Starbucks stock enters fiscal 2027 with stronger margins

Starbucks reported a stronger operating finish to fiscal 2026 on October 29, with improving customer demand and wider margins supporting CEO Brian Niccol's turnaround plan. The company said its fourth-quarter global comparable coffeehouse sales rose 7.2% for the 13 weeks ended September 27, 2026, according to the Starbucks investor release.

North America led the improvement. Comparable sales increased 7.9%, with transactions up 2.7% and the average ticket up 5.0%. In the United States, comparable sales rose 7.7%, reflecting a 2.4% increase in transactions and a 5.2% increase in the average ticket. Starbucks said product mix, food attachment, pricing and higher delivery sales contributed to the ticket growth.

Margins Improve as Sales Recover

Fourth-quarter consolidated revenue fell 4.5% to 9.14 billion US dollars, mainly because Starbucks shifted its China retail operations to a licensed joint venture model. The reported decline therefore does not fully reflect underlying demand in the continuing business. North America revenue increased 6.2% to 7.33 billion US dollars, while international revenue declined 36.9% to 1.31 billion US dollars.

Profitability improved substantially. GAAP operating margin expanded to 10.8% from 2.9% a year earlier, while non-GAAP operating margin increased to 14.0% from 9.5%. GAAP diluted earnings per share rose to 0.59 US dollars from 0.12 US dollars. Non-GAAP earnings per share reached 0.80 US dollars, up 54% year over year.

The margin expansion included lower restructuring costs and sales leverage. Starbucks also recorded a 536.3 million US dollar pretax gain from the China divestiture in fiscal 2026, an item excluded from its non-GAAP presentation.

Fiscal 2027 Starts With Lower Revenue

Starbucks expects consolidated revenue to decline by approximately 1% in fiscal 2027, including about 700 million US dollars related to the 53rd week. The company guided to North America comparable sales growth of approximately 4.0%, a non-GAAP operating margin of 13.5% to 14.0% and non-GAAP earnings per share of 3.15 to 3.25 US dollars. It also expects roughly 1,200 net new coffeehouses worldwide, led by international markets.

Management presented the guidance as a continuation of the turnaround rather than a retreat from growth. Niccol said the Back to Starbucks plan had moved from a turnaround plan to a growth plan, while CFO Cathy Smith pointed to the increased dividend and the planned resumption of share repurchases in fiscal 2027.

The board declared a quarterly dividend of 0.63 US dollars per share. The payment is scheduled for November 27, 2026, to shareholders of record on November 13.

Analysts Focus on Customer Spending

Morgan Stanley raised its 12- to 18-month price target to 116 US dollars from 115 US dollars after the results. In an article published by the Lexington Herald-Leader, the firm said the quarter offered a clearer view of underlying margin improvement. The report said Morgan Stanley expected first-quarter fiscal 2027 comparable sales growth of about 5%.

For investors, the central question is whether higher tickets can continue to combine with transaction growth after pricing and menu mix helped lift demand. The China transition lowers reported revenue, while the margin recovery and North American momentum provide the main operating support for fiscal 2027.

US equities remain the broader market backdrop; investors can follow the Nasdaq Composite for the wider technology-heavy market.

More news and analyses on Starbucks stock are available on the company topic page.