Shares of Starbucks Corporation (NASDAQ: SBUX) rose over 1% on Friday. The stock has gained 11% in the past three months. The java giant is scheduled to report its earnings results for the first quarter of 2026 on Wednesday, January 28, before market opens. Here’s a look at what to expect from the earnings report:
Revenue
Analysts are projecting revenue of $9.64 billion for Starbucks in the first quarter of 2026, which indicates a growth of over 2% from the same period a year ago. In the fourth quarter of 2025, consolidated revenues increased 5% year-over-year to $9.56 billion.
Earnings
The consensus estimate for earnings per share in Q1 2026 is $0.59, which points to a 14% decline from the prior-year quarter. In Q4 2025, adjusted EPS decreased 35% YoY to $0.52.
Points to note
Starbucks is in the midst of an endeavour to turn around its business. Its Back to Starbucks strategy is making progress, and the company saw its global comparable sales grow 1% in the fourth quarter of 2025, driven by a rise in traffic. Although comps in North America and US remained flat due to slow traffic, comps in the International segment grew 3%, helped by a 6% growth in transactions.
The coffee chain’s efforts in enhancing the customer experience through menu revisions, pricing changes, store remodels, and improvements in digital capabilities are expected to yield benefits. Its delivery business in the US continues to expand rapidly, with a 30% YoY growth in Q4. SBUX’s top line is likely to have benefited from its special menu offerings and gift merchandise during the holiday season.
As part of its restructuring efforts, Starbucks closed a number of its stores in North America and has been focusing on revamping its existing stores to drive growth. The company has been seeing a pickup in transactions from both its loyalty program members and non-members.
SBUX is seeing strong growth in international markets like China, Japan, the UK, and Mexico. The company faces heavy competition in China. It has entered into a partnership with Chinese investment firm Boyu Capital to run its Chinese retail business, with Boyu holding a 60% stake. This alliance is expected to help drive growth in the region.
Starbucks’ investments in its business will continue to weigh on its bottom line. In Q4, its adjusted gross margin fell 500 basis points YoY to 9.4%. It is also facing headwinds from high coffee prices and tariffs. These impacts are likely to be reflected on earnings.