A little more chatter around the espresso bar. A few more people lingering over laptops. And, crucially for investors, more transactions.
Starbucks reported a rebound in traffic and same-store sales in its fiscal first quarter, a sign that the sweeping changes CEO Brian Niccol has been making since taking the reins are beginning to take hold. The company said global same-store sales rose 4% and U.S. and North America comps also improved by 4% — the first positive reading in two years — while China outperformed with a 7% lift. You can read the company’s official release here: Starbucks Reports Q1 Fiscal Year 2026 Results.
The numbers that matter (and the ones that worry)
Revenue beat expectations, landing at about $9.9 billion, but profit measures lagged. Adjusted earnings per share came in at $0.56, shy of the roughly $0.59 analysts expected. Management says the shortfall reflects deliberate investments: more baristas, fuller cafes, and a quieter menu after a significant trimming.
For fiscal 2026 Starbucks laid out a new range for adjusted EPS of $2.15 to $2.40 and expects global and U.S. same-store sales growth of at least 3% for the year. Those targets are conservative compared with the company’s suspended long-term framework from late 2024, but management framed the quarterly results as proof that the “back to Starbucks” approach is working.
Small touches, big message
Since Niccol arrived he’s tried to pull the brand away from a singular focus on throughput and mobile-only convenience and back toward the in-store experience that made Starbucks a cultural staple. That has meant strategic reversals — fewer menu items to speed handoffs, baristas encouraged to write on cups again, and a redesign push to make cafés feel cozier.
Menu experiments are central to the pitch: items like protein cold foam and the viral “Bearista Cup” have helped win attention from regulars and occasional customers alike. Niccol told TV interviewers the turnaround is "just the beginning," and executives say more product innovation (including health-and-wellness offerings and an “afternoon” platform) plus rewards and digital upgrades are coming.
The company has also leaned into tech and platform partnerships to deepen engagement — it was among the launch partners when Google rolled out a digital gift-card shop, a move that expands where customers buy Starbucks credit and could feed incremental sales through third-party app ecosystems. See more on that initiative in our coverage of Google's digital gift-card shop. At the same time, Starbucks is eyeing improvements to its app and loyalty program that mirror broader trends in consumer tech; those shifts sit alongside experiments in smarter booking and discovery tools, which resemble recent developments in agentic booking tools from major platforms.
Margin pain now, hopes for recovery later
Investing in people and place has a cost. The extra labor and store refreshes weighed on margins in the quarter even as sales momentum picked up. Management argues the trade-off is intentional: better service and atmosphere should drive higher frequency and customer lifetime value over time.
Analysts will watch how quickly margins normalize. Niccol’s team is asking investors to be patient — the playbook is layered and slow to show full returns, but the early signs (rising transactions and improved comps) give the company cover to continue the rollout.
China deal and global strategy
In China, Starbucks posted outsized comps and has recently completed a transaction selling a majority stake in its China business to Boyu Capital in a deal valuing the unit around $4 billion. The partnership is pitched as a growth lever: local capital and know‑how, Starbucks says, will help it expand into more cities and tailor experiences for regional customers while preserving the brand’s global standards.
The investor day and the next chapter
Starbucks planned an investor day to lay out a refreshed long-term outlook and show how the company expects to hit sustained targets. The firm had paused its long-term guidance after Niccol’s arrival; now executives are trying to show a credible path from the present investments to a more profitable future — a path that hinges on sustained traffic growth, successful menu rollouts, and a loyalty/digital strategy that keeps customers returning.
If the last quarter is any guide, Niccol’s gamble—trading some near-term profit for a restored café experience and stronger long-term demand—has started to produce the traffic Starbucks desperately wanted. Whether that momentum matures into recurring, margin-accretive growth will determine if this feels like a genuine turnaround or merely a blip. For now, the sound of clinking spoons and longer lines suggests the coffee giant has at least bought itself another shot at getting the brew right.