Starbucks Q4 Earnings Miss Estimates, Revenues Increase Y/Y

Core Insights - Starbucks Corporation (SBUX) reported mixed results for the fourth quarter of fiscal 2025, with earnings per share (EPS) missing estimates while net revenues exceeded expectations [1][3][9] Financial Performance - EPS for the fourth quarter was 52 cents, missing the Zacks Consensus Estimate of 55 cents by 23.1%, and down 35% from 80 cents in the prior-year quarter [3][9] - Net revenues reached $9.57 billion, surpassing the consensus mark of $9.33 billion by 2.6%, and increased by 5.5% from $9.1 billion in the same quarter last year [3][9] Comparable Store Sales - Global comparable store sales rose by 1% year over year, supported by a 1% increase in comparable transactions [4][9] Store Operations - The company closed 107 net stores in the fourth quarter, bringing the total to 40,990 stores [4] Margin Analysis - Non-GAAP operating margin contracted by 500 basis points to 9.4% from the prior-year quarter, primarily due to restructuring costs, inflation, and increased labor investments [5][9] - North America segment's operating margin fell by 1420 basis points to 4.5% from 18.7% in the prior-year quarter [7] - International segment's operating margin decreased by 410 basis points to 10.8% [8] - Channel Development segment's operating margin contracted by 800 basis points to 48.9% [10] Segment Performance - North America segment net revenues were $6.9 billion, up 3% year over year, with comparable store sales at breakeven [6] - International segment net revenues increased by 9% to $2.07 billion, with comparable store sales up 3% [7][8] - Channel Development segment net revenues rose by 17% to $542.6 million, driven by contributions to the Global Coffee Alliance [10] Fiscal Year Highlights - For fiscal 2025, net sales were $37.2 billion compared to $36.2 billion in fiscal 2024 [11] - Non-GAAP operating margin for fiscal 2025 was 9.9%, down from 15% in the previous year [11] - Non-GAAP EPS for fiscal 2025 was $2.13, compared to $3.31 in the prior year [11] Cash and Debt Position - The company ended the fourth quarter with cash and cash equivalents of $3.21 billion, down from $3.29 billion at the end of fiscal 2024 [12] - Long-term debt totaled $14.6 billion, up from $14.3 billion as of the end of fiscal 2024 [12] Dividend Declaration - Management declared a quarterly cash dividend of 62 cents per share, payable on November 28, 2025 [13]