Starbucks Corporation SBUX is scheduled to release third-quarter fiscal 2026 results on July 29.
The Zacks Consensus Estimate for SBUX’s third-quarter fiscal 2026 earnings per share (EPS) is pegged at 66 cents, indicating a 32% increase from 50 cents reported in the prior-year quarter. The consensus mark for earnings has witnessed upward revisions in the past 30 days.
SBUX earnings missed the Zacks Consensus Estimate in three out of the trailing four quarters and beat on one occasion, with an average miss being 4.6%.
The consensus mark for third-quarter fiscal 2026 revenues is pegged at $9.44 billion, indicating a 0.2% decrease from the year-ago quarter’s reported figure.
Q3 Earnings Whispers for SBUX Stock
Our proven model does not predict an earnings beat for Starbucks this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.
SBUX’s Earnings ESP: Starbucks has an Earnings ESP of -2.19%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Starbucks Zacks Rank: The company currently carries a Zacks Rank of #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Starbucks Corporation Price and EPS Surprise
Starbucks Corporation price-eps-surprise | Starbucks Corporation Quote
Factors Likely to Influence Starbucks’ Q3 Results
Starbucks' third-quarter fiscal 2026 top line is likely to have benefited from sustained growth in customer traffic, reflecting continued execution of its "Back to Starbucks" strategy. Management indicated that positive comparable-sales momentum extended into April, supported by transaction growth across all dayparts, with morning traffic recovering to near-2022 levels.
Investments in Green Apron Service, improved staffing, faster service and enhanced store execution are also expected to have encouraged repeat visits. Meanwhile, continued strength in delivery, which management described as an incremental revenue stream, and the rollout of scheduled mobile-order pickup are likely to have supported higher sales by improving convenience and order efficiency.
Revenues are also likely to have benefited from Starbucks' product innovation, marketing initiatives and stronger customer engagement. The company highlighted robust demand for its new energy Refreshers, mango-flavored beverages and customizable caffeine options, while Cold Foam and premium beverage offerings continued to gain popularity.
Seasonal beverage launches and merchandise for summer, coupled with record Starbucks Rewards membership and rising customer visit frequency, are expected to have further supported comparable sales. In addition, coffeehouse upgrades across key markets and improving sales trends in international markets, including Japan, South Korea and China, are likely to have provided an additional boost to revenue growth.
Despite the positive momentum, Starbucks' top line is likely to have faced headwinds from an uncertain macroeconomic environment, which management said could weigh on consumer spending as higher fuel costs and inflationary pressures persist. Additionally, following the completion of the Starbucks China transaction, the company began recognizing only licensing revenues from China rather than company-operated sales, creating a significant drag on reported consolidated revenues despite healthy underlying demand.
The Zacks Consensus Estimate for Channel Development revenues is pegged at $558 million, compared with $484 million reported in the prior year quarter. On the other hand, the company-operated stores revenues are pegged at $7520 million, down 3.8% year over year.
Starbucks' bottom line is likely to have benefited from improved operating leverage driven by stronger comparable-sales growth and continued progress under its $2 billion cost-savings program. The company also expects coffee and tariff-related cost pressures to moderate during the second half of fiscal 2026, while organizational streamlining should keep general and administrative expenses under control. Furthermore, Starbucks' transition to a China joint-venture licensing structure is expected to have supported profitability through higher-margin licensing income, helping offset ongoing investments in its Green Apron Service initiative.
SBUX Stock’s Price Performance & Valuation
Shares of Starbucks have gained 9.3% in the past year against the industry’s decline of 7.9%. In the same time frame, SBUX has also outperformed the other industry players McDonald's Corporation MCD, Dutch Bros Inc. BROS and Chipotle Mexican Grill, Inc. CMG, respectively.
Price Performance
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From a valuation standpoint, SBUX trades at a forward price-to-earnings (P/E) multiple of 35.13, above the industry’s average of 22.13. Conversely, industry players, such as McDonald's, Dutch Bros and Chipotle, have P/E multiples of 19.44, 58.5 and 22.13, respectively.
P/E (F12M)
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Investment Considerations for SBUX Stock
The company continues to make encouraging progress through its turnaround strategy, with improving customer traffic, stronger product innovation, expanding loyalty engagement and ongoing operational improvements supporting the long-term outlook.
However, near-term uncertainty remains, as the earnings prediction model does not point to a likely earnings beat and reported revenues could be affected by the accounting impact of the China business restructuring despite healthy underlying demand. In addition, the stock continues to trade at a premium valuation relative to much of the restaurant industry, leaving limited room for disappointment if results or guidance fall short of expectations.
Given these factors, existing investors may benefit from staying invested to monitor the company's execution, while prospective investors may find it prudent to wait for the earnings announcement and management's updated outlook before initiating new positions.
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Starbucks Corporation (SBUX): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).