Starbucks (SBUX 2.10%) has started to show some comparable-store sales momentum, with global same-store sales growth accelerating in its fiscal first quarter. While the stock has rallied off its lows, it's still down slightly over the past year, as of this writing.
Let's take a closer look at the coffeehouse operator's results and prospects to see if now is a good time to pick up the stock.
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The return of solid same-store sales growth
After taking over as CEO, Brian Niccol was tasked with getting Starbucks growing again. The former Chipotle CEO turned to adding baristas to understaffed shops, coffee-focused menu innovation, brand marketing over discounts, and remodeling.
This quarter showed that these efforts are finally starting to work in boosting sales. Starbucks' global same-store sales rose 4%. Global traffic climbed 3%, while the average ticket increased 1%. It was the first time in two years that the company saw an increase in traffic.
NASDAQ: SBUX
Key Data Points
In North America, its largest market, comparable-store sales also climbed 4%, with traffic up 3%. That compares to flat same-store sales in the prior quarter. International same-store sales jumped 5%, with traffic rising 3% and average ticket up 2%.
Starbucks' second-largest market, China, saw same-store sales jump 7%, with a 2% increase in average ticket and a 2% increase in traffic. In November, the company also announced that it will move China to a licensed model, with Boyu Capital buying a 60% interest in the company's retail operations in the country and Starbucks keeping a 40% stake.
Overall sales jumped 6% to $9.92 billion, while its adjusted earnings per share (EPS) sank 19% to $0.56. The revenue number was ahead of analysts' estimates of $9.67 billion, as compiled by LSEG, but EPS missed the $0.59 consensus.
The company said its sales momentum has continued into January, and it expects global same-store sales growth of 3% or better for fiscal 2026. It is also looking to open 600 to 650 new shops. Starbucks is expecting a slight operating margin improvement for the year, with bigger strides made in the second half.
Is it time to buy the stock?
Starbucks is starting to regain sales momentum, although it has come at the cost of lower operating margins and profits. Before Niccol took over, the company's shops were understaffed, and while it was negatively impacting sales and the customer experience, it was helping the company overearn. It will now look to increased sales and cost savings in other areas to get profits back to where they were.
This is a stock that hasn't moved much in the past five years, but now looks like it could be ready to break out if its momentum can continue and it can return to its past operating margin in the near future.
