Starbucks posted its strongest comparable sales growth in years during the second quarter of fiscal 2026. Global comps rose 6.2%. Transactions drove most of the gain. The numbers mark a sharp turn from the string of declines that defined 2025.
Revenue climbed 9% to $9.5 billion. Adjusted earnings per share reached 50 cents. Both beat expectations. Shares jumped after the April 28 report. Starbucks investor release.
The improvement did not come easily. For much of the prior year the company faced falling traffic in its largest markets. U.S. same-store sales dropped 2% for fiscal 2025. Transactions fell 4%. Operating income was cut nearly in half. Profits crashed. The stock slid more than 10% at points.
Then new leadership stepped in. Brian Niccol took the helm as chairman and CEO. He launched the “Back to Starbucks” plan. Simpler menus. Faster service. Better coffee experience. The early results show in the data. North America comps jumped 7.1%. U.S. figures matched that pace with 4.3% more transactions.
But not every region recovered at the same speed. International growth landed at 2.6%. China, once a bright spot, managed only 0.5% comp growth. Average ticket fell 1.6% there even as transactions rose. The company responded by selling majority control of its China operations to Boyu Capital. The deal closed in early April 2026. Starbucks keeps 40% ownership and the brand license. It will deconsolidate China retail results starting in the third quarter. Reuters on China deal.
The Korea episode delivered a fresh reminder of reputation risk. In mid-May executives approved a “Tank Day” promotion. The timing collided with the anniversary of the 1980 Gwangju Uprising. South Koreans saw the tank imagery as mockery of pro-democracy victims. Backlash followed. President Lee Jae-myung issued a rebuke. The campaign was pulled. Five employees were removed. The head of Starbucks Korea lost his job. Executives later described a “very significant” sales decline. They issued public apologies. The episode exposed gaps in local market oversight. Yahoo Finance on Korea sales drop.
Turnaround Measures Gain Traction
Niccol’s strategy focused on fundamentals. Fewer complicated drinks. Cleaner stores. Baristas empowered to move faster. Loyalty members reached a record 35.5 million by early 2026. Member transactions grew for the first time in eight quarters. Non-members increased even more. The first quarter already showed U.S. same-store sales up 4%. The second quarter built on that momentum.
Cost discipline helped too. Operating margins expanded. Non-GAAP margin hit 9.4%. The company raised full-year guidance. It now expects at least 5% global and U.S. comparable sales growth for fiscal 2026. Adjusted EPS should land between $2.25 and $2.45. Net new stores will total 600 to 650. Consolidated revenue is seen roughly flat because of the China deconsolidation.
Analysts took note. The recovery looks real. Yet questions remain. Can the company sustain transaction growth while repairing margins? Price sensitivity still lingers among consumers. Competition from lower-cost rivals persists in Asia. And external pressures have not vanished.
Boycotts tied to the Israel-Hamas conflict weighed on sales in 2024 and 2025. Some estimates placed the hit at billions in lost value. Union disputes added noise. Store closures and layoffs formed part of the restructuring. Hundreds of underperforming locations shut in North America. The moves aimed to reset the footprint. Early signs suggest traffic is returning to the stores that remain.
Product innovation plays a role. Seasonal drinks still matter. But the emphasis has shifted toward core beverages and food that can be prepared quickly. Speed of service metrics improved. Customer surveys reflect higher satisfaction. These details rarely make headlines. They show up in the transaction counts.
Longer term the company bets on its global store base. More than 41,000 locations now. Licensed stores make up nearly half. That mix gives flexibility as it exits direct ownership in China. Expansion targets remain ambitious there. The joint venture plans to grow to 20,000 stores over time despite current softness.
Investors appear willing to give Niccol time. The stock reacted positively to the Q2 beat and raised outlook. Yet the road is not clear. Macro uncertainty clouds the picture. Inflation-weary customers may pull back again. New competitors keep entering the premium coffee space.
So the turnaround holds promise. Sales growth has returned. Traffic is back. But execution must stay sharp. The Korea misstep illustrates how quickly sentiment can shift in any single market. Global consistency will decide whether this rebound becomes lasting recovery or another false start.
Recent coverage reinforces the mixed picture. A May 2026 report detailed ongoing boycott effects in certain regions even as U.S. traffic improved. Another piece examined the financial trade-offs of the China transaction and its impact on reported growth. The data keeps evolving. So does the scrutiny.
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