Starbucks Serves Up A Shot Of Turnaround

Starbucks gave investors something Tuesday night that tasted a lot better than another turnaround promise. The company reported fiscal second-quarter net revenue of $9.5 billion, up 9% from a year earlier, with GAAP earnings of $0.45 per share and non-GAAP earnings of $0.50 per share. Global comparable store sales rose 6.2%, driven by a 3.8% increase in comparable transactions and a 2.3% increase in average ticket. For a company that has spent the past couple of years trying to convince Wall Street its coffeehouse comeback is real, this was the kind of quarter that did not need extra foam to look better.

The stronger signal came from North America, where comparable store sales rose 7.1%, including a 7.1% gain in the U.S. That matters because Starbucks has not just been fighting a revenue problem. It has been fighting a customer experience problem — slower service, frustrated customers, store-level strain, and a brand that sometimes felt as if it had turned ordering coffee into a group project with a pickup shelf. This quarter suggested Brian Niccol’s “Back to Starbucks” plan is starting to do something investors can actually measure, with U.S. comparable transactions up 4.3% and average ticket up 2.7%.

The margin picture gave the report another shot of credibility. Starbucks said GAAP operating margin expanded 180 basis points to 8.7%, while non-GAAP operating margin expanded 120 basis points to 9.4%. That is not a finished comeback, especially with labor investments, tariffs, and elevated coffee prices still pressuring parts of the business. North America operating income actually fell from a year earlier, and the company said segment margin contracted because of labor investments, product mix, and inflation. But investors were not looking for perfection in a green apron. They were looking for proof that better traffic and better discipline could show up in the same cup.

Starbucks also raised its fiscal 2026 outlook, now expecting global and U.S. comparable store sales growth of 5% or greater and non-GAAP earnings per share of $2.25 to $2.45. The company still expects consolidated net revenue to be roughly flat for the year, so this is not a victory lap with a whipped-cream mountain on top. But after months of trying to sell investors on a reset, Starbucks finally delivered a quarter with enough traffic, earnings growth, and guidance lift to make the turnaround look like something customers are actually buying before work.

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