Short Description
Starbucks reports mixed Q4 2025 results, showing traffic growth for the first time in two years while outlining a new financial outlook for its strategic turnaround.
Read Time
4 minutes 30 seconds
Main Article
Starbucks has reported mixed fiscal first-quarter results for Q4 2025, revealing a complex picture of its ongoing transformation. The coffee giant saw global same-store sales climb 4%, fueled by robust holiday demand for viral items like its “Bearista” cup and classic offerings such as the peppermint mocha. Most notably, the company achieved its first quarter of traffic growth in two years, a key milestone cited by CEO Brian Niccol as proof that the ‘Back to Starbucks’ strategy is working. While revenue of $9.92 billion exceeded Wall Street expectations, adjusted earnings of 56 cents per share missed estimates, reflecting the costs of the company’s aggressive turnaround plan and pressures from higher coffee prices and tariffs. This news comes on the eve of a pivotal investor day where executives will detail new long-term financial targets.
Looking forward, Starbucks provided its first financial outlook since suspending its forecast in October 2023. For fiscal 2026, the company projects adjusted earnings per share between $2.15 and $2.40 and anticipates global and U.S. same-store sales growth of at least 3%. Key to this plan is Starbucks’ strategic shift in China, where a 7% same-store sales gain was recorded. The company has announced a planned joint venture with Boyu Capital to run its Chinese operations, a move expected to close by Q2 2026. This structural change, alongside a scaled-back global store opening strategy of 600-650 net new cafes—following the shuttering of roughly 400 underperforming U.S. locations last year—marks a more focused approach to growth and profitability.
The path ahead for Starbucks hinges on balancing its successful traffic-driving initiatives with the operational discipline needed to improve its bottom line. The early success of its holiday menu and loyalty program innovations are positive indicators that consumer engagement is rebounding. Investors rewarded the news of returning customers, sending shares up significantly in premarket trading. However, the coming quarters will be critical for demonstrating that the company can translate this top-line momentum into sustained profit growth, especially as it navigates the integration of its major China partnership.
Short Summary
Starbucks’ Q4 2025 results highlight a turnaround at a crossroads: customer traffic is finally growing after two years, but profitability remains pressured. The company’s new 2026 outlook and upcoming investor day will reveal if its strategic shifts—including a pivotal China joint venture and refined store growth—can translate returning demand into stronger earnings. The “Back to Starbucks” strategy shows promise, but execution is key.
