Highlights

  • Starbucks reported year-over-year revenue growth but recorded a decline in quarterly profitability.
  • Higher labor spending and rising input costs weighed on margins during the quarter.
  • Full-year guidance pointed to modest revenue and comparable sales growth expectations.

Starbucks (NASDAQ:SBUX) shares slipped 0.6% on Wednesday after the company released its first-quarter fiscal 2026 earnings report, which showed mixed financial performance. While the coffee chain exceeded analyst expectations on revenue, weaker profitability limited investor confidence.

For the quarter ended January 2026, Starbucks reported net revenue of USD 9.9 billion, representing a 6% increase compared with the same period last year. Revenue growth was supported by a 4% rise in global comparable store sales, reflecting expansion across both U.S. and international markets. Analysts had forecast revenue slightly above USD 9.6 billion, placing the reported figure ahead of consensus estimates.

Earnings Decline Weighs on Sentiment
Despite higher revenue, profitability declined sharply during the quarter. GAAP net income fell to USD 293 million, down from nearly USD 781 million in the first quarter of fiscal 2025. On an adjusted basis, earnings came in at USD 0.56 per share, compared with USD 0.69 per share a year earlier. Analysts had expected adjusted earnings of approximately USD 0.59 per share.

The company attributed the earnings decline to increased labor investments associated with its “Back to Starbucks” initiative, along with inflation-related pressures. Higher coffee input costs and tariff-affected expenses also contributed to margin compression during the quarter.

Store Performance and Cost Factors
Starbucks reported growth across both domestic and international store portfolios during the period. However, higher operating expenses offset gains from increased store traffic and sales volumes. Labor investments aimed at improving in-store operations played a central role in cost escalation, alongside elevated commodity prices.

Recent store closures and prior quarters of uneven performance have kept investor expectations cautious, even as the company continues to focus on operational adjustments.

Fiscal 2026 Outlook Points to Moderate Growth
Looking ahead, Starbucks issued guidance for the full fiscal year 2026, forecasting net revenue growth of approximately 3% compared with fiscal 2025. Comparable store sales are also expected to rise at a similar pace.

The company plans to open an estimated 600 to 650 net new stores during the year. Adjusted earnings for fiscal 2026 are projected in the range of USD 2.15 to USD 2.40 per share, compared with USD 2.13 per share reported in fiscal 2025.

While the quarterly results showed stability in sales growth, the earnings miss and cost pressures remained key factors influencing the stock’s modest decline during the trading session.

Share Performance
SBUX shares closed at USD 95.16 on January 28, 2026, declining 0.59% during the session