Starbucks forecasts fiscal 2027 earnings above analyst estimates

A profit beat with a revenue miss

Fourth-quarter global comparable sales rose 7.2%, topping analysts' expectations of a 5.4%, according to Hospitality Ireland. Adjusted earnings per share came in at 80 cents, ahead of a 72-cent consensus. Non-GAAP earnings rose 54%. U.S. comparable sales climbed 7.7%, ahead of management's guidance of 6.5% or better. Non-GAAP operating margin widened by roughly 450 basis points to 14%. Revenue, though, fell about 4.5% to $9.1 billion. That was short of the roughly $9.2 billion analysts expected.

Growth did slow. Global comparable sales rose 7.9% in the fiscal third quarter, so the fourth-quarter figure is a step down. Shares slipped about 2% in after-hours trading.

Why revenue shrank while the business grew

During the third quarter of fiscal 2026, Starbucks moved its China retail operations into a licensed joint venture with Boyu Capital. It converted nearly 8,000 company-operated coffeehouses into licensed stores. It now books royalties and product sales from those shops instead of full sales.

North America revenue grew 6% to $7.3 billion in the fourth quarter. The structure change also shapes the outlook. Starbucks forecast fiscal 2027 revenue would decline about 1%, against analysts' expectations of a 1.4% increase.

Closures, charges and the remodel bill

Starbucks said in September it would close 250 more cafes in North America. That is about 1% of its 18,000 regional locations. Chief operating officer Mike Grams said the chain had identified sites with no path to acceptable financial performance. The company expects the restructuring to generate roughly $300 million in associated charges. The company will offer affected employees transfers to nearby stores where possible. It will give severance to those who cannot move.

The store count is already drifting. Starbucks had 18,371 North America locations last quarter, against 18,734 a year earlier. It still plans at least 1,500 coffeehouse "uplifts" by the end of fiscal 2026.

Traffic or ticket?

In fiscal Q4, U.S. average ticket rose 5.2%, while transactions grew 2.4%. Earlier in the year, transactions grew faster: 4.3% in Q2 and 4.2% in Q3. Starbucks has spent nearly $500 million on labor investments tied to the overhaul.

What happens next

Fiscal 2027 will be a 53-week year. Starbucks guided North America comparable sales growth to about 4%. Brian Niccol said the coming year will have a focus on tech and modernisation, listing as examples an AI system to assist baristas in taking drive-through orders, as well as systems that could "recognise participating customers as they arrive, present personalised digital menus and make payment more effortless."