SBUX earnings analysis
What we found in SBUX's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Starbucks reported second-quarter fiscal 2026 net revenues of $9.53 billion, up 8.8% year-over-year, driven by a 6.2% increase in global comparable store sales and strength in the Global Coffee Alliance. Consolidated operating margin expanded to 8.7% (up 180 bps vs. prior year) and net earnings attributable to Starbucks rose to $510.9 million (up $126.7 million). Management closed the China retail transaction (Boyu acquires 60% on March 30, 2026), which will deconsolidate ~7,991 company-operated stores and is expected to reduce revenues but improve operating margin and strengthen the balance sheet. The MD&A is forward-looking but contains no new numeric FY guidance in the 10-Q.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Quarterly revenue growth
- Consolidated net revenues increased 8.8% to $9,531.5 million for the quarter, up $769.9 million versus $8,761.6 million in the prior-year quarter.
- Operating margin expansion
- Consolidated operating margin expanded 180 basis points to 8.7% for the quarter, with operating income rising $227.1 million to $828.1 million.
- Company-operated store revenue contribution
- Company-operated stores revenue rose $531.4 million to $7,816.4 million (a 7.3% increase vs. prior year), primarily driven by a 6.2% increase in global comparable store sales.
- Channel/Other revenue strength (Global Coffee Alliance)
- Other revenues increased $166.1 million to $626.7 million (36.1% increase), primarily due to a $149 million increase in Global Coffee Alliance revenue.
- China transaction closed (deconsolidation)
- On March 30, 2026 the China transaction closed: funds managed by Boyu Capital acquired a 60% stake and Starbucks retained 40% in the China retail JV that oversees 7,991 company-operated coffeehouses; this will deconsolidate those stores beginning in Q3.
- Net earnings increased
- Net earnings attributable to Starbucks were $510.9 million, up $126.7 million from $384.2 million in the prior-year quarter.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- North America operating income decline
- North America operating income decreased $68.4 million to $679.9 million (9.9% operating margin) versus $748.3 million (11.6% margin) in the prior-year quarter.
- Higher effective tax rate
- The effective tax rate for the quarter rose to 29.8% from 23.5%, with income tax expense increasing $99.3 million to $217.3 million.
- Deconsolidation will lower reported revenue
- The classification and subsequent deconsolidation of Starbucks China retail (7,991 stores) will reduce consolidated revenues beginning in Q3 even as it improves operating margin and shifts revenue to equity investee income.
- Rising interest expense
- Interest expense increased $9.7 million to $137.0 million for the quarter, reflecting higher rates on refinanced long-term debt and reduced hedging savings.
- Material tax discrete impacts year-to-date
- For the two quarters ended Mar 29, 2026 the effective tax rate was 46.1% versus 23.6% a year ago, primarily due to a $273 million discrete impact from changes in indefinite reinvestment assertions related to the China classification.
What they reported.
What the company itself reported, taken out of the document.
- Operating margin
- 8.7%
- Segment
- Company-operated stores: $7,816.4 million (up $531.4 million, +7.3% vs. prior-year quarter)
- Segment
- Licensed stores: $1,088.4 million (up $72.4 million, +7.1% vs. prior-year quarter)
- Segment
- Other: $626.7 million (up $166.1 million, +36.1% vs. prior-year quarter; Global Coffee Alliance +$149 million)
What they said about what is next.
The 10-Q contains qualitative forward-looking commentary (e.g., 'we expect certain macroeconomic pressures to alleviate in the second half of the fiscal year') but provides no numeric FY26 revenue or EPS guidance in this filing. Management notes proceeds from the China transaction are planned for debt reduction; for previously disclosed numeric FY26 guidance refer to the company's earnings release / 8-K.
The filing reads better than the one before it.
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
Read the next one first.
We read every filing SBUX makes the day it lands, and put it next to what the options market did about it. Members get both, and an alert when a filing arrives.
Cancel anytime · Month to month · Switch tiers whenever