Starbucks reported Q1 fiscal year 2026 results on January 28, 2026, showing global comparable store sales increased 4% with consolidated net revenues up 6% to $9.9 billion. However, GAAP operating margin contracted 290 basis points to 9.0%, primarily driven by labor investments and inflationary pressures including elevated coffee pricing and tariffs. GAAP earnings per share declined 62% to $0.26, while non-GAAP EPS declined 19% to $0.56. The company classified its China retail operations as held for sale, resulting in a 61.7% effective tax rate. On February 1, Citi analyst Jon Tower lowered the price target from $94 to $92 and reiterated a Neutral rating, citing continued uncertainty around the company's recovery. Additionally, Starbucks India losses nearly doubled to 1.5 billion rupees despite expansion efforts, and the company faces operational challenges including consumer boycotts in the Middle East.
Read full analysisStarbucks reported Q1 fiscal year 2026 results on January 28, 2026, showing global comparable store sales increased 4% with consolidated net revenues up 6% to $9.9 billion. However, GAAP operating margin contracted 290 basis points to 9.0%, primarily driven by labor investments and inflationary pressures including elevated coffee pricing and tariffs. GAAP earnings per share declined 62% to $0.26, while non-GAAP EPS declined 19% to $0.56. The company classified its China retail operations as held for sale, resulting in a 61.7% effective tax rate. On February 1, Citi analyst Jon Tower lowered the price target from $94 to $92 and reiterated a Neutral rating, citing continued uncertainty around the company's recovery. Additionally, Starbucks India losses nearly doubled to 1.5 billion rupees despite expansion efforts, and the company faces operational challenges including consumer boycotts in the Middle East.
Starbucks is the world's largest coffeehouse chain, operating over 41,000 stores across more than 80 countries, with the U.S. and China comprising 61% of its global footprint. Under CEO Brian Niccol, the company is executing a 'Back to Starbucks' turnaround plan that showed early traction with 4% comparable store sales growth last quarter. Today's decline reflects broad consumer discretionary weakness compounded by lingering questions about margin recovery and international profitability.