Starbucks Corporation reported fiscal second-quarter results Tuesday that exceeded Wall Street expectations on both the top and bottom lines, prompting the coffee chain to raise its full-year outlook for comparable earnings and same-store sales growth. The company posted adjusted earnings of 50 cents per share, surpassing analyst estimates of 43 cents per share, while revenue climbed 9% year-over-year to $9.53 billion, beating expectations of $9.16 billion.

Market Context

The quarterly beat comes as Starbucks works to rebuild momentum under CEO Brian Niccol, who has been executing a turnaround strategy focused on improving the customer experience and streamlining operations. The company's shares have gained approximately 16% over the past 12 months, though that performance trails the S&P 500's roughly 29% advance during the same period. With a market capitalization of about $110 billion, Starbucks remains one of the largest restaurant stocks globally.

Analysis

The standout metric for investors was traffic growth, which marks the company's second consecutive quarter of positive momentum in this critical area. U.S. same-store sales surged 7.1%, driven by a 4.3% increase in customer visits—the type of volume growth that traders and analysts had been watching closely to gauge whether Starbucks' turnaround efforts were resonating with consumers. CEO Brian Niccol described the quarter as "a milestone for Starbucks – and the turn in our turnaround," according to a video posted alongside the earnings release.

International markets presented a more mixed picture, with same-store sales rising 2.6% outside the U.S. The company noted that China—its second-largest market—remained a headwind, with same-store sales growth of just 0.5%. Starbucks has leaned on discounting in China to drive visits, resulting in 2.1% higher traffic but a 1.6% decline in average ticket size.

Key Numbers

- Adjusted EPS: 50 cents vs. 43 cents expected (LSEG survey)

- Revenue: $9.53 billion vs. $9.16 billion expected; up 9% year-over-year

- Global same-store sales growth: 6.2% vs. 4% expected (StreetAccount estimates)

- U.S. same-store sales: 7.1%, including 4.3% traffic increase

- International same-store sales: 2.6%; China same-store sales grew just 0.5%

What to Watch

Investors will parse the company's earnings conference call at 4:15 p.m. ET for more details on Starbucks' revised full-year projections. The company previously guided adjusted EPS in the range of $2.15 to $2.40 and global and U.S. same-store sales growth of at least 3% for fiscal 2026. Traders will watch for updated targets and any commentary on China stabilization, pricing strategy, and margin outlook as management maps out the path forward under its turnaround plan.