Why Is Starbucks (SBUX) Up 4.5% Since Last Earnings Report?

Core Viewpoint - Starbucks reported mixed Q1 fiscal 2026 results, with earnings missing estimates but revenues exceeding expectations, indicating a potential for sustainable growth driven by the "Back to Starbucks" strategy [3][4]. Financial Performance - Earnings per share (EPS) for Q1 fiscal 2026 were 56 cents, missing the Zacks Consensus Estimate of 58 cents, and down 19% from 69 cents in the prior-year quarter [5]. - Net revenues reached $9.91 billion, surpassing the consensus mark of $9.64 billion, reflecting a year-over-year increase of 5.5% [5]. - Global comparable store sales increased by 4% year over year, supported by a 3% rise in comparable transactions and a 1% increase in average ticket [6]. Segment Analysis - North America segment net revenues were $7.28 billion, up 3% year over year, with comparable store sales rising 4% [8]. - International segment net revenues increased by 10% year over year to $2.06 billion, with comparable store sales up 5% [9]. - Channel Development segment net revenues grew by 20% year over year to $522.7 million, driven by contributions to the Global Coffee Alliance [10]. Margin and Cost Analysis - Non-GAAP operating margin contracted by 180 basis points to 10.1% due to increased labor costs and inflationary pressures [7]. - North America operating margin decreased by 480 basis points to 11.9%, while the International segment's operating margin improved by 100 basis points to 13.7% [8][9]. Financial Position - The company ended Q1 with cash and cash equivalents of $3.41 billion, up from $3.22 billion at the end of the previous quarter [11]. - Long-term debt remained stable at $14.6 billion [11]. Future Outlook - Starbucks anticipates global and U.S. comparable store sales to rise at least 3% in fiscal 2026, with overall net revenues expected to increase at a similar pace [12]. - Non-GAAP EPS is projected to be between $2.15 and $2.40, with plans to open approximately 600 to 650 net new locations [13].