Timing clarification: Starbucks is scheduled to release results after the market close today, Wednesday, July 29, 2026, followed by its conference call at 4:15 p.m. Eastern / 1:15 p.m. Pacific. The event is today, not tomorrow.
This report is primarily a test of whether Starbucks’ turnaround has progressed from an encouraging rebound into a durable, profitable recovery.
Fiscal Q2 delivered the first year-over-year growth in both revenue and adjusted EPS in more than two years. U.S. transactions accelerated, operating execution improved, and management raised full-year guidance. Consequently, investors are no longer merely looking for stabilization: they expect another strong comparable-sales quarter and clearer evidence that traffic growth is beginning to produce meaningful margin leverage.
The most important figures will therefore be:
Current sell-side preview data available in the research tools points to approximately:
| Metric | Current expectation |
|---|---|
| Global comparable sales | +5.75% |
| North America comparable sales | ~+6% |
| Consolidated operating margin | ~12.3% |
| Adjusted EPS | $0.65 |
For context, fiscal Q2 produced:
| Fiscal Q2 2026 result | Reported |
|---|---|
| Global comparable sales | +6.2% |
| U.S. comparable sales | +7.1% |
| U.S. transactions | More than +4% |
| Revenue | $9.5 billion, +9% |
| Adjusted operating margin | 9.4%, +110 bps |
| Adjusted EPS | $0.50, +22% |
| Active U.S. Rewards members | 35.6 million, +4% |
Management also said positive comparable-sales trends continued through April. The debate is whether that momentum persisted through the balance of the quarter.
Starbucks’ Q2 result was notable because U.S. comparable sales were supported by more than four points of transaction growth, rather than depending primarily on price. Transactions grew across dayparts, income levels, and age groups, and mornings recovered to approximately fiscal 2022 levels.
That creates a relatively high bar for Q3.
A healthy result would show:
Investors should treat a strong headline comp with weak traffic more cautiously. Ticket can benefit from delivery mix, beverage modifications, food attachment, and pricing; the more important evidence of brand recovery is whether customers are visiting more frequently.
Q2 demonstrated that the top line has turned, but North America profitability remained under pressure. North America operating margin contracted roughly 170 basis points to about 10%, despite a 7.1% comp.
The major Q2 puts and takes were:
Management has argued that earnings growth should follow the sales recovery. Q3 needs to support that claim.
Several factors should become more favorable:
A good report does not necessarily require full North America margin expansion yet. It should, however, show a credible sequential path toward expansion and support management’s expectation for slight consolidated margin growth for the full year.
Starbucks has made store operations the foundation of its turnaround. Management’s service targets remain approximately:
At the Q2 call, management said about 80% of stores were meeting these service metrics. It also reported that the proportion of U.S. company-operated stores achieving four or more “shots” on its internal Grow scorecard had increased by more than 30 percentage points.
Important Q3 updates would include:
The key risk is that Green Apron Service works as an expensive traffic stimulus but does not eventually generate attractive incremental margins. Management must demonstrate that the model supports more throughput with the existing labor base—not that every incremental transaction requires proportionate incremental labor.
The redesigned Starbucks Rewards program launched in March, making Q3 the first full quarter in which investors can assess its effect.
Early Q2 indicators were encouraging:
Investors should look for:
Management previously suggested that the redesigned program could eventually contribute as much as one percentage point to U.S. company-operated comps. Any quantification of its Q3 contribution would be useful.
Starbucks is also attempting to create a second demand peak after 11 a.m. Its principal vehicles include:
Refreshers were already a roughly $2 billion platform, and management said the new energy products launched in April exceeded expectations. Investors should listen for whether the summer beverage lineup sustained that initial momentum and whether the products are generating incremental afternoon transactions.
Starbucks closed the sale of 60% of its China retail operations to Boyu Capital on March 30, 2026, immediately after fiscal Q2. Starbucks retained 40%, continues to own and license the brand, and received approximately $3.1 billion in gross proceeds.
Fiscal Q3 will therefore be the first quarter under the new structure:
Management previously estimated that second-half China-related revenue would be less than 20% of what Starbucks would have reported under the old structure, while roughly half of the new China-related revenue should flow to operating income.
Investors should avoid reading the headline revenue growth rate in isolation. The more useful questions are:
The company’s current fiscal 2026 guidance calls for approximately flat consolidated revenue largely because of this deconsolidation, despite strong underlying comparable sales.
After Q2, Starbucks raised fiscal 2026 guidance to:
| Fiscal 2026 metric | Current guidance |
|---|---|
| Global comparable sales | 5% or better |
| U.S. comparable sales | 5% or better |
| Consolidated revenue | Approximately flat YoY |
| Consolidated operating margin | Slight YoY growth |
| Adjusted EPS | $2.25–$2.45 |
| Net new coffeehouses | 600–650 |
Starbucks earned adjusted EPS of $0.56 in Q1 and $0.50 in Q2. It therefore needs approximately $1.19–$1.39 across Q3 and Q4 to achieve the annual range. A Q3 result near the $0.65 consensus would leave roughly $0.54–$0.74 for Q4.
That makes the annual range achievable, but the upper end likely requires:
Management has already described those as the conditions needed to reach the high end. A modest guidance increase would be positive, but maintaining the current range with stronger language around the upper half could be enough if Q3 fundamentals are sound.
Conversely, a reduction would materially challenge the turnaround narrative.
Starbucks’ fiscal 2028 framework targets:
Q3 will not prove that framework, but it can show whether the underlying bridge is credible. The best evidence would be transaction-led growth coupled with early North America margin recovery. Strong comps without margin conversion would leave the 2028 targets dependent on increasingly aggressive future cost savings.
SBUX closed at approximately $103.13 on July 28, about 6% above its April 28 pre-Q2 close but modestly below the immediate post-Q2 closing level.
That suggests expectations are meaningfully better than they were before Q2, although the stock has not simply continued rising since the initial earnings reaction. With investors increasingly confident that the turnaround has taken hold, a routine comp beat may not be enough by itself. The market is likely to reward a combination of:
This would support the view that Starbucks is ahead of schedule and that fiscal 2027 can deliver a substantial earnings acceleration.
This would keep the turnaround intact, although the stock reaction could depend heavily on positioning and the quality of the traffic result.
That outcome would revive concerns that Q2 benefited from unusually favorable comparisons or short-lived excitement rather than a durable change in customer behavior.
Starbucks enters fiscal Q3 with real operating momentum but also substantially higher expectations. The turnaround does not need another dramatic acceleration to remain credible, but the report should show that Q2’s transaction recovery was sustainable and that sales growth is beginning to translate into better North America economics.
The cleanest positive setup is transaction-led U.S. comps near or above 6%, visible sequential margin improvement, and confidence in the upper half of the $2.25–$2.45 EPS range. A strong comp accompanied by weak margin conversion would be a more mixed result, while any meaningful traffic slowdown would challenge the increasingly bullish turnaround narrative.