Starbucks' third quarter results were met with a negative market reaction, as the company missed revenue expectations due to a year-over-year sales decline largely tied to the transition of its China business to a licensed model. Management attributed the quarter’s performance to continued growth in both customer visits and spending in North America, where the rollout of new menu items, digital engagement, and operational improvements such as the Green Apron Service led to higher same-store sales. CEO Brian Niccol emphasized that “the business is on really strong footing, and it’s driven by operational health,” highlighting the impact of improved store execution and product innovation.
Is now the time to buy SBUX? Find out in our full research report (it’s free for active Edge members).
Starbucks (SBUX) Q3 CY2026 highlights:
- Revenue $9.14 billion vs S&P analysts’ estimates of $9.23 billion (4.5% year-on-year decline, 0.9% miss)
- Adjusted EPS $0.80 vs S&P analysts’ estimates of $0.71 (13.4% beat)
- Adjusted EPS guidance $3.20 at the midpoint for fiscal 2027, beating analyst estimates by 2.3%
- Operating margin 10.8%, up from 2.9% in the same quarter last year
- Locations 41,607 at quarter end, up from 40,990 in the same quarter last year
- Same-store sales rose 7.2% year on year (1% in the same quarter last year)
- Market capitalization $118.2 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our top 5 analyst questions from Starbucks’s Q3 earnings call
- Brian Harbour (Morgan Stanley) questioned the 4% same-store sales outlook. CEO Brian Niccol emphasized confidence in fundamentals and digital engagement, noting comp strength is “coming through the fundamentals.”
- Danilo Gargiulo (Bernstein) asked about 2027 margin drivers and cost savings. CFO Cathy Smith explained ongoing progress on the $2 billion cost savings program, with further benefits expected from supply chain and operational changes.
- David Palmer (Evercore ISI) inquired about U.S. unit growth and drive-thru technology impact. Niccol highlighted new store prototypes and early positive feedback, expecting higher unit growth and throughput improvements after pipeline reset.
- Sara Senatore (Bank of America) pushed for details on sales transfer from store closures and ticket vs. transaction growth. Smith clarified that attach and mix remain key drivers, while Niccol pointed to transaction strength underpinning guidance.
- Andrew Charles (TD Cowen) sought clarification on comp cadence and new product platforms. Smith described efforts to smooth seasonality, and Niccol cited upcoming protein and afternoon-focused food and beverage platforms.
Catalysts in upcoming quarters
In the coming quarters, key areas to monitor include (1) the pace of North American transaction growth and the effectiveness of new menu and digital initiatives, (2) the rollout and customer adoption of technology upgrades like AI-powered ordering and drive-thru enhancements, and (3) the acceleration of international store openings—especially progress toward doubling the presence in China and India. The ability to execute on cost savings and supply chain improvements will also be a critical marker for sustained margin expansion.
Starbucks currently trades at $103.70, down from $105.39 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).
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