Core Viewpoint - Starbucks reported mixed results for Q4 fiscal 2025, with earnings missing estimates while revenues increased year over year, indicating a complex financial landscape for the company [2][4]. Financial Performance - Earnings per share (EPS) for Q4 were 52 cents, missing the Zacks Consensus Estimate of 55 cents by 23.1%, and down 35% from 80 cents in the prior-year quarter [4]. - Net revenues reached $9.57 billion, exceeding the consensus mark of $9.33 billion by 2.6%, and up 5.5% from $9.1 billion in the prior-year quarter [4]. - For fiscal 2025, net sales totaled $37.2 billion, compared to $36.2 billion in fiscal 2024, while non-GAAP EPS fell to $2.13 from $3.31 in the previous year [11]. Comparable Store Sales - Global comparable store sales increased by 1% year over year, supported by a 1% rise in comparable transactions [5]. - In North America, comparable store sales were at breakeven, contrasting with a 6% decline in the prior-year quarter [7]. - International comparable store sales rose by 3%, compared to a 9% decline in the prior-year quarter [8]. Segment Performance - North America segment revenues were $6.9 billion, up 3% year over year, but the operating margin contracted significantly by 1420 basis points to 4.5% [7]. - International segment revenues increased by 9% to $2.07 billion, with an operating margin of 10.8%, down 410 basis points year over year [8]. - Channel Development segment revenues rose by 17% to $542.6 million, although the operating margin contracted by 800 basis points to 48.9% [10]. Margin and Cost Structure - The non-GAAP operating margin for Q4 contracted by 500 basis points to 9.4%, attributed to restructuring costs, inflationary pressures, and increased labor investments [6]. - The overall operating margin for fiscal 2025 was 9.9%, down from 15% in the prior year [11]. Cash and Debt Position - As of the end of Q4, cash and cash equivalents stood at $3.21 billion, slightly down from $3.29 billion at the end of fiscal 2024 [12]. - Long-term debt increased to $14.6 billion from $14.3 billion year over year, with the current portion of long-term debt rising to $1.49 billion [12]. Dividend Declaration - The company declared a quarterly cash dividend of 62 cents per share, payable on November 28, 2025, to shareholders of record as of November 14 [13]. Market Sentiment and Outlook - Recent estimates for Starbucks have been trending downward, leading to a Zacks Rank of 4 (Sell), indicating expectations of below-average returns in the coming months [14][16].

Core Insights - Starbucks reported mixed results for the fourth quarter of fiscal 2025, with earnings per share (EPS) missing estimates while net revenues exceeded expectations [1][4][5] Financial Performance - EPS for the 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 [4] - Net revenues reached $9.57 billion, surpassing the consensus mark of $9.33 billion by 2.6% and increasing 5.5% from $9.1 billion in the prior-year quarter [5] - Global comparable store sales rose by 1% year over year, supported by a 1% increase in comparable transactions [5] Operational Developments - The "Back to Starbucks" turnaround strategy is showing progress, with a return to global comparable sales growth and improving momentum [2] - Starbucks reported 107 net store closures in the fiscal fourth quarter, bringing the total store count to 40,990 [5] Segment Analysis - North America segment net revenues were $6.9 billion, up 3% year over year, but operating margin contracted 1420 basis points to 4.5% from 18.7% in the prior-year quarter [7] - International segment net revenues increased 9% year over year to $2.07 billion, with operating margin contracting 410 basis points to 10.8% due to promotional activities and store closures [8] Cost Pressures - Rising coffee bean prices are expected to impact performance in the upcoming quarters, with arabica coffee prices having increased by 20% this year following a 70% rise in 2024 [9] Stock Performance and Outlook - Following the earnings release, Starbucks shares initially dropped 1.7% but later rose 3.9% before closing down 1.21% on October 30 [3] - The average brokerage recommendation for Starbucks is 2.23, indicating a hold position, with 16 out of 37 recommendations classified as Strong Buy [10][11] Price Targets - The average price target for Starbucks, based on short-term forecasts from 31 analysts, is $94.74, suggesting a potential increase of 13.94% from the current stock price of $83.15 [12] Investment Opportunities - Several ETFs provide exposure to Starbucks, including Tremblant Global ETF (2.69%), Capital Group Dividend Value ETF (2.5%), and Consumer Discretionary Select Sector SPDR Fund (2.27%) [13][14]