Starbucks Q1 revenue beats expectations on China sales boost

Overview

• Coffeehouse chain's fiscal Q1 revenue rose 6% to $9.9 bln, beating analyst expectations

• Non-GAAP EPS for fiscal Q1 missed analyst estimates

• Global comparable store sales increased 4%, driven by higher transactions and ticket size

Outlook

• Starbucks projects fiscal year 2026 EPS between $2.15 and $2.40

• Company expects global and U.S. comparable store sales growth of 3% or greater

• Starbucks plans to open 600 to 650 net new coffeehouses globally

Result Drivers

• GLOBAL SALES GROWTH - Starbucks reported a 4% increase in global comparable store sales, driven by a 3% rise in transactions and a 1% increase in average ticket

• CHINA SALES BOOST - China saw a 7% rise in comparable store sales, driven by a 5% increase in transactions and a 2% increase in average ticket

• MARGIN CONTRACTION - Operating margins contracted due to labor investments and inflationary pressures, including elevated coffee pricing and tariffs

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 19 "strong buy" or "buy", 15 "hold" and 5 "sell" or "strong sell"

• The average consensus recommendation for the restaurants & bars peer group is "buy"

• Wall Street's median 12-month price target for Starbucks Corp is $95.00, about 0.8% below its January 27 closing price of $95.72

• The stock recently traded at 37 times the next 12-month earnings vs. a P/E of 32 three months ago

Press Release: ID:nBw7z4cmka

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