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Starbucks Q3 Earnings Miss Estimates, Revenues Rise Y/Y, Stock Up
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Key Takeaways
SBUX missed EPS estimates as operating margins declined and global comps fell year over year.
Revenues rose year over year, driven by growth in store count and strength in Channel Development.
Margins contracted across all segments due to inflation, labor investments and promotional activity.
Starbucks Corporation (SBUX - Free Report) reported mixed third-quarter fiscal 2025 results, with earnings missing the Zacks Consensus Estimate and net revenues beating the same. The top line increased year over year, but the bottom line declined. The company made a one-time investment in Leadership Experience 2025 and recorded a discrete tax charge, which together impacted third-quarter earnings per share (EPS) by 11 cents.
Following the results, SBUX stock surged 4.4% in yesterday’s after-hours trading session.
The quarter’s performance reflected progress across all four pillars of the company’s turnaround strategy — partners, store experience, customer engagement and menu innovation. The company continued to advance its 'Back to Starbucks' strategy with a focus on building long-term strength. Going forward, Starbucks plans to launch a series of innovations to support growth in fiscal 2026, improve service and strengthen the overall business.
Discussion on Earnings, Revenues & Comps of SBUX
In the fiscal third quarter, the company reported EPS of 50 cents, missing the Zacks Consensus Estimate of 65 cents by 23.1%. The bottom line also decreased 46.2% from 93 cents reported in the prior-year quarter.
Net revenues of $9.46 billion beat the consensus mark of $9.3 billion by 1.7%. The reported value was up 3.8% from $9.11 billion reported in the prior-year quarter.
Starbucks Corporation Price, Consensus and EPS Surprise
Global comparable store sales declined 2% year over year. The downside was due to a decrease of 2% in comparable transactions, partially offset by a 1% increase in average tickets.
Starbucks opened 308 net new stores worldwide, bringing the total store count to 41,097 at the quarter’s end.
Starbucks’ Overall Margin Contracts in Q3
The company’s non-GAAP operating margin contracted 660 basis points (bps) to 10.1% from the prior year. The decline was primarily due to deleverage and investments associated with the "Back to Starbucks" initiative, including additional labor and Leadership Experience 2025, and inflation.
On a constant currency basis, the non-GAAP operating margin contracted 650 bps year over year.
SBUX’s Segmental Details
Starbucks has three reportable operating segments: North America, International and Channel Development.
North America: The segmental net revenues were $6.93 billion, up 2% year over year. The segment’s comparable store sales declined 2%, which was in line with the fall reported in the prior-year quarter. Average transactions declined 3%, whereas the change in tickets rose 1% year over year.
Operating margin contracted 770 bps to 13.3% from 21% in the prior-year quarter. Our model expected this segment’s operating margin to be 14.3% in the quarter.
International: This segment’s net revenues of $2.01 billion increased 9% year over year. Comparable store sales were at breakeven in contrast to a 7% fall reported in the prior-year quarter. Average transactions increased 1%, whereas the change in tickets fell 1% year over year.
Operating margin contracted 200 bps year over year to 13.6%. The downside was due to heightened promotional activity. We expected this metric to be 10.2% in the quarter.
In the fiscal third quarter, comps in China were 2% against a 14% decline reported in the prior-year quarter. Transactions rose 6%, whereas the change in tickets fell 4% year over year.
Channel Development: Net revenues in the segment increased 10% year over year to $483.8 million. The upside was driven by an increase in contributions to the Global Coffee Alliance.
The segment’s operating margin contracted 860 bps year over year to 45.1%. A decline in North American Coffee Partnership joint venture income, a mix shift and higher global product costs caused the downside. We expected the operating margin to be 33.1% in the quarter.
SBUX’s Financial Details
The company ended the fiscal third quarter with cash and cash equivalents of $4.17 billion compared with $3.29 billion at the fiscal 2024-end. As of June 29, 2025, long-term debt totaled $14.6 billion compared with $14.3 billion as of Sept. 29, 2024. The current portion of long-term debt as of the quarter’s end was $2.75 billion compared with $1.25 billion as of fiscal 2024-end.
Meanwhile, management declared a quarterly cash dividend of 61 cents per share. The dividend is payable on Aug. 29, 2025, to its shareholders of record as of Aug. 15.
SBUX’s Zacks Rank
Starbucks currently carries a Zacks Rank #4 (Sell).
Hilton Worldwide Holdings Inc. (HLT - Free Report) reported second-quarter 2025 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate. The top and bottom lines increased on a year-over-year basis.
Hilton delivered strong bottom-line performance in the quarter, underscoring the strength and resilience of its business model. However, top-line results were modestly impacted by unfavorable holiday and calendar shifts, reduced government spending, softer international inbound travel and broader economic uncertainty.
Hasbro, Inc. (HAS - Free Report) reported second-quarter fiscal 2025 results, with earnings and revenues beating the Zacks Consensus Estimate. The top line declined year over year while the bottom line increased from the prior-year's quarter figure. The downside was mainly due to weaker contributions from the Consumer Products and Entertainment segments.
Nonetheless, Hasbro raised its full-year revenue and adjusted EBITDA guidance. The update was supported by strong performance in the Wizards segment, along with steady contributions from the games portfolio, licensing partnerships and digital initiatives. Despite ongoing macroeconomic challenges, Hasbro expects cost efficiency measures and business diversification to support its growth plans for 2025 and beyond.
Mattel, Inc. (MAT - Free Report) reported second-quarter 2025 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top line fell year over year, while the bottom line came in line with the prior-year quarter’s figure.
Mattel delivered a resilient second-quarter performance, underscoring its focus on operational execution amid a challenging macroeconomic backdrop. The company achieved significant gross margin expansion, international growth and continued momentum in its entertainment slate. While global trade dynamics and shifts in retailer ordering patterns weighed on its U.S. business, adjusted EPS held steady year over year.
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Starbucks Q3 Earnings Miss Estimates, Revenues Rise Y/Y, Stock Up
Key Takeaways
Starbucks Corporation (SBUX - Free Report) reported mixed third-quarter fiscal 2025 results, with earnings missing the Zacks Consensus Estimate and net revenues beating the same. The top line increased year over year, but the bottom line declined. The company made a one-time investment in Leadership Experience 2025 and recorded a discrete tax charge, which together impacted third-quarter earnings per share (EPS) by 11 cents.
Following the results, SBUX stock surged 4.4% in yesterday’s after-hours trading session.
The quarter’s performance reflected progress across all four pillars of the company’s turnaround strategy — partners, store experience, customer engagement and menu innovation. The company continued to advance its 'Back to Starbucks' strategy with a focus on building long-term strength. Going forward, Starbucks plans to launch a series of innovations to support growth in fiscal 2026, improve service and strengthen the overall business.
Discussion on Earnings, Revenues & Comps of SBUX
In the fiscal third quarter, the company reported EPS of 50 cents, missing the Zacks Consensus Estimate of 65 cents by 23.1%. The bottom line also decreased 46.2% from 93 cents reported in the prior-year quarter.
Net revenues of $9.46 billion beat the consensus mark of $9.3 billion by 1.7%. The reported value was up 3.8% from $9.11 billion reported in the prior-year quarter.
Starbucks Corporation Price, Consensus and EPS Surprise
Starbucks Corporation price-consensus-eps-surprise-chart | Starbucks Corporation Quote
Global comparable store sales declined 2% year over year. The downside was due to a decrease of 2% in comparable transactions, partially offset by a 1% increase in average tickets.
Starbucks opened 308 net new stores worldwide, bringing the total store count to 41,097 at the quarter’s end.
Starbucks’ Overall Margin Contracts in Q3
The company’s non-GAAP operating margin contracted 660 basis points (bps) to 10.1% from the prior year. The decline was primarily due to deleverage and investments associated with the "Back to Starbucks" initiative, including additional labor and Leadership Experience 2025, and inflation.
On a constant currency basis, the non-GAAP operating margin contracted 650 bps year over year.
SBUX’s Segmental Details
Starbucks has three reportable operating segments: North America, International and Channel Development.
North America: The segmental net revenues were $6.93 billion, up 2% year over year. The segment’s comparable store sales declined 2%, which was in line with the fall reported in the prior-year quarter. Average transactions declined 3%, whereas the change in tickets rose 1% year over year.
Operating margin contracted 770 bps to 13.3% from 21% in the prior-year quarter. Our model expected this segment’s operating margin to be 14.3% in the quarter.
International: This segment’s net revenues of $2.01 billion increased 9% year over year. Comparable store sales were at breakeven in contrast to a 7% fall reported in the prior-year quarter. Average transactions increased 1%, whereas the change in tickets fell 1% year over year.
Operating margin contracted 200 bps year over year to 13.6%. The downside was due to heightened promotional activity. We expected this metric to be 10.2% in the quarter.
In the fiscal third quarter, comps in China were 2% against a 14% decline reported in the prior-year quarter. Transactions rose 6%, whereas the change in tickets fell 4% year over year.
Channel Development: Net revenues in the segment increased 10% year over year to $483.8 million. The upside was driven by an increase in contributions to the Global Coffee Alliance.
The segment’s operating margin contracted 860 bps year over year to 45.1%. A decline in North American Coffee Partnership joint venture income, a mix shift and higher global product costs caused the downside. We expected the operating margin to be 33.1% in the quarter.
SBUX’s Financial Details
The company ended the fiscal third quarter with cash and cash equivalents of $4.17 billion compared with $3.29 billion at the fiscal 2024-end. As of June 29, 2025, long-term debt totaled $14.6 billion compared with $14.3 billion as of Sept. 29, 2024. The current portion of long-term debt as of the quarter’s end was $2.75 billion compared with $1.25 billion as of fiscal 2024-end.
Meanwhile, management declared a quarterly cash dividend of 61 cents per share. The dividend is payable on Aug. 29, 2025, to its shareholders of record as of Aug. 15.
SBUX’s Zacks Rank
Starbucks currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
Recent Consumer Discretionary Releases
Hilton Worldwide Holdings Inc. (HLT - Free Report) reported second-quarter 2025 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate. The top and bottom lines increased on a year-over-year basis.
Hilton delivered strong bottom-line performance in the quarter, underscoring the strength and resilience of its business model. However, top-line results were modestly impacted by unfavorable holiday and calendar shifts, reduced government spending, softer international inbound travel and broader economic uncertainty.
Hasbro, Inc. (HAS - Free Report) reported second-quarter fiscal 2025 results, with earnings and revenues beating the Zacks Consensus Estimate. The top line declined year over year while the bottom line increased from the prior-year's quarter figure. The downside was mainly due to weaker contributions from the Consumer Products and Entertainment segments.
Nonetheless, Hasbro raised its full-year revenue and adjusted EBITDA guidance. The update was supported by strong performance in the Wizards segment, along with steady contributions from the games portfolio, licensing partnerships and digital initiatives. Despite ongoing macroeconomic challenges, Hasbro expects cost efficiency measures and business diversification to support its growth plans for 2025 and beyond.
Mattel, Inc. (MAT - Free Report) reported second-quarter 2025 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top line fell year over year, while the bottom line came in line with the prior-year quarter’s figure.
Mattel delivered a resilient second-quarter performance, underscoring its focus on operational execution amid a challenging macroeconomic backdrop. The company achieved significant gross margin expansion, international growth and continued momentum in its entertainment slate. While global trade dynamics and shifts in retailer ordering patterns weighed on its U.S. business, adjusted EPS held steady year over year.