Starbucks (Nasdaq:SBUX) delivered its first top and Bottom Line growth in over two years in Q2 FY2026, with EPS up 22% and global comps accelerating to 6.2%. The Back to Starbucks turnaround is gaining measurable traction

Key Highlights

  • Starbucks reported Q2 FY2026 EPS of $0.50, beating the consensus estimate of $0.42 by 19%.
  • Revenue grew 8% year-over-year to $9.5 billion, surpassing expectations of $9.12 billion.
  • Global comparable store sales grew 6.2%, with U.S. comps accelerating to 7.1% led by 4% transaction growth.
  • Full-year EPS guidance raised to $2.25 to $2.45, with global comp growth guidance lifted to 5% or better.
  • 90-day active Starbucks Rewards membership reached a record 35.6 million, up 4% year-over-year.

A Genuine Inflection Point

Starbucks (Nasdaq:SBUX) entered Q2 FY2026 carrying significant expectations after 18 months of operational restructuring under CEO Brian Niccol. The results justify those expectations. The company delivered top and Bottom Line growth simultaneously for the first time in more than two years, with EPS of $0.50 rising 22% year-over-year and Revenue of $9.5 billion growing 8%. Despite the strong print, SBUX shares traded at $97.28, down 0.62% at closing, as investors weighed near-term Margin pressures and macro uncertainty against an otherwise constructive operational narrative.

Transactions Lead the Recovery

The most significant signal in the quarter is the nature of the comp recovery. U.S. comparable store sales grew 7.1%, driven by transaction Volume up more than 4%, the strongest transaction growth in three years. This is not a pricing-led recovery. Customers are returning to stores more frequently, across all income levels and age demographics, and across all day parts. Morning transactions are now roughly back to fiscal 2022 levels.

Delivery contributed meaningfully as well, growing more than 30% year-to-date across U.S. company-operated stores and proving largely incremental rather than substitutional. International revenues grew nearly 8% year-over-year. All 10 of the largest international markets, including China, Japan, South Korea, and Mexico, posted positive comps for the first time in nine quarters.

Margin Progress, With Caveats

Consolidated operating Margin improved 110 basis points to 9.4%, the first quarter of Margin expansion since Q1 FY2024. However, the composition warrants scrutiny. International Margin expanded approximately 790 basis points to 20.3%, partly driven by held-for-sale accounting related to the Starbucks China transaction, which temporarily reduced operating expenses by approximately $118 million. That accounting benefit concluded at the start of Q3.

North America operating Margin contracted 170 basis points to 10.2%. Roughly 190 basis points of pressure came from product and distribution cost increases, split between innovation-led product mix and Inflation tied to tariffs and elevated coffee prices. Management expects both pressures to ease in the second half of FY2026 as coffee prices moderate and Tariff impacts roll through inventory. G&A declined 5.5% year-over-year as the organisational streamlining programme continues to generate savings.

Innovation and Loyalty Driving Demand

The Refreshers platform, now a $2 billion Business, gained further momentum following the addition of customisable caffeine levels. Management noted strong incrementality, with the new energy customisation attracting both lower-caffeine afternoon users and first-time morning energy drinkers. The upcoming Tropical Butterfly Refresher is positioned as the summer Demand driver.

Starbucks Rewards reached a record 35.6 million 90-day active members, bucking the usual seasonal dip seen in this quarter. The redesigned loyalty programme, featuring a 60-star Redemption option and three membership tiers, has driven higher frequency and engagement in its early weeks, with card load rates exceeding management expectations.

Guidance Raised, Uncertainty Acknowledged

Full-year EPS guidance was raised to $2.25 to $2.45, and global comp growth guidance lifted to 5% or better. Consolidated Revenue is now expected to be roughly flat year-over-year, reflecting the China JV transition which removes the bulk of China revenues from the consolidated P&L. Management acknowledged macro uncertainty around gas prices and consumer confidence but noted no material softness in customer behaviour through April.

The $2 billion multi-year cost savings programme remains on track, with the bulk of P&L impact expected in FY2027 and FY2028 as operational efficiencies compound and Green Apron service investments begin to annualise.

Conclusion

Starbucks has cleared the most important milestone of its turnaround: simultaneous top and Bottom Line growth, driven by genuine transaction recovery rather than pricing. The operational foundation is strengthening quarter by quarter, and the Brand is regaining relevance across key demographics. Near-term Margin headwinds from coffee costs and tariffs are real but manageable and expected to ease. The harder test is sustaining this momentum across a full fiscal year in an uncertain macro environment, and that is precisely what management is now focused on delivering.