A month has gone by since the last earnings report for Starbucks (SBUX Quick QuoteSBUX - Free Report) . Shares have added about 1.3% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Starbucks due for a pullback? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent catalysts for Starbucks Corporation before we dive into how investors and analysts have reacted as of late.

Starbucks Q3 Earnings Beat Estimates, Comp Sales Rise

Starbucks Corporation reported mixed third-quarter fiscal 2026 results, with adjusted earnings beating the Zacks Consensus Estimate but net revenues missing the same. 

Adjusted earnings of 85 cents per share topped the consensus estimate of 66 cents by 28.8% and increased 70% year over year. Net revenues of $9.32 billion missed the consensus mark of $9.44 billion by 1.22% and declined 1.4%. Global comparable store sales increased 7.9%, driven by transaction and ticket growth.

SBUX’s Margins Expand Despite Restructuring Costs

Starbucks’ GAAP operating income increased 4.8% year over year to $980.4 million. GAAP operating margin expanded 60 basis points to 10.5%, supported by sales leverage and lower inflation paired with tariff refunds.

These benefits were partially offset by higher restructuring costs and labor investments largely tied to the “Back to Starbucks” plan. Restructuring and impairment expenses increased to $302.6 million from $20.8 million in the prior-year quarter.

On a non-GAAP basis, operating margin expanded 430 basis points year over year to 14.4%. Product and distribution costs declined 4.3%, while depreciation and amortization expenses decreased 15.4%. General and administrative expenses fell 11.6%.

Starbucks North America Gains on Higher Traffic

North America remained Starbucks’ largest revenue contributor. Segment net revenues increased 6.8% year over year to $7.40 billion, primarily reflecting growth in company-operated store revenues.

Comparable store sales rose 8.1%, driven by a 4.5% increase in comparable transactions and a 3.5% rise in average ticket. The company attributed the improvement to higher delivery sales and strength in customer food attachment and beverage modifications.

North America’s operating income increased 9.8% to $1.01 billion from $918.7 million. Operating margin expanded 30 basis points to 13.6%, aided by sales leverage, lower inflation, tariff refunds and the comparison with Leadership Experience costs in 2025.

Higher restructuring expenses, labor investments supporting the company’s turnaround strategy and unfavorable product mix partly offset the segment’s profitability gains.

SBUX’s International Results Reflect China Shift

International segment net revenues declined 34.2% year over year to $1.32 billion. The decrease primarily reflected the conversion of Starbucks retail operations in China to a licensed joint venture model during the fiscal third quarter.

Comparable store sales grew 5.7%, supported by a 2.6% rise in transactions and a 3.1% increase in average ticket. Starbucks ended the quarter with 22,933 International stores, up 3% year over year.

International operating income declined 7.3% to $252.8 million. However, operating margin expanded 550 basis points to 19.1%, primarily benefiting from the transition of the China business to the licensed joint venture structure. Higher restructuring costs partly offset the margin improvement.

Starbucks’ Channel Development Business Accelerates

Channel Development posted strong fiscal third-quarter growth, with net revenues increasing 21.5% year over year to $587.9 million. This improvement was primarily driven by higher revenues from the Global Coffee Alliance.

Segment operating income increased 40.2% to $306.2 million from $218.4 million. Operating margin expanded 700 basis points to 52.1%, supported by tariff impacts, including refunds.

These benefits were partially offset by product mix shifts and lower income from the North American Coffee Partnership joint venture relative to segment revenue growth.

SBUX Strengthens Cash Position and Reduces Debt

Starbucks ended the quarter with cash and cash equivalents of $3.45 billion, up from $3.22 billion at the end of fiscal 2025. Long-term debt declined to $11.78 billion from $14.58 billion.

During the first three quarters of fiscal 2026, operating activities generated $3.60 billion in cash. Capital expenditures totaled $887.8 million, while cash dividends paid amounted to $2.12 billion.

The company used a portion of the China transaction proceeds to repurchase approximately $1.3 billion of outstanding senior notes through tender offers. Starbucks declared a quarterly dividend of 62 cents per share, payable Aug. 28, 2026, to shareholders of record as of Aug. 14.

Starbucks Raises Fiscal 2026 Earnings Outlook

Starbucks raised its fiscal 2026 outlook following stronger comparable-sales and margin performance. The company now expects full-year U.S. comparable store sales growth slightly above 6%, compared with its previous forecast of at least 5%. Global comparable store sales growth is projected to approach 6%, up from the earlier expectation of at least 5%.

For the fiscal fourth quarter, SBUX expects U.S. comparable store sales growth of at least 6.5%. Consolidated net revenues are projected to remain flat or increase slightly year over year, while non-GAAP operating margin is expected to exceed 11%. Previously, management had called for year-over-year non-GAAP operating margin improvement without providing a specific threshold.

The company raised its adjusted earnings guidance to $2.55-$2.65 per share from the prior range of $2.25-$2.45. Starbucks maintained its plan to open approximately 600-650 net new coffeehouses globally across company-operated and licensed businesses.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a upward trend in fresh estimates.

VGM Scores

Currently, Starbucks has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for value investors.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Starbucks has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Starbucks belongs to the Zacks Retail - Restaurants industry. Another stock from the same industry, Cheesecake Factory (CAKE Quick QuoteCAKE - Free Report) , has gained 8.7% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026.

Cheesecake Factory reported revenues of $1.03 billion in the last reported quarter, representing a year-over-year change of +7.7%. EPS of $1.44 for the same period compares with $1.16 a year ago.

For the current quarter, Cheesecake Factory is expected to post earnings of $0.85 per share, indicating a change of +25% from the year-ago quarter. The Zacks Consensus Estimate has changed +18.7% over the last 30 days.

Cheesecake Factory has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.