Business
Starbucks raises full-year outlook as turnaround takes hold — despite higher gas prices
Starbucks on Tuesday raised its full-year outlook for comparable earnings and same-store sales growth after reporting its second straight quarter of traffic growth.
“This quarter marked a milestone for Starbucks – and the turn in our turnaround,” CEO Brian Niccol said in a video posted alongside the company’s fiscal second-quarter results.
For fiscal 2026, Starbucks said global and U.S. same-store sales are now expected to increase by at least 5%, up from its prior projection of an increase of 3%. Starbucks also raised its forecast for adjusted earnings per share to a range of $2.25 to $2.45 from its previous range of $2.15 to $2.40 per share.
Alarmed by the current war between U.S. and Iran and its effects on fuel, few companies have chosen to hike their outlook for the full year when reporting their quarterly results in recent weeks, making Starbucks an outlier.
Niccol said that higher gas prices haven’t changed the behavior of Starbucks customers yet, although he acknowledged even the company’s higher forecast raise is cautious — relative to its outperformance this quarter.
Shares of Starbucks rose about 5% in extended trading.
Here’s what the company reported for the period ended March 29 compared with what Wall Street was expecting, based on a survey of analysts by LSEG:
- Earnings per share: 50 cents adjusted vs. 43 cents expected
- Revenue: $9.53 billion vs. $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, a year earlier.
Excluding restructuring and impairment costs as well as other items, the company earned 50 cents per share, beating Wall Street expectations.
The company said net sales rose roughly 9% to $9.53 billion.
Starbucks’ global same-store sales, which only includes cafes open at least a year, increased 6.2%, fueled by more visits to its locations. Wall Street was projecting same-store sales growth of 4%, according to StreetAccount estimates.
The company has continued to see similar same-store sales growth into April, Niccol said on the company’s earnings conference call.
North America, the company’s home market, drove most of the quarter’s same-store sales growth. U.S. same-store sales climbed 7.1%, driven by a 4.3% jump in transactions.
It marks the second straight quarter of traffic growth for Starbucks’ U.S. cafes, signaling that the company’s turnaround has taken hold.
Under Niccol, the chain has cut back on discounts and focused instead on luring customers back by improving cafe operations, adding buzzy new menu items and reintroducing seating to its locations.
“We haven’t seen this transaction strength in years,” Niccol said during the company’s earnings call.
Starbucks’ U.S. sales growth came from across its menu, from its new artisanal bakery items to the increasing popularity of protein cold foam, CFO Cathy Smith said.
Outside the U.S., growth was more tepid. International same-store sales rose 2.6%.
China, the company’s second-largest market, weighed on its results, with same-store sales growth of just 0.5%. Starbucks has been leaning on more discounts in China to drive more visits, resulting in 2.1% higher traffic but a 1.6% decline in average spend.
Boyu Capital closed its deal for a majority stake of Starbucks’ China business at the beginning of the fiscal third quarter, Smith said on the call. The alternative asset management firm now holds a 60% interest in a joint venture with Starbucks in the region.
Going forward, Starbucks does not plan to share China’s standalone revenue and same-store sales since it is now considered part of the company’s licensed portfolio, it said.
Stocks mostly advanced in Asia on Wednesday despite losses on Wall Street, while oil prices fell after the United Arab Emirates said it would leave Organisation of the Petroleum Exporting Countries (OPEC) in a blow to the powerful oil cartel.
US futures edged higher. Markets in Japan were closed for a holiday.
Elsewhere in Asia, South Korea’s Kospi rose 0.3 per cent to 6,657.40 and the Hang Seng in Hong Kong gained 1.4 per cent to 26,029.02. The Shanghai Composite index traded 0.3 per cent higher at 4,091.01.
Australia’s S&P/ASX 200 slipped 0.3 per cent, to 8,689.50.
Taiwan’s Taiex lost 0.6 per cent, and India‘s Sensex gained 0.4 per cent.
The price of a barrel of Brent crude oil to be delivered in June fell 0.5 per cent to $110.71 early Wednesday. Brent to be delivered in July dropped 0.6 per cent to $103.74. Brent oil was around $70 per barrel before the war began in late February.
Benchmark US crude fell 0.6 per cent to $99.32 a barrel.
The UAE’s departure from Opec, due to happen on Friday, has been closely watched by oil markets. Opec accounts for roughly 40 per cent of global oil output, and the UAE is one of Opec’s largest oil producers. It has pushed back against Opec production quotas in recent years, wanting to sell more oil to the rest of the world.
“The UAE’s exit will increase (oil) output,” ING Bank strategists Warren Patterson and Ewa Manthey wrote in a research note on Wednesday. “The UAE has been increasingly frustrated over recent years by its output being constrained by Opec production quotas, which have kept it well below its potential.”
But as US-Iran negotiations for a permanent end to the Iran war stalled and the Strait of Hormuz, where roughly one fifth of the world’s oil passed through before the war, was still largely closed, short term impacts on oil prices will still depend mainly on prospects for reopening the waterway, analysts said.
The UAE was the third largest oil producer within Opec before the Iran war. ING said its departure “will reduce Opec’s effectiveness in managing and influencing the global oil market through supply measures.”
Investors are also awaiting more updates on US-Iran peace talks, although limited progress has been made. Iran has offered to reopen the Strait of Hormuz if the United States lifts its blockade on its ports. So far, the US appears to be ruling out a deal that excludes the Islamic Republic’s nuclear programme.
The Federal Reserve is expected to announce a decision on interest rates later Wednesday.
On Tuesday, Wall Street retreated from its recent record highs. The benchmark S&P 500 fell 0.5 per cent from its latest all-time high to 7,138.80. The Dow Jones Industrial Average edged down 0.1 per cent to 49,141.93, and the technology-heavy Nasdaq composite dropped 0.9 per cent to 24,663.80.
Artificial intelligence-related stocks led the losses. Chip company Broadcom lost 4.4 per cent, Nvidia fell 1.6 per cent and Micron Technology lost 3.9 per cent. Alphabet, Amazon, Microsoft and Meta Platforms are reporting quarterly results on Wednesday.
In other dealings early Wednesday the US dollar rose slightly to 159.63 Japanese yen from 159.62 yen. The euro was trading at $1.1708, down from $1.1712.
The yield on the US 10-year Treasury remained at 4.35 per cent.
New Delhi: Maruti Suzuki had a record year in 2025-26 in terms of revenue and sales, but rising costs took a bite out of profits. The automaker posted consolidated revenue of over Rs 1.8 lakh crore, up 19.9% from the previous year, with total sales of 24.2 lakh vehicles. Net profit, however, barely moved – rising 1.2% to Rs 14,680 crore – as higher material, employee and depreciation costs ate into margins.The March quarter told a similar story: Revenue jumped 28.6% to Rs 52,462 crore, but net profit slipped 6.4% to Rs 3,659 crore.R C Bhargava, chairman, Maruti Suzuki India, said the auto industry is back in a growth phase, helped by stronger consumer demand and govt support, including lower taxes on small cars. He said Maruti expects to roll out about 2.5 lakh more vehicles this year as supply bottlenecks ease and new capacity comes online. The bigger constraint right now, he said, is not whether people want to buy cars but how many the company can actually make. Maruti is adding new production lines that will bring roughly 5 lakh additional units of annual capacity this year.
Several warning lights are flashing that have some wondering whether we are in the foothills of another financial crisis.
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