Adjusted earnings of 80 cents a share beat estimates. Revenue slipped because Starbucks' China business is moving into a joint venture, and the company expects sales to fall about 1% next fiscal year even as profit guidance edged past forecasts. The stock was flat after hours.
Starbucks customers are coming back. Starbucks' reported revenue is going down. Both are true, and the reason is a change in how the company owns its China business.
For its fiscal fourth quarter, Starbucks reported adjusted earnings of 80 cents a share, above the 71 cents analysts expected. Global comparable-store sales rose 7.2%, and North American comparable sales 7.9%.
Revenue fell 4% to $9.1 billion, short of the $9.22 billion expected. The decline reflects the conversion of Starbucks' China operations into a joint venture.
The outlook
For fiscal 2027, Starbucks expects adjusted earnings of $3.15 to $3.25 a share, against analysts' $3.14, and revenue down about 1%.
The reaction
Starbucks shares had risen 2.24% to $105.51 during Thursday's regular session, and were unchanged in extended trading.
What the numbers say about the consumer
A 7.9% gain in North American comparable sales is strong for a mature chain. It compares with 2.1% at Chipotle, whose results earlier this week showed transactions up 0.8%. The two reports together suggest spending on food away from home has not collapsed, though it is uneven across brands.
The shrinking revenue line is mostly a matter of structure rather than demand, and the stock was unchanged after hours.
Turnaround or treadmill?
The turnaround view: comparable sales are growing at a high single-digit pace, earnings beat, and the profit outlook is slightly above forecasts.
The treadmill view: reported revenue is falling, next year's sales are guided lower, and the earnings outlook barely clears expectations.
What to watch
Comparable-sales growth in the December quarter, margins as the China change takes effect, and holiday-season traffic across restaurant chains.