Starbucks reported fiscal third-quarter results that topped Wall Street estimates and lifted its full-year outlook, offering the clearest evidence yet that Brian Niccol’s turnaround is moving from narrative to numbers. The shares rose in after-hours trading Wednesday as investors digested a 7.9 percent jump in global comparable-store sales, a beat driven by both traffic and ticket growth, and a revised forecast that now calls for comps of 6 percent or better for the full year.
The numbers behind the beat
Net revenue slipped 1 percent to $9.3 billion, a decline the company attributed entirely to the divestiture of its China operations into a joint venture with Boyu Capital. Adjusted earnings per share climbed 70 percent to $0.85, well ahead of the $0.65 consensus. GAAP EPS of $0.91 rose 86 percent. Net income surged 87 percent to $1.05 billion, comfortably covering the $709 million quarterly dividend obligation. The company declared a $0.62 per share payout payable August 28 to shareholders of record August 14.
North America carries the weight
The North America segment, still the profit engine, posted an 8.1 percent comp increase on a 4.5 percent rise in transactions and a 3.5 percent lift in average ticket. International comps improved 5.7 percent, with transactions up 2.6 percent and ticket up 3.1 percent. This marks the fourth consecutive quarter of global comp growth and the second straight quarter of margin expansion. Niccol framed the results as validation of the "Back to Starbucks" strategy, which prioritizes coffee quality, human connection, and customer experience over throughput metrics.
The China restructure and the dividend math
The Boyu joint venture closed during the quarter, leaving Starbucks with a 40 percent stake and ownership of brand licensing and intellectual property while Boyu holds 60 percent of the operating entity. The deconsolidation removes a drag on reported revenue but also shifts China from a controlled subsidiary to an equity-method investment, altering the earnings mix going forward. CFO Cathy Smith had previously signaled that top-line improvement would precede earnings growth; the current quarter suggests that sequencing is playing out as planned.
Valuation assumes perfection
The stock now trades at roughly 35 times next year’s expected earnings, a multiple that prices in sustained execution across a 41,304-store footprint. The company added 175 net new locations in the quarter. Whether the current valuation holds depends on whether the traffic momentum survives a consumer environment that has punished discretionary spending elsewhere, and whether the China JV delivers earnings consistency without operational control.