of that figure if China’s market conditions shift, or if cost reductions from restructuring are not fully carried forward.
Another area of uncertainty involves the 1,200 new coffeehouses the company plans to open. While expansion has supported growth in North America, the company’s ability to replicate that success globally, especially amid a period of restructuring in China and a shift toward a joint‑venture model, could impact future earnings. There is also curiosity about whether the significant jump in operating income and margin achieved in Q4 will persist in the face of broader economic conditions and the company’s focus on new store openings.
In sum, while Starbucks’ Q4 saw a notable revenue dip, it simultaneously achieved a record net income figure thanks largely to reduced restructuring expenditures. The company’s strategic pivot in China, combined with planned global expansion, sets the stage for a complex fiscal 2027, with modest revenue decline projected but strong potential upside from continued growth in the U.S. and a more mature joint‑venture structure in China.
