Starbucks Corporation (NASDAQ: SBUX) reported higher quarterly revenue but a sharp decline in profit for the first quarter of fiscal 2026, reflecting higher operating costs, restructuring charges, and a higher effective tax rate.
Quarterly financial performance
For the 13 weeks ended December 28, 2025, consolidated net revenues rose to $9.92 billion, compared with $9.40 billion a year earlier, representing a 5.5% year-over-year increase.
Net earnings attributable to Starbucks declined to $293.3 million, from $780.8 million in the prior-year quarter, a 62.4% year-over-year decrease. Diluted earnings per share fell to $0.26, from $0.69.
Operating income declined to $890.8 million, compared with $1.12 billion in the prior year. The effective tax rate increased to 61.7%, from 23.6% in the year-earlier period.
Segment performance
North America
Revenue in the North America segment increased to $7.28 billion, from $7.07 billion a year earlier. Operating income declined to $867.0 million, from $1.18 billion. Comparable store sales rose 4%, driven by higher transactions and average ticket size.
International
International segment revenue rose to $2.06 billion, from $1.87 billion in the prior year. Operating income increased to $282.7 million, from $237.1 million. Comparable store sales increased 5%, with growth reported across multiple markets, including China.
Channel Development
Revenue from the Channel Development segment increased to $522.7 million, from $436.3 million a year earlier. Operating income rose to $215.8 million, from $208.0 million.
Business and operational updates
During the quarter, Starbucks continued restructuring initiatives under its “Back to Starbucks” strategy. The company recorded $88.1 million in restructuring and impairment charges. Store closures were reported across several regions as part of portfolio optimization.
The company also classified its Starbucks retail operations in China as assets held for sale, leading to changes in depreciation treatment and income tax expense. Starbucks reported ending the quarter with 41,118 stores globally, including both company-operated and licensed locations.
Strategic and corporate actions
In November 2025, Starbucks announced an agreement to form a joint venture with Boyu Capital, under which Boyu Capital will acquire up to a 60% stake in Starbucks’ China retail operations. Starbucks will retain a 40% interest. The transaction remains subject to regulatory approvals and is expected to close in calendar 2026.
The board declared a quarterly cash dividend of $0.62 per share, payable in February 2026.
Guidance and items to watch
Starbucks introduced fiscal 2026 guidance, including expectations for comparable store sales growth and revenue growth at similar rates. The company also outlined plans for net new store openings globally during the fiscal year.
Performance summary
Starbucks shares traded following the release as investors assessed higher revenue, lower quarterly profit, and segment-level performance. Revenue increased across all operating segments, while earnings declined year over year. The company reported continued store expansion, restructuring activity and progress toward a strategic transaction in China.