Loading...
01/10 16:38
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary presents a mixed outlook. The Q2 revenue growth and store expansion are positives, but the significant EPS decline and lack of detailed guidance are concerns. The Q&A highlights management's strategic focus and innovation, but also reveals uncertainties about cost offsets and margin recovery timelines. The absence of specific guidance and the cautious outlook from management suggest limited immediate upside, leading to a neutral sentiment.
Total Company Net Revenue $9.5 billion, with a global comparable store sales decline of 2%. The decline was attributed to the early stages of a turnaround in the U.S. and strategic investments in the 'Back to Starbucks' strategy.
Global Operating Margin 10.1%, a contraction of 650 basis points from the prior year. This was primarily driven by deleverage and investments in the 'Back to Starbucks' strategy, including additional labor hours and Leadership Experience 2025.
Earnings Per Share (EPS) $0.50, down 45% from the prior year. The decline reflects expense deleverage and investments in labor and Leadership Experience 2025.
China Comparable Store Sales 2% growth, driven by a 6% improvement in transactions. The growth was attributed to successful product innovation, a strong integrated marketing campaign, and outsized delivery growth.
Delivery Business Transaction Growth More than 25% year-over-year, indicating strong incremental growth.
Canada Sales Comp Growth Low single digits, driven by product innovation, particularly in food.
Hourly Partner Turnover 49.1%, indicating improved partner engagement.
Shift Completion Record 98.2%, reflecting operational improvements.
Customer Connection Scores Improved quarter-over-quarter and year-over-year, driven by better speed, hospitality, and accuracy.
Non-Rewards Customer Transaction Growth Year-over-year growth for the first time since the post-pandemic recovery, indicating renewed customer engagement.
College and University License Business Sales Growth Low double digits year-over-year, showing renewed brand love from younger customers.
Drive-Thru Service Times Under 3 minutes and 20 seconds on average, meeting service time goals across more than 7,600 drive-thru coffeehouses.
Mobile Order and Pay Accuracy Improved with SmartQ technology, leading to a double-digit improvement in cafe orders handed off in under 4 minutes.
International Segment Revenue More than $2 billion in quarterly revenue for the first time ever, driven by strong performance in markets like the U.K. and Mexico.
Channel Development Segment Revenue Growth 10% year-over-year, due to higher revenue in the Global Coffee Alliance.
Protein Cold Foam: Starbucks plans to introduce protein cold foam in late Q4 2025, offering 15 grams of protein with no added sugar for cold beverages.
Artisanal Baked Case and 1971 Dark Roast Coffee: In early 2026, Starbucks will launch a reimagined artisanal baked case and a bold new 1971 dark roast coffee.
Coconut Water-Based Beverages: Testing of new coconut water-based tea and coffee beverages will begin in select markets in July 2025.
Gluten-Free and High-Protein Food Options: Starbucks will test gluten-free and high-protein food options to expand its menu offerings.
China Market Growth: China achieved its third consecutive quarter of revenue growth with 2% comparable sales growth and 6% transaction growth in Q3 2025.
International Revenue Milestone: Starbucks' International business posted over $2 billion in quarterly revenue for the first time.
Latin America Expansion: Mexico is nearing the 1,000-store milestone, contributing to double-digit growth in system sales, revenue, and operating income in Latin America.
Green Apron Service: Starbucks is rolling out its Green Apron Service, a new operating model to improve customer service and operational standards, across all U.S. company-operated coffeehouses by mid-August 2025.
SmartQ Technology: SmartQ, an advanced order sequencing algorithm, is being implemented to improve service times and order accuracy.
Coffeehouse Uplift Program: Starbucks is investing $150,000 per store to uplift coffeehouses, aiming to complete 1,000 uplifts across North America by the end of 2026.
Mobile Order and Pickup-Only Concept Sunset: Starbucks plans to phase out its mobile order and pickup-only concept by fiscal 2026, focusing on community coffeehouses.
China Strategic Partnership: Starbucks is evaluating strategic partnership opportunities in China, with interest from over 20 parties, to capture future growth.
Global Comparable Store Sales Decline: The company reported a 2% decline in global comparable store sales, with a similar decline in the U.S. market. This indicates challenges in driving customer transactions and maintaining sales momentum.
Operational Challenges in U.S. Market: The U.S. market is in the early stages of a turnaround, with ongoing efforts to improve customer service, reduce partner turnover, and address operational inefficiencies. High out-of-stock levels and supply chain issues are also impacting operations.
Margin Compression: The operating margin contracted by 650 basis points year-over-year, primarily due to investments in labor, training, and operational changes under the 'Back to Starbucks' strategy. This has led to a significant decline in EPS.
Uncertain Consumer Environment: The company faces an uncertain consumer environment, which could impact transaction growth and overall financial performance in the near term.
High Investment Costs: The company is investing over $0.5 billion in additional labor hours and operational changes, which could strain financial resources and delay profitability improvements.
China Market Risks: While China has shown positive comparable sales growth, the company is still evaluating strategic partnerships in the region, which introduces uncertainty and potential risks to its long-term strategy.
Portfolio Optimization Risks: The company is conducting a comprehensive evaluation of its coffeehouse portfolio, including sunsetting certain formats like mobile order and pickup-only stores. This could lead to short-term disruptions and financial impacts.
Supply Chain and Inventory Issues: High out-of-stock levels and supply chain inefficiencies are affecting the ability to meet customer demand, which could impact customer satisfaction and sales.
Regulatory and Tariff Risks: The company continues to face dynamic tariff environments and coffee price volatility, which could impact cost structures and margins.
Revenue Expectations: Starbucks anticipates continued revenue growth, with a focus on disciplined capital deployment and cost structure improvements. The company is optimistic about its fall platform, including the return of the Pumpkin Spice Latte, and expects 2026 to show further improvement as the Back to Starbucks strategy scales.
Margin Projections: Margins are expected to remain impacted in the near term due to investments in labor and the Back to Starbucks strategy. However, Starbucks is confident that these investments will yield healthier margins over time, supported by cost structure improvements and operational efficiencies.
Capital Expenditures: Starbucks plans to invest over $0.5 billion in additional labor hours over the next year, beginning with the Green Apron Service rollout in mid-August. The company is also focusing on reducing the cost of new store builds and renovations while maintaining a warm and welcoming coffeehouse environment.
Market Trends and Business Segment Performance: Starbucks sees significant growth opportunities internationally, particularly in China, where revenue and comparable store sales have turned positive. The company is also evaluating strategic partnerships in China to capture future growth opportunities. In the U.S., Starbucks is focused on improving customer service and operational efficiency through initiatives like the Green Apron Service and SmartQ technology.
Strategic Plans with Future Implications: Starbucks plans to launch a wave of innovation in 2026, including new menu items, loyalty program enhancements, and digital platform improvements. The company is also working on a new coffeehouse prototype with lower build costs and plans to complete at least 1,000 coffeehouse uplifts across North America by the end of 2026.
Capital Allocation Strategy: Starbucks remains committed to its capital allocation strategy, which includes disciplined capital investment, maintaining a strong balance sheet, and returning cash to shareholders via dividends.
The earnings call reveals strong performance in key areas like the Global Coffee Alliance and at-home coffee categories. The 'Back to Starbucks' strategy is positively impacting customer experience, despite some store closures. The Q&A section highlights optimism in new service models and market expansion. While management avoided specific guidance, the focus on strategic growth, improved customer perception, and transaction growth in younger demographics supports a positive outlook. The lack of detailed guidance is a concern, but overall sentiment leans positive due to operational improvements and strategic initiatives.
The earnings call summary presents a mixed outlook. The Q2 revenue growth and store expansion are positives, but the significant EPS decline and lack of detailed guidance are concerns. The Q&A highlights management's strategic focus and innovation, but also reveals uncertainties about cost offsets and margin recovery timelines. The absence of specific guidance and the cautious outlook from management suggest limited immediate upside, leading to a neutral sentiment.
The earnings call presents mixed signals: revenue growth and strategic investments are positive, but declining margins and EPS are concerning. The Q&A highlights management's focus on technology and staffing improvements, but lacks clarity on financial outlook. The shareholder return plan is vague, and competitive pressures persist. Given these factors, a neutral sentiment is appropriate, with potential for slight positive movement if strategic initiatives yield results.
The earnings call highlights mixed results: a slight revenue increase, but declining margins and EPS. Positive aspects include new store growth and shareholder returns. However, concerns about labor costs, economic factors, and management's unclear responses in the Q&A create uncertainty. The strategic initiatives and optimistic guidance suggest potential long-term growth, but short-term challenges and the lack of clear guidance on key issues balance the sentiment to neutral.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
