Quarterly sales spark at Starbucks, shares jump

(Sharecast News) - Shares in Starbucks Corporation jumped on Wednesday, despite a slump in quarterly earnings, after the coffee shop giant posted a long-awaited uptick in sales.

First-quarter net profits at the Seattle-based business tumbled 62.5% to $293.3m, far below Wall Street forecasts for $668m. The slide was attributed to higher staff costs, a spike in coffee prices and tariffs.

However, on a comparable basis global sales rose 4%, and by a forecast-beating 4% in North America, Starbucks' biggest market. They were also the first gains in nearly two years. Consolidated net revenues rose 6.6% to $9.9bn.

Chief executive Brian Niccol is looking to turn around the chain's fortunes by investing in service, including hiring more baristas to cut queues, and overhauling shops. He suspended fiscal guidance shortly after taking on the role in September 2024.

However, the company on Wednesday reintroduced the outlook and predicted global and US comparable store sales growth of 3% or more in the 2026 full year.

The consolidated operating margin was forecast to "slightly improve" year-on-year, with earnings per share in the range of $2.15 and $2.40.

As at 1400 GMT, the stock had put on 7% in pre-market trading.

Niccol said: "Our first-quarter results demonstrate our 'Back to Starbucks' strategy is working, and we believe we're ahead of schedule."

Chief financial officer Cathy Smith added: "We have a clear line of sight to translating topline strength into sustainable earnings growth that positions us for long-term profitable growth."

At at the end of the 13 weeks to 28 December, Starbucks - the world's largest coffee shop chain - had 16,911 stores in the US and 8,011 in China. Combined, the two regions comprise 61% of the company's global portfolio.