Starbucks 8-K

NegativeEarningsNew guidance

China retail’s held-for-sale shift for the Boyu Capital JV drove a tax-rate spike; labor investment, coffee prices and tariffs squeezed margins.

Filed 2026-01-28 07:46 ET

Summary

Q1 FY2026 results with newly introduced FY2026 guidance. Revenue and comparable sales grew, led by transactions, while operating margin and earnings declined. Starbucks classified its China retail operations as held for sale as it advances a joint venture with Boyu Capital: Boyu may acquire up to 60%, Starbucks will retain 40% and license its brand and intellectual property, and closing is expected in spring 2026 subject to regulatory approvals.

Key Figures

Metric Q1 FY2026 Q1 FY2025 Y/Y
Net revenue $9.92B $9.40B +5.5%
Operating income $891M $1.12B -20.6%
GAAP operating margin 9.0% 11.9% -290 bp
Non-GAAP operating margin 10.1% 11.9% -180 bp
Net earnings attributable to Starbucks $293M $781M -62.4%
GAAP diluted EPS $0.26 $0.69 -62.3%
Non-GAAP diluted EPS $0.56 $0.69 -18.8%
Operating cash flow $1.60B $2.07B -22.9%
  • Global comparable store sales rose 4%, driven by transactions up 3% and average ticket up 1%; U.S. comparable sales also rose 4%, while China rose 7%.
  • GAAP margin pressure reflected labor investments, elevated coffee prices and tariffs. The 61.7% GAAP effective tax rate, vs 23.6%, primarily reflected tax effects from the China held-for-sale classification and a prior-year tax item; the non-GAAP rate was 26.8%, up 320 bp.
  • Quarter-end cash was $3.41B vs $3.22B at FY2025 year-end. Starbucks declared a $0.62-per-share dividend, payable 2/27/2026 to holders of record 2/13/2026.

Guidance

Metric Period Guidance Prior Direction
Global and U.S. comparable store sales growth; consolidated net revenue growth FY2026 3% or greater; revenue growth at a similar rate — Initiated
Non-GAAP consolidated operating margin FY2026 Slightly improve Y/Y — Initiated
Non-GAAP diluted EPS FY2026 $2.15-$2.40 — Initiated
Net new coffeehouses, company-operated and licensed FY2026 ≈600-650 — Initiated

The outlook assumes China retail operations remain company-operated in H2 FY2026. Starbucks said it would provide additional business-outlook information on its quarterly earnings call.

Investor Takeaways

  • Q2 comparable sales and operating-margin trends will indicate whether transaction-led growth is translating into stronger earnings.
  • Regulatory approvals and the expected spring 2026 closing remain the next milestones for the China retail joint venture.

The summary is written by an AI model reading the filing.

Model 005 · prompt 01d34d48e3

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