starbucks on Tuesday raised its full-year outlook for comparable profit and same-store sales growth after reporting a second consecutive quarter of growth in store traffic.
“This quarter was a milestone for Starbucks and a turning point in our recovery,” CEO Brian Nicol said in a video posted with the company’s second-quarter results.
Starbucks said global and U.S. same-store sales in fiscal 2026 are expected to increase at least 5%, up from the previously expected 3% increase. Starbucks also raised its adjusted earnings per share forecast to a range of $2.25 to $2.45 per share, from the previous range of $2.15 to $2.40.
Concerned about the current war between the U.S. and Iran and its impact on fuel, few companies have opted to upgrade their full-year outlooks in their quarterly earnings releases in recent weeks, making Starbucks an outlier.
Nicol said higher gas prices have not yet changed the behavior of Starbucks customers, but acknowledged that even the company’s higher expected price hikes would be cautious over this quarter’s results.
Starbucks stock rose about 5% in after-hours trading.
Here’s how the company reported for the period ended March 29, compared to Wall Street expectations, based on a survey of analysts by LSEG.
Earnings per share: 50 cents adjusted, 43 cents expected; Revenue: $9.53 billion, $9.16 billion expected.
Starbucks reported fiscal second quarter net income attributable to the company of $510.9 million, or 45 cents per share, up from $384.2 million, or 34 cents per share, in the year-ago period.
Excluding restructuring charges, impairment charges and other items, the company earned 50 cents per share, beating Wall Street expectations.
Net sales rose about 9% to $9.53 billion, the company said.
Starbucks’ global same-store sales, which includes only cafes open for at least a year, increased 6.2% due to increased store traffic. Wall Street had expected same-store sales to rise 4%, according to Street Account estimates.
Nicol said in the earnings conference that the company’s same-store sales continued to grow at a similar pace in April.
The company’s home region of North America drove most of the same-store sales growth in the quarter. US same-store sales increased 7.1%, driven by a 4.3% increase in transaction value.
This is the second consecutive quarter of increased customer traffic at Starbucks’ U.S. cafes, and shows that the company’s turnaround has taken hold.
Under Nicol, the chain cut back on discounts and instead focused on luring customers back by improving cafe operations, adding trendy new menu items and reintroducing seating in stores.
“I haven’t seen trading this strong in years,” Nicol said at the company’s earnings conference.
Starbucks’ U.S. sales growth is driven by its entire menu, from new artisanal bakery items to the growing popularity of protein cold foam, CFO Kathy Smith said.
Outside the United States, growth was slower. Overseas same-store sales increased by 2.6%.
China, the company’s second-largest market, weighed on its performance, and same-store sales growth was only 0.5%. Starbucks has focused on increasing discounts in China to increase visitor numbers, resulting in a 2.1% increase in traffic but a 1.6% decline in average spend.
Mr. Smith said on the conference call that Boyu Capital completed the transaction for a majority stake in Starbucks’ China operations early in the fiscal third quarter. The alternative asset management company currently holds a 60% interest in the joint venture with Starbucks in the region.
Starbucks is now considered part of the company’s licensed portfolio and will no longer share any standalone revenue or same-store sales in China.
