SBUX Stock Dips As China Restructuring Weighs On Q4 Revenue Despite Stronger Comparable Sales

• Global comparable Q4 coffeehouse sales increased 7.2%, while North America comps climbed 7.9%, and U.S. comps in particular rose 7.7%.
• For fiscal 2027, Starbucks guided to adjusted earnings of $3.15 to $3.25 per share, an adjusted operating margin of 13.5% to 14.0%, and North America comparable sales growth of about 4%.
• Consolidated revenues are expected to decline roughly 1% in FY27.

Shares of Starbucks (SBUX) dipped 3% after hours on Thursday after the company said that its fourth-quarter revenue dipped on China restructuring efforts even as it reported stronger same-store sales and profits that marked further progress in its turnaround efforts.

The company’s consolidated net revenues fell 4% to $9.1 billion in the fiscal fourth quarter, below Wall Street estimates of $9.23 billion, mostly owing to the conversion of China retail operations to a licensed joint venture model. Starbucks decided on a restructuring of its China business earlier this year by selling a majority stake in its China retail operations to Boyu Capital after losing market share to local competitors.

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Adjusted earnings per share for the quarter rose 54% to $0.80, beating an analyst estimate of $0.71, according to data from Fiscal AI. Global comparable coffeehouse sales increased 7.2%, while North America comps climbed 7.9%, and U.S. comps in particular rose 7.7%. Adjusted operating margin expanded 450 basis points to 14.0%.

Chairman and CEO Brian Niccol said that the company’s 'Back To Starbucks' plan aimed at a turnaround is working. Under the plan, Starbucks closed about 250 North American company-operated locations in the quarter that did not meet experience or financial expectations and ended the quarter with 41,607 coffeehouses after adding 303 net new locations.

“Our recently increased dividend and plans to resume share repurchases in fiscal 2027 underscore our confidence and disciplined focus on driving sustainable long-term value.” CFO Cathy Smith said.

The Year Ahead For Starbucks

For fiscal 2027, Starbucks guided to adjusted EPS of $3.15 to $3.25, an adjusted operating margin of 13.5% to 14.0%, and North America comparable sales growth of about 4%. Consolidated revenues are expected to decline roughly 1%, largely from the China transition, with about 1,200 net new coffeehouses planned worldwide.

Labor disputes continue alongside the operational gains. A nationwide boycott led by Starbucks Workers United remains active across the United States, with union organizers continuing to leverage consumer pickets and public demonstrations to demand a base wage, mandated staffing minimums, and predictable scheduling for roughly 12,000 baristas.

How Did SBUX Retail Traders React?

On Stocktwits, retail sentiment around SBUX stock rose from ‘bearish’ to ‘neutral’ territory over the past 24 hours, while message volume stayed at ‘normal’ levels.

A Stocktwits user expressed frustration, saying that this isn’t the growth story they were promised. 
https://stocktwits.com/mrmitchie/message/667692636

Another, however, highlighted that renovating stores as part of the turnaround plan is working, noting the growth in U.S. comparable sales.

SBUX stock has dropped 25% year-to-date. 

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