Starbucks Corporation SBUX raised its fiscal 2026 outlook after stronger comparable sales and margin performance in the third quarter. The higher targets offer the clearest test yet of whether the company’s turnaround is becoming financially durable.
Better traffic, ticket growth and operating leverage support the recovery case. Labor spending, restructuring charges and uneven cost comparisons still leave the company with a demanding execution task.
Starbucks Raises the Bar for 2026
Management now expects U.S. comparable sales growth slightly above 6% for fiscal 2026, up from its previous forecast of at least 5%. Global comparable sales growth is projected to approach 6%, while fourth-quarter U.S. comparable sales are expected to increase at least 6.5%.
Starbucks Corporation Price and Consensus
Starbucks Corporation price-consensus-chart | Starbucks Corporation Quote
Starbucks also raised adjusted earnings guidance to $2.55-$2.65 per share from $2.25-$2.45. Consolidated net revenues are projected to be flat to slightly higher, and non-GAAP operating margin is expected to exceed 11%. Delivering those targets would show that improving demand is translating into a more visible earnings path.
SBUX Sales Momentum Broadens
Third-quarter global comparable sales increased 7.9%, driven by 4.2% transaction growth and 3.5% ticket growth. Management said the gains extended across income groups, dayparts and access points, while delivery and food attachment supported North America’s 8.1% comparable-sales increase.
This broader demand base matters because a recovery led by transactions and customer engagement may be more sustainable than one driven mainly by price. Dutch Bros Inc. BROS, a drive-thru beverage operator and franchisor, also competes for beverage occasions, while McDonald’s Corporation MCD uses a largely franchised global restaurant model. Both provide relevant benchmarks as Starbucks works to improve traffic and operating consistency.
Starbucks Margins Begin to Recover
GAAP operating margin expanded 60 basis points year over year to 10.5% in the third quarter. Non-GAAP operating margin increased 430 basis points to 14.4%, supported by sales leverage, lower inflation, tariff refunds and lower product, distribution, depreciation and administrative expenses.
Not all of the improvement should be treated as recurring. Tariff refunds helped the quarter, and the China business transition changed the reported revenue and margin mix. More repeatable gains will depend on maintaining transaction growth while converting higher sales into operating profit.
SBUX Still Faces Cost and Restructuring Risks
Labor investments, unfavorable product mix and restructuring costs continued to offset part of the operating improvement. Restructuring and impairment expenses increased to $302.6 million from $20.8 million a year earlier as Starbucks reshaped its support organization, facilities and store portfolio.
Commodity and tariff volatility add another layer of uncertainty. Management indicated that reciprocal tariff refunds largely offset related tariffs during the first nine months, making some third-quarter cost comparisons less representative of underlying operations. Sustained margin conversion will therefore be a key indicator in coming periods.
Starbucks Signals Back the Recovery With Limits
The raised outlook strengthens the case that Starbucks’ earnings recovery is progressing, but it does not remove the need for consistent execution. Traffic must remain healthy, cost savings must offset turnaround spending and margin gains must become less dependent on temporary benefits.
The stock currently carries a Zacks Rank #3 (Hold). It also has a Growth Score of A, Momentum Score of A, VGM Score of B and Value Score of D. The favorable growth and momentum readings reflect improving operating and estimate trends, while the weaker value reading suggests that durable earnings delivery is important to support the stock’s premium valuation. The combination favors a measured view rather than an aggressive call. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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