Key Highlights

● Starbucks' global comparable-store sales rose 7.2%, with U.S. comps up 7.7%.

● Sprouts plunged 22.6% on Thursday after a weak outlook and several analyst downgrades.

● September spending rose 0.5% while income grew 0.2%, leaving the saving rate at 3.8%.

● Staples such as Mondelez and Colgate-Palmolive jumped pre-market after strong results.

Two consumer reports this week sent opposite messages, and investors are trying to make sense of both on Friday.

Two very different reports

Starbucks (NASDAQ:SBUX) reported fiscal fourth-quarter results after Thursday's close that showed its turnaround gaining traction. Global comparable-store sales rose 7.2%, driven by a 5.2% increase in average ticket and 1.8% growth in transactions. U.S. comps rose 7.7%. Adjusted EPS jumped 54% to $0.80. Revenue fell 4% to $9.1 billion, mainly because Starbucks converted its China retail Business into a licensed joint venture.

CEO Brian Niccol said: "This gives me confidence our performance is durable." CFO Cathy Smith said that in fiscal 2026 the company "returned to comp growth, expanded Margin and delivered stronger earnings."

The market response was muted. According to market data, the stock was down about 2% to 3% after hours on Thursday, with revenue of $9.10 billion to $9.14 billion falling short of the $9.22 billion to $9.23 billion expected. The fiscal 2027 EPS guidance of $3.15 to $3.25 has a midpoint of $3.20, above the $3.14 consensus. Starbucks also expects about 4% comparable sales growth in North America next year, plans about 1,200 net new stores and will resume buybacks. No pre-market quote was available, so Friday's direction is unconfirmed.

Sprouts: a warning from the grocery aisle

Sprouts Farmers Market (NASDAQ:SFM) told a different story. Its third-quarter results disappointed and its fourth-quarter outlook came in below expectations, according to media reports. Four analysts cut their price targets and two downgraded the stock, citing slowing sales, margin pressure and stronger competition. The stock plunged 22.6% on Thursday, among the session's biggest decliners, according to market data. Early Friday it was up 0.75% in pre-market trading, a small bounce after the selloff.

Sprouts has been one of the strongest growth stories in grocery. A slowdown there suggests shoppers may be trading down or spreading purchases across more stores as competition grows. Amazon (NASDAQ:AMZN)'s online stores revenue of $68.47 billion also fell short of the $69.6 billion estimate in its third-quarter report.

Reading the consumer

The macro data are mixed. Personal spending rose 0.5% in September while income grew only 0.2%, leaving the saving rate at 3.8%, according to Thursday's release. Consumers are spending, but partly by saving less. The University of Michigan's sentiment index hit a five-month low in its final October reading, according to market commentary. Gasoline costs are a risk, with WTI crude near $104 a barrel. Lower-income borrowers are showing strain too: OneMain (NYSE:OMF) reported consumer Loan net charge-offs rising to 6.89% from 6.67% a year earlier.

At the same time, staples are doing well. Mondelez (NASDAQ:MDLZ) was up 6.81% and Colgate-Palmolive (NYSE:CL) up 5.09% pre-market at 8:23 a.m. ET, according to market data, after strong results. Analysts are also separating winners from losers in restaurants. One brokerage raised its Texas Roadhouse (NASDAQ:TXRH) price target to $220 and cut its targets on Dutch Bros (NYSE:BROS) and CAVA (NYSE:CAVA).

The picture that emerges is a consumer who's still spending, but more selectively. Brands with pricing power and proven value, like Starbucks after its reset, are holding up better than high-growth names where expectations had run ahead.

Watch Starbucks and Sprouts at the open for signs of whether Thursday's reactions extend or reverse. McDonald's (NYSE:MCD) reports next week and will add another read on lower- and middle-income diners. The October jobs report on Nov. 6 will show whether wage growth can keep supporting spending. Today's Employment Cost Index, due at 8:30 a.m. ET, offers an early look at how quickly labor costs are rising for employers like Starbucks and Sprouts.