Starbucks Reports 7.9 Percent Same-Store Sales Growth, Beats Expectations

Starbucks has raised its annual sales and profit forecasts for the second time this year after reporting stronger-than-expected third-quarter results, supported by sustained customer demand and continued progress under its turnaround strategy.

The coffee chain now expects global same-store sales growth of nearly 6 percent, higher than its previous forecast of around 5 percent or above. The company also increased its adjusted earnings per share outlook to between $2.55 and $2.65, compared with its earlier guidance of $2.25 to $2.45.

The revised outlook follows four consecutive quarters of comparable sales growth as Starbucks continues to implement initiatives focused on improving customer experience, including menu simplification and reducing wait times.

Chief Executive Officer Brian Niccol said, "We have more work to do." Finance Chief Cathy Smith added that the company remains focused on controllable factors despite operating in a "dynamic operating environment."

For the third quarter, Starbucks reported global same-store sales growth of 7.9 percent, exceeding analyst expectations of 5.7 percent. The performance was supported by improving consumer demand and signs of market share stabilisation.

Consumer Edge analyst Michael Gunther said, "Starbucks has begun to experience market share stabilization in recent months, most notably with younger diners." He added, "Consumers may be shifting dining dollars toward in-home eating but are leaving room in the budget for daily drink habits."

The company's operating margin improved to 14.4 percent during the quarter, compared with 10.1 percent a year earlier. Adjusted earnings per share reached 85 cents, ahead of analyst estimates of 66 cents.

Starbucks stated that refunds received during the quarter largely offset tariff-related costs incurred during the fiscal year. The company has also been working to improve profitability through cost-control measures, including workforce reductions, office consolidation and operational streamlining.

The latest results suggest that Starbucks' ongoing efforts to improve customer experience while managing costs are contributing to stronger sales performance and improved profitability across its global operations.