Starbucks Hands in Its ‘Report Card’: Global Comparable-Store Sales Grow for Five Consecutive Quarters

Editor’s Note (coffeeyo.com): Starbucks released its fiscal Q4 and full-year 2026 results: global comparable-store sales grew for the fifth consecutive quarter and fundamentals recovered markedly; its China retail business was deconsolidated this fiscal year, with a Boyu Capital fund holding a 60% controlling stake. Yet the upbeat numbers failed to win over the secondary market, and the stock slipped in after-hours trading following the report.

Daily Economic News reporter: Ding Zhouyang; intern: Li Ruo; Daily Economic News editor: Dong Xingsheng

On October 30 (Beijing time), Starbucks released its fiscal Q4 2026 and full-year financial reports. This was also its first full-year report after completing the shift of its China retail business from company-operated to a licensed joint-venture model — though it is a transitional-period report card, as China’s business was still consolidated in the first half of the fiscal year and was only formally deconsolidated from the third quarter onward.

For this global coffee giant, it is a report card showing markedly repaired fundamentals: global comparable-store sales achieved five straight quarters of growth, margins kept improving, and notably Starbucks’ North American home base became the core engine of this recovery.

But the strong operating numbers did not move the secondary market; after the results were announced, Starbucks’ share price fell in after-hours trading. The market’s divergence of views centered on the conservative guidance disclosed in the report — a roughly 1% year-on-year decline in fiscal 2027 revenue — creating a tension between improving profitability and revenue-growth pressure. On the analyst call after the release, analysts also made this guidance a central line of questioning.

China business deconsolidated

The most fundamental reporting change in this earnings report comes from the China market.

In November 2025, Starbucks officially announced a partnership with China’s Boyu Capital. A Boyu Capital fund holds a 60% controlling stake in the joint venture, while Starbucks retains 40%; Starbucks’ China stores shifted from company-operated to franchised.

Reflected in the fiscal 2026 results (September 29, 2025 – September 27, 2026): in the first quarter, Starbucks classified its China retail business as “held for sale”; in the third quarter it completed the conversion to the licensed joint-venture model, recording a US$536.3 million pre-tax gain; Starbucks now holds a 40% stake in the China business, accounted for under the equity method as investment income, and it is no longer consolidated. As a result, the International segment’s fiscal Q4 2026 net revenue was US$1.3 billion, down 37% year on year.

Deconsolidation does not mean contraction. Starbucks chairman and CEO Brian Niccol assessed on the earnings call: “The China business over-delivered on its targets.” Starbucks CFO Cathy Smith then said: “Starbucks has guided roughly 1,200 net new stores globally in fiscal 2027, of which about 1,100 are net new internationally, with China contributing roughly half.” By this measure, Starbucks China is expected to add about 550 net new stores in fiscal 2027. The North American market is expected to add about 100 net new stores in fiscal 2027 — showing that Starbucks China remains the engine of the company’s international expansion, only the way it is measured has changed.

Brian Niccol said: “Beyond fiscal 2027, we see enormous room for expansion outside North America; international stores could grow from the current ~23,000-plus to nearly 40,000 over the long term. That includes the potential to double store counts in markets such as China and India, with steady growth in other regions as well.” According to the guidance Cathy Smith disclosed, the international market will be the main driver of store growth in fiscal 2027, with net new international store openings up nearly 50% versus fiscal 2026 — equivalent to opening about 3 stores a day.

Brady Brewer, head of Starbucks’ international business, said: “International delivered another strong year; excluding China (which has its own dynamics and deconsolidation noise), international revenue has grown 5% for seven consecutive quarters. The global team has performed exceptionally well, and I’m very excited about the growth opportunities ahead, especially in Japan.”

On the wholly owned Japan business, Brady Brewer was also explicit: “Our consistent posture is to continually evaluate the most appropriate operating equity structure. If the timing is right to adjust in the future, we will disclose it externally.” In other words, a joint venture for the Japan business is not off the table; Starbucks’ asset-light joint-venture transformation is not confined to China and could extend to other core overseas markets.

The U.S. coffee market is also fiercely competitive

Back at Starbucks’ U.S. home base, the “Back to Starbucks” plan remains the core thread of its domestic market and determines its foundation.

“This recovery plan, originally meant to reverse declining traffic, has now been upgraded from a fix-it scheme to a long-term domestic growth engine,” Brian Niccol said on the call. In fiscal Q4 2026, U.S. same-store sales rose 7.7% year on year — the fifth straight quarter of positive same-store growth — and the membership system hit a new high, with 36 million 90-day active Starbucks Rewards members. Both traffic and average ticket contributed to growth, spanning different income tiers, generations and dayparts.

Supporting this round of North American recovery were not a large number of new store openings, but two moves: optimizing the existing store base and standardizing service. In fiscal 2026, Starbucks completed its North American store-structure optimization and closed 250 underperforming stores; the “Green Apron Service” standard was fully rolled out across company-operated North American stores, shortening order-wait times and improving throughput; the store-refresh program ran ahead of schedule, finishing more refreshed stores by fiscal year-end than originally targeted, rebuilding the café’s sense of community and lingering appeal.

Notably, this is not a simple “cost-cutting for efficiency.” “We invested resources to expand store staffing and optimize labor deployment and scheduling,” Starbucks’ management explained. In the program’s launch phase, Starbucks invested over US$500 million cumulatively in store labor and scheduling optimization, adding baristas during peak hours; it first increased labor investment to lift the service experience, then relied on traffic and repeat purchases to dilute per-unit costs — a path of trading experience for growth, and growth for efficiency.

At the same time, menu innovation is also a key lever for domestic growth. Brian Niccol said on the call that the company is building a pipeline of iteratively refreshed new products — functional beverages, zero-sugar drinks, high-protein meals and portable items — targeting all-daypart consumption scenarios. Cold drinks, matcha and tea — non-coffee categories — are the core vehicles for opening the afternoon daypart. This healthy, all-daypart, non-coffee-category-expanding thinking is also the common evolution direction of the global coffee-chain industry.

On the call, Starbucks executives also mentioned practices already familiar to many domestic consumers — such as scenario-based operations and the Starbucks App integrating delivery. “We must rely on product innovation to strengthen the sense of consumption ritual and create more attractive store scenarios, thereby driving up the attach rate of surrounding merchandise,” an executive said.

Thus China’s coffee market is fiercely competitive, and the U.S. is no walk in the park either. Chains built around the drive-thru model are expanding rapidly, continuously siphoning traffic with high-value, quick-pickup formats; fast-food, convenience-store and bottled-coffee brands are also grabbing coffee share. Starbucks management proactively lowered its fiscal 2027 North America same-store sales guidance to about 4%.

Niccol repeatedly emphasized that the core goal of the domestic market is not to chase endless growth rates, but to stabilize the brand’s foundation, defend margins, and solidify the “Back to Starbucks” recovery into a sustainable operating capability. The company’s domestic and overseas operations form two differentiated growth paths: overseas, it unlocks expansion potential through asset-light, joint-venture empowerment; the U.S. home base, with over 16,000 stores, focuses on deepening the existing base and cautiously adding stores, prioritizing profitability.

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