Just now, Starbucks sold its China business—investors may have a chance to buy the dip.

North America remains Starbucks’ primary revenue source. Performance in this region improved significantly compared to the prior quarter’s decline, with comparable-store sales flat year-on-year. September delivered strong results: transaction volume drove a nearly 1% increase in comparable-store sales, largely attributable to the company-wide rollout of the new ‘Green Apron Service’ standard across all U.S. stores. This momentum carried into October, signaling a broader market recovery. International operations were undoubtedly the standout highlight this quarter. In Q4, Starbucks’ international revenue grew 9% year-on-year to a record $2.1 billion; full-year international sales also reached a record $7.8 billion. The company opened a net 316 new international stores this quarter and plans to open over 900 in fiscal 2025—including two highly anticipated flagship stores in Madrid. China is Starbucks’ second-largest market. Its recovery remains robust, with comparable-store sales up 2% and transaction volume up 9%. Yet Starbucks faces persistent challenges in China. Three key factors explain this stagnation: First, Starbucks China lacks sufficient localization capability—product innovation is slow, and centralized control from the global headquarters constrains decision-making efficiency in the China market. Second, intensifying competition from domestic brands is eroding market share. Luckin Coffee has captured significant ground through its ‘digitalization + rapid iteration + high cost-performance’ strategy, while brands like Cotti and Manner are further fragmenting the customer base. Additionally, demand for Starbucks’ signature ‘third place’ concept has notably weakened post-pandemic. Third, strategic inertia hampers growth: early success with the company-owned store model caused Starbucks to overlook the low-cost expansion advantages offered by franchising. Although Starbucks’ Q4 revenue showed signs of rebound, profitability weakened. Inflation, rising coffee prices, tariffs, and labor investments tied to business transformation all pressured operating margins, which fell to 9.4%. Adjusted earnings per share (EPS) stood at $0.52—down 35% year-on-year—underscoring the company’s need for sustained operational and strategic investment to achieve ‘sustainable long-term growth.’ CEO Brian R. Niccol emphasized: ‘We expect revenue growth to lead, with profitability naturally following.’ This quarter, Starbucks closed 107 stores globally—primarily because, even after renovation, they failed to meet profitability or customer experience standards. While these closures had minimal impact on North American revenue, management expects them to lift margins and support stronger long-term performance. Nonetheless, Starbucks faces fierce competition from multiple fronts. It must accelerate its ‘Back to Starbucks’ initiative—including service upgrades, store renovations, and menu innovation—to reassert its premium positioning without diluting brand value. For fiscal 2025, Starbucks reported consolidated net revenue growth of 3% to $37.2 billion—but adjusted EPS plummeted 36% to $2.13. Analysts, however, project EPS of $2.47 for fiscal 2026, followed by 3.5% revenue growth. In fiscal 2027, revenue and earnings are expected to rise further by 7.1% and 24.9%, respectively. Overall, Wall Street’s rating for Starbucks (SBUX) stock is ‘Moderate Buy.’

Today, Starbucks released its fiscal 2025 results: the CEO expressed delight at returning to growth in China; a potential equity sale of its China business would deliver ‘triple value.’

Xiaoshidai noted that during the earnings call, an analyst asked, ‘What impact have new competitors had on Starbucks?’ In response, Brian Niccol stated his consistent strategy is to maintain the ‘best offense’—ensuring Starbucks always represents craftsmanship in coffee, beverages, and food, while delivering meaningful connection and experience for customers. He stressed that scale is critical in competition, and that competition itself drives continuous improvement. He has directed the entire organization to focus on being ‘better than yesterday’—a core expression of Starbucks’ ‘best offense’ philosophy. According to Cathy Smith’s remarks at the meeting, as part of its restructuring plan, Starbucks closed 107 stores globally on a net basis in Q4—stores deemed unable to meet customer experience standards, even with potential enhancements, and unlikely to achieve sustainable profitability. Going forward, Starbucks will prioritize disciplined capital allocation, advancing initiatives to reduce construction costs and enhance profitability—while simultaneously cultivating a warm, supportive work environment. ‘As our business continues to grow, our goal is to improve both the quality and profitability of every transaction,’ she said. Starbucks is in the midst of a multi-year transformation—and Q4 marked a turning point: the first quarter of global comparable-store sales growth in seven quarters. Moreover, trends in the first quarter of the new fiscal year are encouraging. ‘We’re focused on driving revenue growth while managing controllable costs—giving us confidence in our growth trajectory.’ On commodity prices, Cathy Smith stated today that coffee prices remain elevated and have yet to decline. Starbucks is responding accordingly, actively seeking areas within its business where it can offset rising cost pressures. External commentary The latest earnings report has drawn considerable external attention. Today, The Wall Street Journal observed that Starbucks’ global comparable-store sales have stabilized after a year-and-a-half-long decline. Last quarter, U.S. comparable-store sales held steady after six consecutive quarters of decline, while global comparable-store sales rose 1%—exceeding analyst expectations. The Journal noted that, one year into Brian Niccol’s leadership, he remains committed to reversing Starbucks’ downward trend. He has cut approximately 2,000 corporate positions, laid off thousands of baristas, and reduced the number of U.S. stores. Some investors support his cost-control measures and look forward to the company reinstating earnings guidance. Others have cooled toward Starbucks—the stock has declined roughly 8% since the start of the year. Bloomberg commented that Starbucks’ strong international sales mark a return to growth—and represent an early success for Brian Niccol’s revitalization plan. He has had to contend with reduced consumer coffee consumption amid broad-based inflation. His ‘Back to Starbucks’ initiative aims to enhance café appeal and improve customer service. Investors remain concerned about the costs of these improvements—and their slow pace of implementation. CNBC highlighted today that Starbucks’ delivery business has grown into a $1 billion operation. The report called this a ‘milestone’: delivery sales in Q4 surged nearly 30% year-on-year—just as the company’s overall U.S. business began recovering.

Starbucks Corp. Stock Outperforms Competitors Despite Daily Losses

Oct 23, 2026

Starbucks Corp. shares fell 1.09% to $100.80 but outperformed broader market indices like the S&P 500 and Dow Jones during a challenging trading day.

MarketWatch

2026-10-15

SK, Samsung Among Korean Firms Considering Westinghouse Stake Acquisition

2026-10-23

Starbucks Corp. Stock Outperforms Competitors Despite Daily Losses

Starbucks Corp. Stock Outperforms Competitors Despite Daily Losses

FAQ