SBUX · Q2 2026 Earnings

Q: Question about dramatic operational improvements over past 3-4 quarters, runway remaining for ops improvements to drive comps, and performance update on original Green Apron service pilot stores versus base.

Management highlighted that 60% of stores still not achieving 'four shots' on growth scorecard, indicating significant runway. Only ~300 stores have received uplifts so far with ramping to 1,000+ by year-end and 8,000+ stores in 'very short order.' Continued improvements in labor deployment, technology support, and supply chain alignment expected to drive further upside.

Q: Two-part question on margin dynamics: impact of innovation on cost of goods, expectation that this cost pressure might persist, and why EPS guide raise was more conservative than expected given the significant comp beat; also inquired about supply chain cost savings anticipated in future quarters.

Management explained EPS flow-through conservatism due to macro caution despite strong top-line results. Coffee elevation cost ~$1/pound year-over-year but expected to abate back half. Tariff impacts running through inventory with similar expectation for relief in H2. Labor and menu performance improvements offsetting some cost pressures. Better flow-through expected in back half as both pressures diminish.

Q: Asked for quarterly comp cadence and April trends given gas prices; also requested clarification on EPS guidance with 5%+ comps and what metrics would be needed to reach top end versus bottom end of range.

Strength seen throughout Q2 with month-over-month improvement in growth scorecard performance and throughput. April continues to show strength in operating performance and consumer behavior resilient to macro headwinds. For EPS, top-line needed to lean toward 'plus' side of 5%+; also require coffee prices to abate, fuel impact monitoring, and innovation COGS tightening. Range $2.25-$2.45.

Q: Question on rewards program redesign rolled out in March (showing limited benefit in Q2 but rewards membership grew anyway); asked for April color on acceleration or disruption from program changes.

Management stated rewards membership actually grew despite program overhaul, bucking typical Q2 seasonal pattern. Frequency increasing early, customers taking advantage of new 60-star redemption ($2 off). Program designed around engagement, personalization, and recognition rather than discounting. Three-tier structure with exclusive merch access performing well.

Bullish

Starbucks

Reported April 28, 2026

30-second summary

30-second take: Revenue grew 8.8% YoY to $9.53B with global comps +6.2% (transactions +3.8%, ticket +2.3%) — a sharp acceleration from Q1's +4% and the first quarter of consolidated margin expansion since Q1 FY2024 at 9.4% non-GAAP operating margin (+120bps YoY as reported, +110bps constant currency). Management raised FY2026 non-GAAP EPS to $2.25–$2.45 (from $2.15–$2.40) and lifted the global comp floor to 5%+ (from 3%+). The FY revenue guide was restated from "similar rate to global comp growth" to "roughly flat year over year" — this is an accounting reset driven by the Boyu China JV deconsolidation (JV closed in April, post-quarter), not a demand-driven cut: management expects H2 China-related revenue to be "less than 20% of what we would have previously reported with China as company operated." The operating story is the cleanest it's been in two years; the revenue line is now structurally smaller for accounting reasons while the underlying comp guide was raised.

Headline numbers

EPS

Q2 FY2026

$0.50

Revenue

Q2 FY2026

$9.53B

+8.8% YoY

Gross margin

Q2 FY2026

66.3%

Operating margin

Q2 FY2026

8.7%

Key financials

Q2 FY2026

Metric	Q2 FY2026	YoY	Q1 FY2026	QoQ
Revenue	$9.53B	+8.8%	$9.91B	-3.9%
EPS	$0.50	—	$0.56	-10.7%
Gross margin	66.3%	—	67.0%	-70bps
Operating margin	8.7%	—	9.0%	-30bps

Guidance

Starbucks raised FY2026 EPS guidance and global comp-sales expectations sharply, but lowered full-year revenue guidance to flat growth due to China deconsolidation, offsetting operational strength with structural headwinds.

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Global comparable store sales growth	Q2 FY2026	3% or greater	6.2%	+320 basis points above low end of guidance range	Beat
North America comparable store sales growth	Q2 FY2026	3% or greater	7.1%	+410 basis points above low end of guidance range	Beat

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Non-GAAP EPS	FY2026	$2.15 to $2.40	$2.25 to $2.45	+$0.10 at midpoint (from $2.275 to $2.35)	Raised
Global comparable store sales growth	FY2026	3% or greater	5.0% or greater	+200 basis points (from 3% to 5% floor)	Raised
Consolidated net revenues	FY2026	similar rate to global comp growth	roughly flat year over year	Downgraded from 3%+ growth (prior) to flat growth (now)	Lowered

Reaffirmed unchanged this quarter: Non-GAAP consolidated operating margin (slightly improve year over year), Net new coffeehouses globally (600 to 650)

Segment performance

Q2 FY2026

Segment	Q2 FY2026	YoY
North America	$6.894B	+6.5%
International	$2.051B	+9.9%
Channel Development	$0.568B	+38.8%

Platform metrics

Q2 FY2026

Segment	Q2 FY2026
Global Comparable Store Sales Growth	6.2%
Comparable Transactions Growth	3.8%
Average Ticket Growth	2.3%
North America Comparable Store Sales Growth	7.1%
International Comparable Store Sales Growth	2.6%
China Comparable Store Sales Growth	0.5%
Total Store Count	41,129

Profitability

Q2 FY2026

Segment	Q2 FY2026
Non-GAAP Operating Margin	9.4%

Management tone

Operational fix in flight → "the plan is working" → turnaround validated with transactions positive → operating model declared repeatable.

For three quarters Niccol has been climbing a confidence ladder. Q4 FY2025 was "the plan is working" with comps barely positive. Q1 FY2026 was "proof the strategy is working" with U.S. transactions inflecting after eight quarters. This quarter Niccol shifted to declaring the operating model itself sustainable: "This is the Starbucks we're building, the Starbucks customers deserve, the Starbucks our partners are proud to call theirs, and the Starbucks we believe will deliver strong performance quarter after quarter." The framing has moved from event-driven inflection ("transactions turned positive") to durability ("quarter after quarter"). Two years of defensive posture has resolved into something close to an operating thesis.

The earnings-vs-revenue sequencing call has now been retired. Three quarters ago management said "grow the top line first and earnings will follow." This quarter Niccol said: "Q2 marked a milestone for the business. We delivered growth on both the top and bottom line for the first time in more than two years." Margin expanded 120bps YoY as reported (110bps constant currency) despite Green Apron labor still annualizing, coffee elevation of ~$1/lb, and tariff pass-through still in inventory. The bridge from "earnings will lag" to "earnings are following" closed faster than management had been signaling — but it is also why the EPS raise was conservative relative to the comp beat (a point Sarah Senator at Bank of America pressed in Q&A).

International has flipped from drag to breadth signal. Q3 FY2025: U.S. transactions -4%, China just inflecting to +2%. This quarter: "All 10 of our largest international markets, including China, Japan, South Korea, and Mexico, delivered positive comps for the first time in nine quarters." The nine-quarter-streak break is the kind of detail management does not volunteer unless they want it remembered. China at +0.5% looks weak headline but is being lapped against the JV transition mechanics, and management framed the future JV structure as "margin accretive, with roughly half of its revenues flowing to operating income" — a meaningful change from the consolidated-company-operated drag of a year ago.

Hedging language remains, but it is narrower and now pointed at named, time-boxed risks. "While market dynamics can change, we expect these tariff and coffee pressures to moderate in the back half" — a far cry from last year's blanket "recoveries are not always linear." The new hedges are macro-specific (gas prices, tariffs, coffee), not strategy-specific. Niccol's "path forward will not be linear, but it is clear the changes we're making and the momentum we're building are starting to compound" is the closest he has come to declaring the inflection durable.

Recurring themes management leaned on this quarter:

Transaction-driven growth acceleration after three yearsInternational market recovery across all major marketsGreen Apron Service operational execution and customer experience improvementMenu innovation and afternoon daypart expansionStarbucks Rewards program redesign driving loyalty and engagementChina transition to JV structure and portfolio reset

Risks management surfaced:

Heightened macro uncertainty and consumer behavior impact from current environmentProduct and distribution cost increases from tariffs and coffee price inflationNorth America margin contraction from Green Apron investments and legal accrualsInternational margin growth partially from temporary held-for-sale accounting benefit in ChinaChina deconsolidation reducing reported consolidated revenues by more than 80% YoY

Q&A highlights

Brian Harbor · Morgan Stanley

Inquiry about service time metrics (4-4-12 targets), whether employees feel they're hitting targets, impact of algorithm changes on SmartQueue, and how scheduled ordering will further improve service times, particularly for mobile order pickup.

Management confirmed 80% of stores are hitting or exceeding 4-4-12 metrics (4 min cafe, 4 min drive-thru, <12 min mobile pickup). Scheduled ordering expected to improve mobile order performance by making queues more predictable. Algorithm improvements continue to optimize order sequencing based on customer location proximity.

80% of stores hitting or exceeding 4-4-12 service time targetsScheduled ordering rollout underway to improve mobile order pickup timesSmartQueue algorithm being continuously refined with higher transaction levels

David Tarantino · Baird

Question about dramatic operational improvements over past 3-4 quarters, runway remaining for ops improvements to drive comps, and performance update on original Green Apron service pilot stores versus base.

Management highlighted that 60% of stores still not achieving 'four shots' on growth scorecard, indicating significant runway. Only ~300 stores have received uplifts so far with ramping to 1,000+ by year-end and 8,000+ stores in 'very short order.' Continued improvements in labor deployment, technology support, and supply chain alignment expected to drive further upside.

~60% of stores still below 'four shots' performance levelOnly 300 stores have received uplifts; ramping to 1,000+ by year-endPlan to expand across 8,000+ stores in near termGreen Apron service model rolled out ~1 year ago (by August)

Sarah Senator · Bank of America

Two-part question on margin dynamics: impact of innovation on cost of goods, expectation that this cost pressure might persist, and why EPS guide raise was more conservative than expected given the significant comp beat; also inquired about supply chain cost savings anticipated in future quarters.

Management explained EPS flow-through conservatism due to macro caution despite strong top-line results. Coffee elevation cost ~$1/pound year-over-year but expected to abate back half. Tariff impacts running through inventory with similar expectation for relief in H2. Labor and menu performance improvements offsetting some cost pressures. Better flow-through expected in back half as both pressures diminish.

Coffee cost elevation ~$1/pound year-over-year in first halfTariff impacts expected to roll through inventory quicklyBoth coffee prices and tariff implications expected to improve in back halfSequential quarterly labor improvements continuing in U.S. company-owned stores

Lauren Silberman · Deutsche Bank

Asked for quarterly comp cadence and April trends given gas prices; also requested clarification on EPS guidance with 5%+ comps and what metrics would be needed to reach top end versus bottom end of range.

Strength seen throughout Q2 with month-over-month improvement in growth scorecard performance and throughput. April continues to show strength in operating performance and consumer behavior resilient to macro headwinds. For EPS, top-line needed to lean toward 'plus' side of 5%+; also require coffee prices to abate, fuel impact monitoring, and innovation COGS tightening. Range $2.25-$2.45.

Consistent strength all quarter with month-to-month scorecard improvementStores achieving 'four shots' growing meaningfullyApril continues strength trends from Q2EPS guidance range: $2.25-$2.45

Peter Sala · BTIG

Question on rewards program redesign rolled out in March (showing limited benefit in Q2 but rewards membership grew anyway); asked for April color on acceleration or disruption from program changes.

Management stated rewards membership actually grew despite program overhaul, bucking typical Q2 seasonal pattern. Frequency increasing early, customers taking advantage of new 60-star redemption ($2 off). Program designed around engagement, personalization, and recognition rather than discounting. Three-tier structure with exclusive merch access performing well.

Rewards membership grew despite March rolloutFrequency metrics increasing in early April resultsNew 60-star redemption at $2 threshold gaining tractionThree-tier rewards structure (gold, reserve, black) with exclusive merchandise access

Answers to last quarter's watch list

Does U.S. comp growth sustain at or above 3% in Q2 as Green Apron labor annualizes? Decisively yes. North America comps came in at +7.1% with transactions +4pts — Niccol's "strongest transaction growth in three years" comment. The print is nearly 2x the FY 5%+ guide, and underlying performance (stripping the Q1 sales-transfer benefit) accelerated. Status: Resolved positively

Does H2 non-GAAP operating margin expand enough to deliver "slight improvement" YoY? Q2 already delivered +120bps YoY margin expansion (as reported) to 9.4% — five quarters earlier than the "earnings will lag revenue" framing implied. Management reaffirmed "slightly improve YoY" for the FY, but Q2's print suggests the FY could exceed that bar unless H2 inflates investment. The $2B cost program was not quantified by quarter in the call. Status: Resolved positively

Boyu China JV regulatory approval timing and consolidation impact. JV closed in April after quarter end; deconsolidation begins Q3. The FY revenue guide language ("China related revenues to be less than 20% of what we would have previously reported with China as company operated") reflects the consolidation transition built into the new FY framework, and the JV is described as "margin accretive, with roughly half of its revenues flowing to operating income." Status: Resolved (closing achieved)

Coffee and tariff cost pressure peak timing. Management confirmed coffee cost elevation of ~$1/lb YoY in the first half and tariff pass-through still in inventory, with both expected to moderate in the back half — consistent with the Q1 framing. This is the swing factor for the $2.45 high end of the FY EPS guide. Status: Continue monitoring

Rewards membership growth and non-rewards conversion. Management disclosed rewards membership grew despite the March program overhaul, breaking the typical Q2 seasonal dip, with early April frequency increases and engagement on the new 60-star redemption tier. No rewards revenue mix disclosed. The discount-driven acquisition shift is showing early positive signal. Status: Resolved positively

Channel Development momentum. +38.8% YoY this quarter — nearly double Q1's +19.8% and the fourth straight quarter of acceleration. Management still provided no margin or product mix detail on the segment. Status: Resolved positively (on growth; disclosure gap persists)

650-pilot-store outperformance durability. Tarantino's Q&A exchange reframed this: management disclosed only ~300 stores have received "uplifts" so far with 1,000+ by year-end and 8,000+ in near-term scope, while ~40% of the system is still below "four shots" performance. The pilot-vs-fleet gap is closing as system-wide replication progresses, but the uplift rollout remains early. Status: Continue monitoring

What to watch into next quarter

Does North America comp hold above +5% in Q3, or does Q2's +7.1% prove to be a Green Apron rollout pull-forward? The FY 5%+ floor and the $2.45 EPS high end both require the second half to print in the +5% range. A Q3 NA comp below +4% would call into question whether the new operating model is repeatable as Niccol claimed, versus a one-quarter inflection on the back of pilot-store outperformance.

Does H2 non-GAAP operating margin sustain expansion as Green Apron labor continues to flow and the $2B cost program ramps? Q2 delivered +120bps YoY as reported. The FY "slightly improve" reaffirmation looks conservative on this trajectory. Watch whether Q3 margin holds above 9.4% (signaling structural leverage) or compresses (signaling Q2 had one-time helpers like the ~$118M China held-for-sale accounting benefit Smith called out as temporary and concluded at start of Q3).

First consolidation-to-equity-method P&L cut from the closed Boyu China JV. With the JV closed in April and Q3 the first reporting period under the new structure, watch for the step-down in reported China revenue, the magnitude of the anticipated gain on transaction, and any quantified equity-method income contribution from the retained 40% stake.

Coffee and tariff cost relief evidence in Q3 gross margin. Management has staked the H2 EPS swing on these pressures moderating. Q3 gross margin holding above Q2's 66.3% would confirm relief is materializing; compression below 65% would put the $2.45 high end out of reach.

Channel Development margin and product mix disclosure. Four consecutive quarters of accelerating growth (+38.8% in Q2) without any margin or product mix detail is now a meaningful disclosure gap. Watch whether management — or analysts — force any segment color in Q3.

Green Apron rollout pacing: does the 300 → 1,000+ → 8,000+ store ramp hit the year-end milestone? Tarantino exposed that ~40% of the fleet is still below "four shots" performance. The pace of system-wide rollout is the single best leading indicator of whether Q2's +7.1% NA comp is replicable. Watch for an updated count on the Q3 call.

Sources

Starbucks Q2 FY2026 press release / 8-K Exhibit 99.1, filed April 28, 2026 — https://www.sec.gov/Archives/edgar/data/829224/000082922426000078/sbux-03292026xearningsrele.htm
Starbucks Q2 FY2026 earnings conference call transcript, April 28, 2026
Starbucks Q1 FY2026 press release / 8-K Exhibit 99.1, filed January 28, 2026 (for prior-period comparison)

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