Starbucks reported mixed quarterly results for the period ended September 27, with strong performance in its home market offsetting international weakness. US same-store sales grew 7.7%, topping analyst estimates of 6.5%, while global same-store sales increased 7.2%, beating Wall Street expectations of 6%. However, international comparable sales outside North America rose only 0.9%, falling short of analyst estimates of 3.2%.
The company reported fiscal fourth-quarter net income of $677.2 million, or 59 cents per share, compared with $133.1 million, or 12 cents per share, a year earlier. Excluding restructuring and impairment costs, earnings per share reached 80 cents. Net revenue fell 4% to $9.14 billion, reflecting the impact of Starbucks' transition of its China business to a joint venture model. CEO Brian Niccol attributed the US turnaround to the company's 'Back to Starbucks' strategy, which focused on improving service, making cafes more welcoming and sharpening marketing. 'Starbucks brand affinity is at near record levels as our menu innovation, marketing and merchandise continue to create moments that drive culture and bring people into our coffee houses,' Niccol told analysts.
Looking ahead, Starbucks projected adjusted earnings per share for fiscal 2027 in the range of $3.15 to $3.25, above Wall Street's expectation of $3.14. The company forecast North American same-store sales growth of 4% for the fiscal year. However, Starbucks anticipated a revenue decline of 1%, weaker than analyst forecasts of 1.4% net sales growth. CFO Cathy Smith said the revenue outlook was weighed down by slight deflation in coffee prices and slowing net new North American cafe openings.
During the quarter, Starbucks opened 303 net new cafes. The company completed more than 1,700 cafe uplifts across the US and Canada, with renovations including increased seating and softer lighting designed to boost customer transactions. Starbucks also announced it would close about 250 locations, or roughly 1% of its North American footprint, as part of its turnaround. The company's fall menu rollout, featuring the pumpkin spice latte, was described as the company's strongest autumn launch day ever. Matcha beverages have become a $1 billion business for Starbucks.
Niccol said the company is ahead of schedule to meet fiscal 2028 targets set at an investor day in January. 'We enter fiscal 2027 with momentum, a clear set of priorities and higher ambitions for what Starbucks can become,' he said. Outside North America, Starbucks has shifted most of its international business to a licensed model under which local operators take charge, following the China joint venture deal. The company is also exploring selling a majority stake in its Japan business.