Based on nothing more than the most basic of numbers, Starbucks (SBUX -0.74%) is a decent dividend stock. Shares of the chain of coffee shops boast a forward-looking dividend yield of 2.6%, and better still, its quarterly dividend's not only been reliably paid for years, but been raised every year for the past 16 years. And by more than a little. You could certainly do worse.
But could you do better? The $395,000 stake (3,968 shares) you'd need to own in Starbucks just to generate $10,000 in annual dividend income is a lot of money to tie up that could be put to work in ways that make more sense for you, perhaps like the purchase of super-safe 10-year Treasuries, which are currently yielding around 5.1%.
Here's some food for thought.
It's still a stake in a for-profit company Most blue chip dividend stocks are safe enough in the sense that there's no real risk of a complete wipeout of your money. Starbucks in no exception. Every dividend-paying stock is still also an equity stake in a particular company, however, and participation in that organization's fiscal performance.
That's where Starbucks and its stock have let investors down for the better part of the past five years. While it's technically continued growing its top line, the rate of this growth is markedly slower than its pre-pandemic pace. Profits have also stagnated, not to mention been erratic.
SBUX data by YCharts
Blame a combination of leadership turnover, labor woes, and market saturation, much of which is due to Starbucks' own overwhelming presence. As of the latest count, the company was operating 41,304 stores worldwide, with 16,933 of those units found in the United States alone. That doesn't leave a great deal of room for healthy continued expansion.
This doesn't necessarily make Starbucks a horrible income investment. As was noted, it's not only still paying a respectable dividend, but reliably growing it. We're also seeing glimmers of hope that its profit-crimping struggle since 2024 may finally be coming to a close. Last quarter's overall same-store sales were up 7.9%, capping off four consecutive quarters of such growth.
Image source: Getty Images.
There are still lingering concerns, though, like last quarter's slight 1% decline in revenue. It's going to take several quarters of total top-line progress to confirm that Starbucks is capable of making sustained net growth again. Until then, most interested investors are content to remain on the sidelines.
Better options are out there In answer to the titular question, then, no, buying nearly $400,000 worth of Starbucks stock (that's far from guaranteed to perform) just to plug into its dividend isn't worth it.
That's even more so the case given all the other, safer options, like Coca-Cola (KO -2.04%). Despite this stock's 36% rally to record highs over the past 12 months, it's currently yielding a comparable 2.3% and has increased its dividend for 64 consecutive years.
Or there's the aforementioned option of longer-term Treasuries, which -- thanks to recent rate hikes -- now sport yields in excess of 5%. Although these instruments don't offer any capital growth potential, with yields twice those of Coca-Cola shares or an uncertain Starbucks, they might still make more near-term sense to income-minded investors.
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Focus List Spotlight: Starbucks (SBUX - Free Report) Starbucks is a global roaster, marketer and retailer of specialty coffee, operating in 90 markets worldwide. As of March 29, 2026, the company had 41,129 company-operated and licensed stores. The United States and China represented 61% of the global portfolio, with 16,944 stores in the United States and 7,991 in China.
On August 16, 2019, SBUX was added to the Focus List at $95.93 per share. Shares have increased 6.23% to $101.91 since then, and the company is a #2 (Buy) on the Zacks Rank.
For fiscal 2026, four analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.01 to $2.65. SBUX boasts an average earnings surprise of 8.4%.
Earnings for SBUX are forecasted to see growth of 24.4% for the current fiscal year as well.
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Stock to Watch: Starbucks (SBUX - Free Report) Starbucks is a global roaster, marketer and retailer of specialty coffee, operating in 90 markets worldwide. As of March 29, 2026, the company had 41,129 company-operated and licensed stores. The United States and China represented 61% of the global portfolio, with 16,944 stores in the United States and 7,991 in China.
SBUX is a #2 (Buy) on the Zacks Rank, with a VGM Score of B.
Momentum investors should take note of this Retail-Wholesale stock. SBUX has a Momentum Style Score of B, and shares are up 8.8% over the past four weeks.
For fiscal 2026, four analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.01 to $2.65 per share. SBUX boasts an average earnings surprise of +8.4%.
With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, SBUX should be on investors' short list.
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Wall Street expects a year-over-year increase in earnings on lower revenues when Starbucks (SBUX - Free Report) reports results for the quarter ended September 2026. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.
The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on October 29. On the other hand, if they miss, the stock may move lower.
While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise.
Zacks Consensus EstimateThis coffee chain is expected to post quarterly earnings of $0.73 per share in its upcoming report, which represents a year-over-year change of +40.4%.
Revenues are expected to be $9.25 billion, down 3.3% from the year-ago quarter.
Estimate Revisions TrendThe consensus EPS estimate for the quarter has been revised 0.45% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.
Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change.
Price, Consensus and EPS Surprise
Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction).
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.
A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.
Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).
How Have the Numbers Shaped Up for Starbucks?For Starbucks, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +0.24%.
On the other hand, the stock currently carries a Zacks Rank of #2.
So, this combination indicates that Starbucks will most likely beat the consensus EPS estimate.
Does Earnings Surprise History Hold Any Clue?Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.
For the last reported quarter, it was expected that Starbucks would post earnings of $0.66 per share when it actually produced earnings of $0.85, delivering a surprise of +28.79%.
Over the last four quarters, the company has beaten consensus EPS estimates two times.
Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.
That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
Starbucks appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.
An Industry Player's Expected ResultsAmong the stocks in the Zacks Retail - Restaurants industry, Brinker International (EAT - Free Report) , is soon expected to post earnings of $2.49 per share for the quarter ended September 2026. This estimate indicates a year-over-year change of +29%. This quarter's revenue is expected to be $1.45 billion, up 7.3% from the year-ago quarter.
Over the last 30 days, the consensus EPS estimate for Brinker International has been revised 0.3% down to the current level. Nevertheless, the company now has an Earnings ESP of +0.59%, reflecting a higher Most Accurate Estimate.
This Earnings ESP, combined with its Zacks Rank #3 (Hold), suggests that Brinker International will most likely beat the consensus EPS estimate. Over the last four quarters, the company surpassed consensus EPS estimates three times.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Earlier this month, Starbucks (SBUX -0.29%) raised its dividend for the 16th consecutive year, boosting the payout by a modest one cent per share per quarter. Investors who own the stock by Nov. 13 will receive the new $0.63 quarterly dividend on Nov. 27. Annualized, that's $2.52 per share -- good for a forward yield of 2.6%.
Investors would need to own 199 shares to receive at least $500 in yearly dividends. That's a whopping $19,406 investment, based on Starbucks's stock price of $97.52 per share at the time of this writing.
Here's why Starbucks' investment thesis has fundamentally changed in recent years, and why Starbucks has transformed from a high-octane growth stock into a rock-solid dividend stock to buy now.
Image source: Starbucks.
Globalizing the "third place" Howard Schultz was instrumental in elevating Starbucks from a regional coffee bean and equipment merchant into a global sensation featuring quick-service, customizable coffee and tea drinks. Schultz was inspired by a trip to Italy, where local coffeehouses served as a third place, alongside home and work/school.
Starbucks grew rapidly and expanded into new markets by pairing the third-place concept alongside a caffeine-rich, customizable menu. Schultz viewed China as Starbucks's biggest opportunity yet, even predicting in December 2017 that China could one day have twice as many stores as the U.S. However, as of June 28, 2026, Starbucks's total international store count is 22,933, including about 8,000 stores in China, compared to 18,371 in North America.
SBUX data by YCharts
It's been a choppy period for the coffee stock -- to say the least. Over the last seven years, the stock price and gross profit have been virtually flat while revenue is up just 42.1%.
SBUX Starbucks$99.08-$0.29 (-0.29%)
NASDAQ · As of 4:00 PM ET 10/21/26
Reclaiming the third place Starbucks reached saturation in the U.S., and international markets like China have proven more challenging to sustain growth in. Starbucks continues to have success leveraging its rewards program and cutting wait times with mobile order and pay. But those concepts also turned Starbucks into a kind of transaction-based coffee factory that churned out as many drinks as possible rather than one focused on an inviting customer experience. Mobile ordering was instrumental in limiting the pandemic-induced slowdown in order volumes. But even post-pandemic, Starbucks eventually realized that it had leaned too heavily into convenience and transactions rather than friendly service and the in-store coffeehouse experience, which had damaged its brand among partners and customers.
In Starbucks's Leadership Experience event in June 2025, Schulz and CEO Brian Niccol discussed the need to reclaim Starbucks's role as a third place for communities and become a coffee-first company. Since then, Starbucks has implemented a nationwide makeover by bringing back coffeehouse aesthetics with inviting furniture and layouts and restoring a focus on personalization and customer interaction. The strategy is working. On its third-quarter fiscal 2026 earnings call in August, Starbucks said that it had completed 1,000 North America store remodels and was showing a vast improvement in same-store sales in the U.S. and internationally. Starbucks also reduced its company-operated stores in the U.S. by 2.7% year-over-year. And its international company-owned stores dropped from 10,277 to just 2,464 because it converted 7,991 stores in China to licensed stores as part of its diversification of Starbucks retail operations in China. In April, Starbucks finalized a joint venture with Chinese private equity firm Boyu Capital that included selling a 60% stake in Starbucks China retail operations and converting company-operated stores in China to licensed stores. Starbucks hopes to grow its store count in China to 20,000 over time as part of this capital-light licensing model.
Starbucks is guiding for 6% U.S. same-store sales growth Starbucks' new strategy is centered on improving the quality of its stores for partners and customers, managing costs, and growing margins, rather than rapidly growing revenue through new store openings. Its deal with Boyu Capital provides upside potential from expansion in China without the capital intensity of managing company-owned rather than licensed stores.
Starbucks' new strategy is already paying off. Its updated fiscal 2026 guidance now calls for over 6% U.S. same-store sales growth and global comps nearing 6%. Full-year revenue is expected to be flat or slightly up, given a lower U.S. store count and its new operating structure in China. Margins are improving too, with the overall company forecast margin considerably higher at over 11%.
Buying quality companies with growing dividends is an excellent way to participate in the stock market while boosting your passive income stream. Starbucks has been a disappointing stock to own for years, but that could change under its more focused corporate strategy that is already demonstrating tangible results. With an emphasis on operating efficiency over pure-play growth, Starbucks is well-positioned to become a top-tier dividend stock.
The IMF chief warns AI is pushing workers out of careers and into coffee shops, and a 63-year-old who lands at Starbucks faces a Social Security trap that most people never see coming until it is too late to avoid…
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Kristalina Georgieva leads the International Monetary Fund (IMF). She says artificial intelligence is hitting the labor market like a “slow-moving tsunami,” and warns that young people just entering the workforce are the most exposed. Her alarm included a troubling possibility: college graduates struggling to find work in their fields and ending up behind coffee-shop counters instead.
Now picture someone at the other end of a career. Take a hypothetical 63-year-old project manager whose job gets automated away. He finds work at Starbucks (NASDAQ:SBUX | SBUX Price Prediction) paying $30,000 a year and decides to start Social Security to cover the gap. The IMF warning focused on graduates. His problem is still a common one for anyone pushed out of a job before reaching the age for full benefits.
Two things happen when he files early. He locks in a smaller check for life. He also runs into the earnings test, a rule that holds back part of your benefit when your wages pass a yearly cap before reaching the age for full benefits.
How a $30,000 Paycheck Triggers a $2,760 Hold
If he has not yet reached the age for full benefits for the whole year, Social Security holds back $1 for every $2 he earns above $24,480 in 2026. On a $30,000 paycheck, that comes to $2,760 withheld.
Next year the limit goes up to $25,560. With the same pay, the hold shrinks to $2,220.
Someone born in 1963 reaches full retirement at 67, and filing at 63 pays 75% of the full amount.
If his full benefit is $2,000, his early check is $1,500. Social Security usually holds back whole checks until the full amount is covered. That means two checks are held, and the extra $240 comes back to him later.
Check the First-Year Rule Before Doing the Math
The $2,760 calculation assumes he earned only $30,000 that year. But suppose he collected his old salary through June before losing his job. Those wages could push him well past the annual limit and leave him facing much larger withholding. Fortunately, Social Security has a special rule for the first year of retirement.
A special first-year rule can help here. It pays a full check for any whole month he earns $2,040 or less in 2026. The catch is that his barista pay works out to $2,500 a month, which is over that line. The rule would protect months when he wasn’t working, but not months on the Starbucks payroll, and the math is simplest if the new job and the claim both start in January.
Withheld Money Comes Back, but the Early-Filing Cut Stays
When he reaches the age for full benefits, Social Security credits him for the months it withheld his checks. If two full checks were held back, his benefit rises from 75% to about 75.8% of the full amount, or roughly $1,516 a month. It’s a lifetime increase, but a small one.
Filing early has a much bigger effect. Taking at 63 instead of 67 costs him $500 a month for life, or $6,000 a year.
Cost-of-living raises such as next year’s 3.6% are percentages, so they grow the smaller check by less and the gap gets wider over time.
Savings Can Bridge the Gap Without Triggering the Test
The earnings test counts only wages and self-employment income. Money he takes out of a 401(k) or savings account doesn’t count. If the Starbucks paycheck plus modest withdrawals can cover his bills, he could hold off on filing and let his benefit keep growing. Once he reaches the age for full benefits, no earnings test applies, so he can earn any amount without losing benefits.
Those withdrawals add to his taxable income for the year, so it’s worth checking which tax bracket he would land in. That tax bill is worth weighing against the smaller Social Security check he’d collect for the rest of his life.
A Temporary Hold Versus a Lifetime 25% Cut
If he needs the income to stay afloat, filing early is a reasonable choice. If he can manage without it, waiting even a year or two raises every check he will ever get.
Timing also matters more than most people expect. Before filing, add up every wage he earned that year, including pay from before the new job.
Your personal balance sheet may look different, especially if you have a spouse’s benefit or severance pay to consider. Check your earnings and benefit estimates before deciding when to file.
Contact [email protected] for any questions or corrections.
In the latest trading session, Starbucks (SBUX - Free Report) closed at $99.33, marking a +1.49% move from the previous day. The stock's change was more than the S&P 500's daily gain of 0.28%. Meanwhile, the Dow gained 1.02%, and the Nasdaq, a tech-heavy index, lost 0.02%.
The stock of coffee chain has risen by 3.13% in the past month, lagging the Retail-Wholesale sector's gain of 4.46% and overreaching the S&P 500's gain of 0.67%.
The investment community will be paying close attention to the earnings performance of Starbucks in its upcoming release. The company is slated to reveal its earnings on October 29, 2026. On that day, Starbucks is projected to report earnings of $0.72 per share, which would represent year-over-year growth of 38.46%. Our most recent consensus estimate is calling for quarterly revenue of $9.25 billion, down 3.3% from the year-ago period.
For the full year, the Zacks Consensus Estimates project earnings of $2.6 per share and a revenue of $38.03 billion, demonstrating changes of +22.07% and +2.28%, respectively, from the preceding year.
It is also important to note the recent changes to analyst estimates for Starbucks. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.15% higher. Starbucks is holding a Zacks Rank of #3 (Hold) right now.
Valuation is also important, so investors should note that Starbucks has a Forward P/E ratio of 30.96 right now. This indicates a premium in contrast to its industry's Forward P/E of 20.83.
One should further note that SBUX currently holds a PEG ratio of 1.41. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. Retail - Restaurants stocks are, on average, holding a PEG ratio of 1.78 based on yesterday's closing prices.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 89, which puts it in the top 37% of all 250+ industries.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.
Starbucks Corp (NASDAQ:SBUX, XETRA:SRB) is expected to deliver another quarter of strong US sales growth when it reports results on October 29, but investors will be looking for signs its turnaround can sustain momentum as recent tailwinds fade, according to UBS.
The bank forecasts fiscal fourth-quarter North American same-store sales growth of 7.5%, ahead of the consensus estimate of 6.7%, and earnings per share of $0.77 to $0.82, compared with the $0.72 consensus.
The expected performance reflects progress on Starbucks’ “Back to Starbucks” plan, supported by menu innovation, improved service, marketing and loyalty engagement.
UBS expects sales growth to comprise a 3% increase in average ticket and 4.5% growth in transactions. The fall menu, relaunch of the Unicorn Frappuccino, delivery and operational improvements under the Green Apron Service program are expected to support demand.
However, attention will turn to fiscal 2027 guidance and whether Starbucks can maintain growth as comparisons become more difficult.
Investors generally expect management to guide for US same-store sales growth of at least 3%, with estimates clustering around 3% to 4%. Fiscal 2027 earnings expectations broadly centre on the consensus forecast of $3.16 per share.
UBS models North American same-store sales growth of 4.6% for fiscal 2027, although it cautions that recent tailwinds may diminish.
In the third quarter of fiscal 2026, closures of underperforming stores contributed more than 2 percentage points to US same-store sales growth, while delivery added more than 1 point. UBS estimates that more than half of the quarter’s 8.1% growth could reflect benefits that will not recur at the same magnitude.
The recently announced closure of about 250 North American stores could provide further support as customers shift to nearby locations, while improving store productivity and returns.
UBS forecasts fourth-quarter operating margin of 13.4%, above the 12.6% consensus, supported by sales leverage, cost savings and lower incremental labor costs.
Starbucks is targeting $2 billion in gross cost savings through fiscal 2028. UBS considers its 13.5% to 15% fiscal 2028 operating margin target achievable, modelling 15%.
Despite the positive outlook, UBS sees a balanced risk-reward profile, arguing that shares already reflect a substantial multiyear recovery in sales and earnings.
Starbucks (SBUX - Free Report) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.
Over the past month, shares of this coffee chain have returned +3.1%, compared to the Zacks S&P 500 composite's +0.7% change. During this period, the Zacks Retail - Restaurants industry, which Starbucks falls in, has gained 2.1%. The key question now is: What could be the stock's future direction?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Revisions to Earnings EstimatesHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
Starbucks is expected to post earnings of $0.72 per share for the current quarter, representing a year-over-year change of +38.5%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.5%.
For the current fiscal year, the consensus earnings estimate of $2.6 points to a change of +22.1% from the prior year. Over the last 30 days, this estimate has changed +0.2%.
For the next fiscal year, the consensus earnings estimate of $3.16 indicates a change of +21.8% from what Starbucks is expected to report a year ago. Over the past month, the estimate has changed +0.2%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Starbucks is rated Zacks Rank #3 (Hold).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
In the case of Starbucks, the consensus sales estimate of $9.25 billion for the current quarter points to a year-over-year change of -3.3%. The $38.03 billion and $39.05 billion estimates for the current and next fiscal years indicate changes of +2.3% and +2.7%, respectively.
Last Reported Results and Surprise HistoryStarbucks reported revenues of $9.32 billion in the last reported quarter, representing a year-over-year change of -1.4%. EPS of $0.85 for the same period compares with $0.5 a year ago.
Compared to the Zacks Consensus Estimate of $9.44 billion, the reported revenues represent a surprise of -1.22%. The EPS surprise was +28.79%.
Over the last four quarters, Starbucks surpassed consensus EPS estimates two times. The company topped consensus revenue estimates three times over this period.
ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Starbucks is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Starbucks. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
Key Takeaways Starbucks plans FY27 tech upgrades to streamline inventory, staffing, scheduling and store operations.Green Apron Service and Smart Queue improvements are helping Starbucks boost service speed and order accuracy.Starbucks' Q3 operating margin rose 430 basis points YoY to 14.4%, supported by cost efficiencies. Starbucks Corporation (SBUX - Free Report) plans to modernize its technology infrastructure in fiscal 2027, focusing on inventory ordering, staffing, scheduling and point-of-sale systems. These upgrades, part of its Back to Starbucks strategy, aim to simplify coffeehouse operations, improve service efficiency and enhance labor productivity. As customer traffic strengthens, improved operational execution could help Starbucks sustain margin expansion.
The initiative builds on progress under the company's Green Apron Service model, which has improved staffing practices, service consistency and customer experience. Starbucks is also refining its Smart Queue system to enhance order accuracy and speed. In the third quarter of fiscal 2026, the company achieved targeted service times across all access points despite higher transaction volumes. The planned technology upgrades could further streamline store operations, improve labor productivity and support operating margins.
Beyond enhancing store-level productivity, the planned upgrades could complement Starbucks' broader cost-reduction strategy. The company remains on track to achieve $2 billion in gross cost savings through fiscal 2028, targeting product and distribution expenses, operating costs and general and administrative spending. In the fiscal third quarter, consolidated operating margin expanded approximately 430 basis points year over year to 14.4%, aided by stronger sales leverage, cost efficiencies, lower inflation and tariff refunds. Importantly, margins improved even excluding the refunds, highlighting underlying operational progress.
Starbucks' fiscal 2027 technology modernization could support sustained margin expansion by improving labor productivity, inventory management and store-level efficiency. Although implementation challenges and continued investments in staffing and customer experience could weigh on near-term profitability, successful integration of these upgrades could strengthen operating leverage and support long-term earnings growth.
How SBUX’s Peers Are Advancing TechnologyMcDonald’s Corporation (MCD - Free Report) is integrating its major markets onto common app, loyalty, pricing, human resources and finance systems. These investments are intended to reduce costs, accelerate innovation and improve system security and stability. MCD is also working to consolidate its data into a global platform to support future artificial intelligence applications. McDonald’s expects its global systems and process investments to begin generating efficiency benefits in 2027 as it seeks to lower general and administrative expenses as a percentage of systemwide sales.
Dutch Bros Inc. (BROS - Free Report) is refining shop operations to accommodate digital demand, with mobile ordering representing approximately 16% of transactions in second-quarter 2026. The company is evaluating workstation layouts to improve order flow across drive-thru and walk-up windows. BROS is also strengthening customer segmentation and personalization through Dutch Rewards, which accounted for more than 73% of transactions. These capabilities enable offers tailored to purchasing behavior, supporting efforts to increase visit frequency and broaden customer adoption of Dutch Bros’ menu offerings.
For four days in October, shareholders of Chipotle Mexican Grill (CMG -0.13%) got to imagine an exit ramp. The Financial Times reported that Starbucks (SBUX +0.36%) had worked with advisors on a takeover proposal for the fast-casual Mexican chain. The chatter about such a possibility was enough to send Chipotle shares higher and Starbucks shares lower. Then, on Oct. 12, a Starbucks spokesperson shut the story down flatly: "I can confirm for you we are not buying Chipotle."
The rumor was dead almost as fast as it had appeared, which left Chipotle investors back where they started: owning a stock that's down by roughly 30% over the past year, sitting near a 52-week low, with no buyer coming to bail anyone out.
CMG Chipotle Mexican Grill$29.85-$0.04 (-0.13%)
NYSE · As of 4:00 PM ET 10/19/26
Why I don't think the deal made much sense anyway
I understand why the rumor caught fire. Brian Niccol was CEO of Chipotle before he left in 2024 to fix Starbucks, so the connection was obvious. But obvious isn't the same as logical. The coffee business and the burrito business don't have all that much in common -- different dayparts, different labor models, different supply chains. Starbucks is also mid-turnaround itself, trying to fix its own traffic problems under Niccol's "Back to Starbucks" plan. I don't think a company still in the midst of repairing its own operations should take on the second-largest restaurant acquisition in history at the same time. Starbucks shareholders were reportedly uneasy about exactly that, per NBC.
Image source: The Motley Fool.
There's also a deeper issue for anyone calling this a win for "long-term Chipotle investors." An acquisition isn't a continuation of the thesis -- it's an exit from it. If Starbucks had bought Chipotle at a depressed price that was a fraction of Chipotle's prior valuation, that would lock in today's discount rather than rewarding anyone who stuck around for a recovery, per Fortune. A sale at the bottom helps someone who wants out. It doesn't help someone who believes the turnaround still has room to run.
SBUX Starbucks$97.87+$0.35 (+0.36%)
NASDAQ · As of 4:00 PM ET 10/19/26
What Chipotle needs to prove
New Chipotle CEO Scott Boatwright's "Recipe for Growth" plan is already showing results: Comparable sales grew in back-to-back quarters, up 0.5% in Q1 and 2.2% in Q2, after a full year of traffic declines in 2025.
A new high-protein menu, with items starting at $3.50 and a jump to four limited-time offerings per year from the historical two, is aimed at making the brand feel like a better deal without becoming a discount chain.
Here's my concern with that approach: The chain's restaurant-level operating margin fell 220 basis points to 25.2% in the same quarter that traffic improved, as expenses rose due to wage growth and performance-based bonuses. Getting people back in the door while margins shrink isn't the same as getting the high-margin growth machine back. I'd want to see at least two or three more quarters where comparable sales keep climbing and margins stop bleeding at the same time, proof that this is a durable recovery and not a temporary traffic bump bought with value pricing.
My take: not dead, but not proven yet
Chipotle's forward earnings multiple has fallen from the mid-40s a few years ago to around 28 or 29 times today, which tells me the market has already priced in a lot of disappointment. A stock this beaten down doesn't need to achieve perfection to perform for investors, it just needs the turnaround to be real. I don't think Chipotle's best days are behind it, but I also don't think two decent quarters settle the question. The company reports its third-quarter results on Oct. 28, and that print, especially the margin line, will matter more to me than another rumor about who might buy the company.
For investors willing to wait and watch that margin trend closely, Chipotle still looks like a bet worth making. I just wouldn't call it a sure thing yet.
Key Takeaways Starbucks delivered 7.9% global comparable-store sales growth for the fourth consecutive quarter.Operating margin rose 430 basis points to 14.4%, while EPS increased 70% to 85 cents.Higher fiscal 2026 guidance supports recovery, but coffee costs and store closures remain key risks. Starbucks Corporation’s (SBUX - Free Report) shares have gained 15% year to date (“YTD”), outperforming the restaurant industry, which has declined 12% over the same period.
The stock's relative strength likely reflects improving sales momentum, progress in its Back to Starbucks turnaround strategy, recovering operating margins and an improved earnings outlook. The company's latest quarterly results showed stronger customer traffic and encouraging operating performance, prompting management to raise its fiscal 2026 earnings guidance.
In the same time frame, SBUX has outperformed other industry players like McDonald's Corporation (MCD - Free Report) , Chipotle Mexican Grill, Inc. (CMG - Free Report) and Yum! Brands, Inc. (YUM - Free Report) .
Price Performance
Image Source: Zacks Investment Research
Turnaround Strategy Is Gaining TractionStarbucks' Back to Starbucks strategy is centered on improving customer service, strengthening coffeehouse operations and restoring the brand's appeal. In the third quarter of fiscal 2026, the company delivered its fourth consecutive quarter of positive global comparable-store sales growth. Global comps increased 7.9%, reflecting improving customer traffic and stronger sales performance.
In the United States, comparable sales grew 7.9%, driven by a 4.2% increase in transactions and 3.6% growth in average ticket. Management attributed the progress to better store execution, improved staffing, menu innovation and stronger customer experiences. The limited contribution from pricing to average-ticket growth also suggests that traffic and product mix are playing important roles in the recovery.
The Green Apron Service model has helped Starbucks improve staffing, coaching and operating routines. Management reported that service-time targets were achieved across its ordering channels despite transaction growth. Food availability also approached 99%, approximately 10 percentage points higher than a year earlier. These improvements could support customer satisfaction, repeat visits and more consistent performance across coffeehouses.
Menu Innovation and Rewards Support Sales GrowthProduct innovation and marketing are providing additional growth opportunities. Starbucks' Refreshers platform delivered double-digit year-over-year revenue growth in the United States during the third quarter. Customizable beverages and new flavors have helped attract customers across different age groups and dayparts. Management also highlighted the growing opportunity to boost afternoon visits through beverages, food offerings and improved merchandising.
The revamped Starbucks Rewards program is another potential growth driver. Active 90-day membership in the United States reached 35.8 million, with engagement and average stored-value card reloads exceeding management's expectations. A stronger loyalty ecosystem could encourage more frequent visits and deepen customer relationships.
Starbucks is also improving its coffeehouse environment. The company surpassed 1,000 coffeehouse uplifts across North America ahead of its fiscal 2026 target and aims to complete at least 1,500 by year-end. Early results indicate higher transactions across store formats and ordering channels, while the upgrades cost approximately $150,000 per location on average. The relatively modest investment could support customer experience improvements without the disruption associated with extensive remodels.
Margin Recovery and Higher Guidance Offer SupportStarbucks' profitability is showing signs of recovery. Third-quarter consolidated operating margin expanded 430 basis points year over year to 14.4%, while earnings per share increased 70% to 85 cents. Sales leverage, cost savings and improved operating execution supported margin expansion.
The company remains on track with its $2 billion gross cost-savings plan through fiscal 2028. It also repaid approximately $1.8 billion of debt using part of the proceeds from its China transaction, lowering leverage to 2.9 times and strengthening financial flexibility.
Management raised its fiscal 2026 adjusted EPS guidance to $2.55-$2.65 and expects consolidated operating margin to exceed 11%. It anticipates U.S. comparable-store sales growth of more than 6% and global comps growth approaching 6% for the full fiscal year. These targets suggest continued improvement, although successful execution remains essential.
Costs, Store Closures and Execution Remain RisksDespite the encouraging trends, Starbucks faces several challenges. Third-quarter consolidated revenues declined approximately 1% year over year to $9.3 billion, largely because the transition of its China retail business to a joint venture changed how revenues are reported. Although the new structure is intended to create a more capital-efficient international business, the long-term economics remain subject to execution and market conditions.
Coffee costs continue to pressure margins, while persistent weakness in consumer sentiment could constrain discretionary spending. Starbucks also acknowledged that some North American coffeehouses may require closure because of weak performance, location issues or unattractive economics. Net new company-operated store growth in North America could remain modest through fiscal 2027.
Additionally, part of the third-quarter margin improvement benefited from reciprocal tariff refunds. Management indicated that the company had largely received the refunds to which it was entitled, making sustained improvement increasingly dependent on sales growth and operational efficiencies.
SBUX’s Estimate Revision TrendThe Zacks Consensus Estimate for SBUX's fiscal 2026 and 2027 EPS moved down in the past 30 days, indicating negative sentiment among analysts for its earnings. The company's earnings in fiscal 2026 and 2027 are likely to witness growth of 21.6% and 21.6% year over year, respectively.
Image Source: Zacks Investment Research
Taking a Look at Starbucks’ ValuationSBUX stock is trading below the industry. With a forward 12-month price/sales ratio of 2.83X, below its industry average. Meanwhile, other industry players like McDonald's, Chipotle Mexican Grill and Yum! Brands are trading at 5.95X, 2.75X and 4.6X, respectively.
P/S (F12M)
Image Source: Zacks Investment Research
Is SBUX Stock a Buy Now?Starbucks' improving traffic, product innovation, operating discipline and higher earnings outlook support the case for further recovery. However, cost pressures, potential store closures and the need to sustain comparable-sales growth could limit upside. With a Zacks Rank #3 (Hold), investors may prefer to monitor the company's progress in delivering profitable growth before taking a more aggressive position in the stock.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Bloomberg's Daniela Sirtori joins Scarlet Fu on "Bloomberg Deals." Starbucks said it's not buying Chipotle Mexican Grill, tamping down speculation about what could have been one of the restaurant sector's largest-ever deals.
Vertrix Wealth Management LLC grew its position in shares of Starbucks Corporation (NASDAQ:SBUX – Free Report) by 27.6% during the third quarter, according to its most recent filing with the Securities and Exchange Commission (SEC). The fund owned 32,404 shares of the coffee company’s stock after acquiring an additional 7,017 shares during the quarter. Vertrix Wealth Management LLC’s holdings in Starbucks were worth $3,045,000 as of its most recent filing with the Securities and Exchange Commission (SEC).
Several other institutional investors have also recently made changes to their positions in SBUX. BlackRock Inc. purchased a new position in Starbucks during the second quarter worth about $8,504,509,000. State Street Corp increased its stake in Starbucks by 3.2% in the 2nd quarter. State Street Corp now owns 49,260,268 shares of the coffee company’s stock valued at $5,033,907,000 after buying an additional 1,530,497 shares during the last quarter. T. Rowe Price Investment Management Inc. increased its stake in Starbucks by 65.9% in the 4th quarter. T. Rowe Price Investment Management Inc. now owns 19,447,854 shares of the coffee company’s stock valued at $1,637,704,000 after buying an additional 7,725,547 shares during the last quarter. Bank of America Corp DE bought a new position in shares of Starbucks during the 2nd quarter worth approximately $1,581,287,000. Finally, Invesco Ltd. grew its holdings in shares of Starbucks by 7.5% in the fourth quarter. Invesco Ltd. now owns 14,607,392 shares of the coffee company’s stock valued at $1,230,088,000 after acquiring an additional 1,016,898 shares in the last quarter. Institutional investors own 72.29% of the company’s stock.
Trending Headlines about Starbucks Here are the key news stories impacting Starbucks this week:
Positive Sentiment: Starbucks ruled out a Chipotle acquisition. A company spokesperson said, “We are not buying Chipotle,” ending several days of takeover speculation. Investors viewed the decision as favorable because Starbucks can remain focused on improving its core coffee business rather than funding and integrating a large restaurant acquisition. Starbucks says it is not buying Chipotle after takeover speculation Positive Sentiment: Dividend growth supports the shareholder-return story. Coverage reported that Starbucks raised its dividend while continuing its turnaround. The increase may appeal to income-focused investors, although the company’s ability to sustain dividend growth will depend on improving earnings and cash flow. 3 Stocks Raise Dividends, But Which Has Room to Keep Growing? Insider Buying and Selling In other news, CEO Brady Brewer sold 2,229 shares of Starbucks stock in a transaction on Friday, September 4th. The shares were sold at an average price of $105.60, for a total transaction of $235,382.40. Following the completion of the sale, the chief executive officer directly owned 73,149 shares of the company’s stock, valued at approximately $7,724,534.40. The trade was a 2.96% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last three months, insiders have sold 6,099 shares of company stock valued at $627,135. 0.03% of the stock is owned by insiders. Starbucks Trading Up 1.7% SBUX stock opened at $92.29 on Tuesday. The firm has a 50 day moving average of $101.02 and a 200-day moving average of $100.96. Starbucks Corporation has a 12 month low of $77.99 and a 12 month high of $110.51. The firm has a market capitalization of $105.21 billion, a P/E ratio of 53.04, a price-to-earnings-growth ratio of 1.31 and a beta of 0.98.
Starbucks (NASDAQ:SBUX – Get Free Report) last released its quarterly earnings results on Wednesday, July 29th. The coffee company reported $0.85 EPS for the quarter, beating analysts’ consensus estimates of $0.66 by $0.19. Starbucks had a net margin of 5.17% and a negative return on equity of 34.10%. The firm had revenue of $9.32 billion during the quarter, compared to analyst estimates of $9.17 billion. During the same period in the previous year, the business earned $0.50 EPS. The business’s revenue for the quarter was down 1.4% on a year-over-year basis. Starbucks has set its FY 2026 guidance at 2.550-2.650 EPS. Sell-side analysts predict that Starbucks Corporation will post 2.59 EPS for the current year.
Starbucks Increases Dividend The business also recently declared a quarterly dividend, which will be paid on Friday, November 27th. Shareholders of record on Friday, November 13th will be paid a $0.63 dividend. The ex-dividend date of this dividend is Friday, November 13th. This represents a $2.52 dividend on an annualized basis and a yield of 2.7%. This is a boost from Starbucks’s previous quarterly dividend of $0.62. Starbucks’s dividend payout ratio is presently 142.53%.
Wall Street Analysts Forecast Growth SBUX has been the subject of a number of research analyst reports. UBS Group reaffirmed a “neutral” rating and set a $105.00 price target (down from $112.00) on shares of Starbucks in a research report on Thursday. Gordon Haskett lifted their price objective on shares of Starbucks from $110.00 to $118.00 and gave the stock a “hold” rating in a research report on Thursday, July 30th. Sanford C. Bernstein cut shares of Starbucks from an “outperform” rating to a “market perform” rating in a research note on Monday, August 3rd. William Blair reissued an “outperform” rating on shares of Starbucks in a research report on Thursday. Finally, Argus increased their target price on shares of Starbucks from $112.00 to $120.00 and gave the company a “buy” rating in a research report on Friday, July 31st. Twenty-three equities research analysts have rated the stock with a Buy rating, twelve have issued a Hold rating and five have given a Sell rating to the company’s stock. According to data from MarketBeat.com, Starbucks currently has a consensus rating of “Hold” and an average target price of $110.80.
Check Out Our Latest Analysis on SBUX
Starbucks Company Profile (Free Report)
Starbucks Corporation is a global specialty coffee company that operates coffeehouses and sells coffee, tea and other beverages, along with food products and merchandise. Its menu includes brewed coffee, espresso-based drinks, cold beverages, teas, bakery items and ready-to-eat food. Starbucks also markets packaged coffee, ready-to-drink beverages and related products through retail and grocery channels, often through licensing and other business partnerships.
Founded in Seattle in 1971, Starbucks expanded from a local coffee retailer into an international brand.
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At 60 with $230,000 saved and five years until Medicare, every dollar she pulls from her 401(k) to pay insurance premiums makes the next year harder. There is a way to protect the account entirely, and it involves a green apron.
In the latest close session, Starbucks (SBUX - Free Report) was up +1.69% at $92.29. The stock's performance was ahead of the S&P 500's daily loss of 0.06%. On the other hand, the Dow registered a gain of 0.38%, and the technology-centric Nasdaq decreased by 0.44%.
The coffee chain's stock has dropped by 8.09% in the past month, falling short of the Retail-Wholesale sector's gain of 1.66% and the S&P 500's gain of 2.36%.
The investment community will be paying close attention to the earnings performance of Starbucks in its upcoming release. The company is slated to reveal its earnings on October 29, 2026. The company is forecasted to report an EPS of $0.72, showcasing a 38.46% upward movement from the corresponding quarter of the prior year. Our most recent consensus estimate is calling for quarterly revenue of $9.25 billion, down 3.3% from the year-ago period.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $2.59 per share and a revenue of $38.02 billion, representing changes of +21.6% and +2.26%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for Starbucks. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.8% upward. Starbucks currently has a Zacks Rank of #3 (Hold).
With respect to valuation, Starbucks is currently being traded at a Forward P/E ratio of 28.74. This denotes a premium relative to the industry average Forward P/E of 19.88.
We can additionally observe that SBUX currently boasts a PEG ratio of 1.31. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Retail - Restaurants industry currently had an average PEG ratio of 1.77 as of yesterday's close.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 102, finds itself in the top 42% echelons of all 250+ industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.
Chipotle Mexican Grill Inc (NYSE:CMG) shares fell 4% to $30.20 as Starbucks Corp (NASDAQ:SBUX, XETRA:SRB) rose 2% to $92.13 after the coffeehouse chain ruled out a takeover of the burrito restaurant group.
Starbucks said it was not buying Chipotle, ending speculation sparked by a report that it had hired advisers to explore a potential acquisition.
The denial reversed some of the market excitement surrounding the proposed deal, which had lifted Chipotle shares after the initial report last Thursday. The report indicated that Starbucks had explored a takeover and worked with advisers on a possible proposal.
Starbucks said it remained focused on its “Back to Starbucks” strategy, a turnaround programme aimed at improving the coffee chain's performance and customer experience.
The potential acquisition would have reunited Starbucks chief executive Brian Niccol with Chipotle, which he led from 2018 until leaving for the coffee group in 2024.
A transaction would also have represented one of the largest deals in restaurant industry history, combining two major American food and beverage brands.
However, the takeover speculation had raised questions about the strategic fit between the businesses and the financial demands of a deal, particularly as Starbucks continues to focus on its recovery.
Starbucks is expected to report its latest financial results later in October, with investors watching for progress on its turnaround strategy.
Chipotle continues to face pressure from muted consumer demand and rising operating expenses, challenges that have weighed on the restaurant chain independently of the takeover speculation. The company highlighted those pressures before the acquisition rumours emerged.
Starbucks on Monday denied that it is considering acquiring Chipotle Mexican Grill in what would be the biggest ever restaurant takeover.
"Starbucks is not buying Chipotle," a Starbucks spokesperson told CNBC.
Chipotle's stock was down more than 2% in premarket trading Monday following the denial, while Starbucks shares were more than 1% higher.
The coffee giant's denial comes after days of rumors about a potential mega-deal between the two restaurant companies.
On Thursday, the Financial Times reported that Starbucks has been working with advisers on a takeover proposal of Chipotle in recent months. The newspaper cited people familiar with the matter.
Earlier in October, Semafor reported that Chipotle had hired advisers to defend against activist investors or an unwanted takeover bid. The fast-casual chain is trying to recover from a rocky 2025, when traffic to its restaurants fell. Chipotle shares are down about 20% over the last year, making it a cheaper target.
The deal rumors sent shares of Chipotle higher, while Starbucks stock fell on the reports.
Chipotle investors were looking forward to a potential reunion with Brian Niccol, who previously led Chipotle and is now CEO of Starbucks. But Starbucks shareholders were largely concerned about an expensive distraction while the coffee chain is in the middle of its own turnaround.
Could Starbucks really buy Chipotle? Restaurant analyst John Tower tells Yahoo Finance Executive Editor Brian Sozzi a deal is highly unlikely, but he won't rule it out, given CEO Brian Niccol's history at both companies.
Starbucks once seemed unstoppable, expanding from 16,000 stores to 38,000 in just six years, yet something quietly broke along the way. A new CEO, a reshaped menu, and a bold bet in China have done little to convince shareholders that…
For years, Starbucks (NASDAQ: SBUX) was a growth company and a growth stock. In 2016, it had about 16,000 stores, including company-owned and franchised locations. By 2022, it had reached 38,000 stores, and that growth began to flatten. Investors started to beat down its shares at the same time. Comparable sales, which also suffered, have begun to grow after a period of decline. That has not been enough. Shares are down 16% over the last five years. The S&P 500 is 75% higher. Could it be worse? Sure, but not by much.
What are investors seeing? Growth stopped. One problem was revenue. The other was comparable store sales. However, in the most recent quarter, comparable store sales rose 7.9%. But revenue was flat at $9.3 billion. It showed progress and was enough to give the stock a bump, but it was not sustainable.
And Starbucks abandoned its primary global growth initiative. Boyu Capital in China took a 60% stake. Starbucks kept 40% and “continues to own and license the brand and intellectual property to the joint venture.” The venture set a goal of reaching 20,000 stores from the current 8,000. However, what evidence is there that a new controlling shareholder can do that? Local coffee store leader Luckin’ Coffee has 35,000 stores worldwide, most of which are in China.
Some hoped new CEO Brian Niccol could carry over success from his last job at Chipotle (NYSE: CMG). He began by closing underperforming Starbucks locations, setting a dress code for local store staff, making modest personnel cuts, removing low-performing items from the menu, and reducing customer wait times. Shareholders viewed this as window dressing. The stock is down 10% in the last month.
How many investors believe Starbucks can end its five-year stock slide? Not many.
Contact [email protected] for any questions or corrections.
Starbucks Corporation (NASDAQ:SBUX) stock edged lower Friday as investors weighed reports of a potential acquisition of Chipotle Mexican Grill Inc. (NYSE:CMG) against concerns over Starbucks’ ongoing turnaround.
The Financial Times reported Thursday that Starbucks had spent months consulting advisers about a possible bid for Chipotle, which has a market value of nearly $39 billion.
Together, Starbucks and Chipotle generated nearly $50 billion in revenue last year.
However, it remains unclear whether Starbucks has submitted a formal offer. A deal is far from certain.
Potential Chipotle Deal Raises Turnaround ConcernsThe acquisition could rank among the largest deals in restaurant industry history. However, analysts worry it could distract Starbucks CEO Brian Niccol from his “Back to Starbucks” turnaround plan.
Niccol previously led Chipotle for more than six years, helping the restaurant chain recover from a food-safety crisis.
Wall Street Questions Deal RisksSeaport Research analyst Eric Gonzalez warned that acquiring Chipotle could complicate Starbucks’ recovery.
Meanwhile, Zacks Investment Management’s Brian Mulberry cautioned that taking on substantial debt amid rising bond yields could unsettle investors.
Separately, UBS lowered its Starbucks price forecast to $105 from $112 on Thursday while maintaining a Neutral rating.
UBS acknowledged progress in Starbucks’ turnaround, citing improving U.S. traffic, comparable sales, digital initiatives and menu changes.
However, consumer spending pressures persist. The firm believes the company’s valuation already reflects expectations for a strong multiyear recovery.
Analysts maintain a consensus Buy rating on the stock, with an average price forecast of $111.19.
On Friday, D.A. Davidson maintained its Neutral rating and $110 price forecast. UBS lowered its price forecast to $105 on Thursday while maintaining a Neutral rating. JPMorgan also reduced its price forecast to $105 on Sept. 29 while maintaining an Overweight rating.
Earnings OutlookStarbucks is scheduled to report its next quarterly results on Oct. 29, 2026.
Analysts expect earnings of 71 cents per share, up from 52 cents a year earlier. Meanwhile, revenue is projected to decline to $9.21 billion from $9.57 billion.
The stock trades at a price-to-earnings ratio of 53.9, reflecting a premium valuation.
ETF ExposureSBUX has a 17.05% weighting in the Corgi Coffee & Energy Drinks ETF (BATS:BREW). The stock also accounts for 2.91% of the State Street Consumer Discretionary Select Sector SPDR ETF (NYSE:XLY) and 2.55% of the Capital Group Conservative Equity ETF (NYSE:CGCV).
As a result, flows into and out of these funds could influence trading activity in SBUX, depending on fund structure and rebalancing activity.
SBUX Price ActionSBUX Price Action: Starbucks shares were down 0.01% at $93.20 during premarket trading on Friday, according to Benzinga Pro data.
Starbucks (SBUX - Free Report) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.
Shares of this coffee chain have returned -6.1% over the past month versus the Zacks S&P 500 composite's +1.3% change. The Zacks Retail - Restaurants industry, to which Starbucks belongs, has lost 6.8% over this period. Now the key question is: Where could the stock be headed in the near term?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Earnings Estimate RevisionsRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For the current quarter, Starbucks is expected to post earnings of $0.72 per share, indicating a change of +38.5% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.6% over the last 30 days.
The consensus earnings estimate of $2.59 for the current fiscal year indicates a year-over-year change of +21.6%. This estimate has changed +0.8% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $3.16 indicates a change of +21.8% from what Starbucks is expected to report a year ago. Over the past month, the estimate has changed +0.1%.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Starbucks.
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
For Starbucks, the consensus sales estimate for the current quarter of $9.25 billion indicates a year-over-year change of -3.3%. For the current and next fiscal years, $38.02 billion and $38.99 billion estimates indicate +2.3% and +2.5% changes, respectively.
Last Reported Results and Surprise HistoryStarbucks reported revenues of $9.32 billion in the last reported quarter, representing a year-over-year change of -1.4%. EPS of $0.85 for the same period compares with $0.5 a year ago.
Compared to the Zacks Consensus Estimate of $9.44 billion, the reported revenues represent a surprise of -1.22%. The EPS surprise was +28.79%.
Over the last four quarters, Starbucks surpassed consensus EPS estimates two times. The company topped consensus revenue estimates three times over this period.
ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Starbucks is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Starbucks. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
Starbucks fell more than 3%, while Chipotle jumped nearly 7% on the report. Summary
Chipotle is valued at roughly $41 billion.
Shares of Starbucks Corp. (SBUX, Financials), the world's largest coffee chain, sank more than 3% Thursday after a report suggested the firm had contemplated buying Chipotle Mexican Grill in what might be one of the biggest restaurant acquisitions ever.
Shares of Chipotle jumped roughly 7% on the announcement.
Starbucks has been working with consultants on a possible acquisition deal in recent months, though the status of those negotiations is unknown. Both companies declined to comment and there is no promise there will be a merger.
The link begins with Starbucks CEO Brian Niccol.
Niccol spent six years with Chipotle before joining Starbucks in 2024. His prior experience with the burrito company may help explain the strategic interest, especially as Starbucks attempts to boost its food offerings. But the market response suggests the risk.
Chipotle is valued at over $41 billion, suggesting that a buyout would be a significant investment. Starbucks is also currently executing its Back to Starbucks turnaround, and investors may wonder if such a big deal would be a distraction for management at a time when the initiative is starting to show promise.
Analysts also questioned how much operational overlap there is between the two restaurant operations.
That leaves investors with a greater concern than can Starbucks purchase Chipotle: will owning it make Starbucks more valuable?
The next catalyst will be any indication from either business that acquisition talks are moving forward.
Disclosures I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours.
SEATTLE--(BUSINESS WIRE)--Starbucks Corporation (Nasdaq: SBUX) plans to release its fourth quarter and full fiscal year 2026 financial results after market close on Thursday, October 29, 2026, with a conference call to follow at 1:15 p.m. Pacific Time. The conference call will be webcast, including closed captioning, and can be accessed on the company's website at https://investor.starbucks.com/. A replay of the webcast will be available on the company's website until the end of day, Friday, De.
Comprehensive cross-platform coverage of the U.S. market close on Bloomberg Television, Bloomberg Radio, and YouTube with Romaine Bostick, Jess Menton, Carol Massar and Stacey Vanek Smith. -------- More on Bloomberg Television and Markets Like this video?
Are the worlds of frappuccinos and guacamole colliding? If recent reporting proves out, that could be the case.
Starbucks is exploring a potential takeover of Chipotle, in what would amount to a restaurant megadeal, according to reporting from The Financial Times on Thursday. The story says that the deal would be the largest restaurant merger ever, as Chipotle is worth roughly $41 billion — although it’s unclear whether Starbucks had actually made an offer for the burrito chain, or if it was only in discussion.
Notably, Starbucks CEO Brian Niccol previously held the same title at Chipotle and moved to the coffee giant in 2024. Since then, Chipotle has struggled, at least in the markets. Over the past year, Chipotle’s stock is down 19.4%, while Starbucks’ stock is up 11.5%. The rumored takeover news, however, has had the opposite effect. On Thursday, Chipotle’s stock was up more than 7% as of 1:30 PM ET, and Starbucks’ was down 4.5%.
Again, though, it’s unclear how serious the rumored merger is, and if it is, how it would be facilitated. Starbucks is the second-largest dining chain in the world by market cap, trailing only McDonald’s, with a value of roughly $103 billion. Chipotle’s value is, as noted, around $41 billion, and the combined company would rival McDonald’s size, and leave every other company well behind.
But there are hurdles. “These deals may sound good on paper, but in reality they are exceedingly difficult to execute,” Jonathan Maze, the Editor-in-Chief of Restaurant Business Magazine, wrote on X.
“Jack in the Box bought Del Taco and started thinking it’d be a multi-brand operator. That lasted three years. And Del Taco is undoing a bunch of things that Jack in the Box did. For instance, Jack switched some of Del Taco’s ingredients to save money and achieve some of those ‘synergies’ these deals promote. Customers hated the changes.”
Niccol, since moving to Starbucks, has made sweeping changes at the company as well. He’s renovated stores, added thousands of seats to its cafes, added more staff, simplified the menu, and added personal touches—such as baristas writing messages on cups. He’s also closed hundreds of stores to help improve the company’s bottom line.
The extended deadline for the Most Innovative Companies Awards is Friday, October 9, at 11:59 p.m. PT. Apply today.
Starbucks explored a takeover of Chipotle Mexican Grill, the Financial Times reported Thursday, in a move that would reunite Chief Executive Brian Niccol with the burrito chain he led before joining the coffee giant two year ago.
The coffee chain has worked with advisers in recent months on a takeover proposal for Chipotle, the FT reported, citing people familiar with the matter.
Starbucks and Chipotle did not immediately respond to Reuters requests for comment.
A deal would unite two of the US restaurant industry’s best-known brands and deepen Starbucks CEO Brian Niccol’s ties to Chipotle, where he built his reputation before taking the helm at the coffee chain. Bloomberg via Getty Images Shares of Chipotle, which has a market capitalization of nearly $39 billion, were up about 6% on Thursday, while those of Starbucks were down about 3%. Starbucks is worth about $107 billion, according to LSEG data.
The burrito chain has been contending with softer traffic as consumers pull back on discretionary spending, while higher food and labor costs have pressured margins across the industry. Its shares are down about 17% so far this year.
A potential deal could also accelerate Chipotle’s international expansion, analysts said.
“What I like about this potential is the opportunity CEO Brian Niccol would have to leverage Starbucks’ licensed partnerships in Europe to expand Chipotle more aggressively,” Jim Sanderson, analyst at Northcoast Research said.
As of the end of last year, Chipotle had nearly 4,000 restaurants in the US and about 100 international Chipotle restaurants. Meanwhile Starbucks has roughly 40,000 stores globally with roughly 18,000 in North America.
The coffee chain has worked with advisers in recent months on a takeover proposal for Chipotle, the FT reported. Electric Egg Ltd. – stock.adobe.com Niccol joined Starbucks in 2024 after spending six years at Chipotle, where he was credited with overseeing a turnaround after the company’s food-safety crises and expanding its digital business, helping drive years of strong sales growth.
He was brought in to Starbucks to turn around the business and in the last two years has aimed to improve customer experience through a simplified menu and shortened wait times, fueling four straight quarters of comparable sales growth.
“We have more work to do,” Niccol said in July after the company raised its annual sales and profit forecasts.
“The timing of this would be a little weird, given that Starbucks is in the middle of their transformation and hasn’t yet shown the margin improvement investors are probably hoping for. Instead of jump-starting the transformation, at first blush, this seems more like jumping the shark instead,” said Brian Jacobsen, Chief Economic Strategist, Annex Wealth Management.
Recognizing its Sixteenth Consecutive Annual Increase
SEATTLE--(BUSINESS WIRE)--Starbucks Corporation (NASDAQ: SBUX) today announced that its Board of Directors has approved an increase in the company’s quarterly cash dividend from $0.62 to $0.63 per share of outstanding Common Stock. The increased dividend will be payable in cash on November 27, 2026, to shareholders of record on November 13, 2026. This change reflects an annualized dividend rate of $2.52 per share.
“Today’s dividend increase reflects our continued confidence and belief that disciplined execution of our Back to Starbucks strategy will drive sustainable long-term growth and value creation,” said Cathy Smith, chief financial officer.
Starbucks Coffee Company first initiated its dividend program in 2010 with a quarterly payout of $0.05 per share and has since grown its dividend at a compound annual growth rate of approximately 17%. This growth underscores the company’s long-standing commitment to returning value to shareholders.
About Starbucks
Since 1971, Starbucks Coffee Company has been committed to responsibly sourcing and roasting high-quality arabica coffee. Today, with a global footprint of more than 41,000 company-operated and licensed coffeehouses and a growing presence in consumer-packaged goods, we are the world's premier purveyor of specialty coffee. Through our unwavering commitment to excellence and our guiding principles, we bring the unique Starbucks Experience to life for every customer through every cup. To share in the experience, please visit us in our coffeehouses or online at about.starbucks.com or www.starbucks.com.
Forward-Looking Statements
Certain statements contained herein are “forward-looking” statements within the meaning of applicable securities laws and regulations regarding future events and the potential future results of Starbucks Corporation (together with its subsidiaries). They often include words such as “believes,” “continues,” “expects,” “anticipates,” “forecasts,” “estimates,” “intends,” “plans,” “seeks,” or words of similar meaning, or future or conditional verbs, such as “will,” “should,” “could,” “would,” “may,” “aims,” “intends,” or “projects,” and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. By their nature, forward-looking statements involve risks, uncertainties, and other factors (many beyond our control) that could cause our actual results to differ materially from our historical experience or from our current expectations or projections. Our forward-looking statements, and the risks and uncertainties related thereto, include, but are not limited to, those described under the “Risk Factors” and “Management's Discussion and Analysis of Financial Condition and Results of Operations” sections of the company’s most recently filed periodic reports on Form 10-K and Form 10-Q and in other filings with the U.S. Securities and Exchange Commission, as well as, among others:
our ability to preserve, grow, and leverage our brands;the impact of our brand, marketing, promotional, advertising, and pricing strategies, platforms, reformulations, innovations, or customer experience initiatives or investments;the costs and risks associated with, and the successful and timely execution and effects of, our existing and any future business opportunities, expansions, initiatives, strategies, investments, transformation efforts, and plans, including our “Back to Starbucks” strategy and our restructuring plans;the costs and risks associated with, and the successful execution and effects of, strategic changes to our ownership and operating structure, including as a result of acquisitions, divestitures, other strategic transactions or entry into joint ventures, including our joint venture with respect to Starbucks retail operations in China;our ability to align our investment efforts with our strategic goals;evolving consumer preferences, demand, consumption, or spending behavior, reduction in discretionary spending and price increases, and our ability to anticipate or react to these changes;the ability of our business partners, suppliers, and third-party providers to fulfill their responsibilities and commitments and our reliance on certain key business partners and suppliers;the potential negative effects of food or beverage-safety incidents, or product recalls, including any perceived association of our products or brands with such incidents;our ability to open new coffeehouses and efficiently maintain the attractiveness of our existing coffeehouses and manage related costs;our heavy reliance on the financial performance of our North America operating segment and our dependence on the performance and growth of certain international markets;our ability to operate and successfully expand our footprint in international markets, which is influenced by factors distinct from our North America operating segment;inherent risks of operating a global business, including changing conditions in our markets; local factors affecting coffeehouse openings; protectionist trade or foreign investment policies, including trade restrictions, tariffs, quotas, import/export regulations, customs restrictions, sanctions, countersanctions, and retaliatory measures; compliance with local laws and other regulations; and local labor policies and conditions, including labor strikes and work stoppages;higher costs, lower quality, or unavailability of coffee, dairy, cocoa, energy, water, raw materials, packaging, or product ingredients and related volatility;the ability of our supply chain to meet current or future business needs and our ability to scale and improve our forecasting, planning, production, and logistics management;the potential impact on our supply chain and operations of adverse weather conditions, natural disasters, or significant increases in logistics costs;a worsening in the terms and conditions upon which we engage with our manufacturers and source suppliers;the impact of unfavorable macroeconomic conditions and other factors, including economic slowdowns or recessions, rising real estate costs, supply chain disruptions, climate change and extreme weather events, inflation and interest rate fluctuations, government shutdowns, labor unrest, geopolitical instability, disruptions in credit markets and foreign currency exchange rate volatility;failure to meet market expectations for our financial performance or any announced guidance and the impact thereof;failure to attract or retain key executive or partner talent;changes in the availability and cost of labor, including any union organizing efforts and our responses to such efforts;the impact of, and our ability to respond to, substantial competition from new entrants, consolidations by competitors, and other competitive activities, such as pricing actions (including price reductions, promotions, discounting, couponing, or free goods); marketing; category expansion; product introductions; or entry or expansion in our geographic markets;evolving corporate governance and public disclosure regulations and expectations, including with respect to sustainability matters;the potential impact of activist shareholder actions or tactics;failure to comply with applicable laws and complex and changing legal and regulatory requirements, including those governing privacy, data protection, artificial intelligence, and other emerging technologies;the impact or likelihood of significant legal disputes and proceedings or government investigations;the unauthorized access, use, theft, or destruction of our data, or of our proprietary or confidential information, including as a result of increasingly sophisticated threats enabled or accelerated by artificial intelligence, and the impact thereof;potential negative effects of, and our ability to respond to, a material failure, inadequacy, or interruption of our information technology systems or digital platforms, or those of our third-party business partners or service providers, or failure to comply with data protection laws; andour ability to adequately protect our intellectual property or adequately ensure that we are not infringing the intellectual property of others.In addition, many of the foregoing risks and uncertainties are, or could be, exacerbated by any worsening of the global business and economic environment, and new risks periodically emerge. A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances, and those future events or circumstances may not occur. Actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. You should not place undue reliance on the forward-looking statements, which speak only as of the date of this release. We are under no obligation to update or alter any forward-looking statements, whether as a result of new information, future events, or otherwise.
Starbucks is facing a proposed class-action lawsuit alleging the coffee giant misleadingly markets eight protein beverages as “Sugar-Free” despite the drinks containing naturally occurring sugar from milk.
The lawsuit, filed Friday in the US District Court for the Western District of Washington, alleges Starbucks’ “Sugar-Free” protein drinks contain between 13 and 21 grams of sugar per venti serving.
The plaintiffs contend the product names violate federal regulations governing “sugar-free” labeling claims.
Starbucks disputes the allegations.
“We believe these claims have no merit,” a Starbucks spokesperson said in a statement.
“Starbucks has consistently and clearly provided information about its protein beverages, sugar-free options, customization choices and nutritional content across product announcements, menus, marketing materials, Starbucks.com and the Starbucks app, and we intend to vigorously defend ourselves in this matter.”
Starbucks is facing a lawsuit alleging it misleadingly marketed protein drinks as “sugar-free” despite containing natural sugar. Studio Aurelia – stock.adobe.com At the center of the dispute is the distinction between total sugar and added sugar. The plaintiffs acknowledge that Starbucks provides nutritional information showing the beverages contain sugar, but argue that using “Sugar-Free” in the product names is misleading.
“This case is about false and misleading product names. It is not about missing nutritional information,” the complaint states.
The sugar at issue is lactose naturally present in the milk used to make the beverages, according to the lawsuit. Figures cited in the complaint from Starbucks’ nutrition information show venti versions contain between 13 and 21 grams of sugar.
A venti Sugar-Free Caramel Protein Matcha contains 21 grams of sugar, according to the complaint. ClassAction.org A venti Sugar-Free Caramel Protein Matcha contains 21 grams, while a Sugar-Free Vanilla Protein Matcha contains 20 grams, according to the complaint. The lawsuit includes screenshots of Starbucks’ ordering pages showing those sugar amounts alongside the “Sugar-Free” product names.
Starbucks has distinguished between total sugar and added sugar in descriptions of the beverages. According to the complaint, Starbucks has described the products as containing “no added sugar” while also incorporating “Sugar-Free” into their names.
The plaintiffs argue that distinction does not satisfy federal requirements for a “sugar free” claim.
The complaint cites Food and Drug Administration regulations that plaintiffs say permit a “sugar free” claim only when a food or beverage contains less than 0.5 grams of sugar per reference amount customarily consumed and per labeled serving, among other requirements.
Starbucks launched its protein drink lineup in September 2025. Brian Zak/NY Post The plaintiffs allege Starbucks’ drinks exceed that threshold because of the lactose in the milk used to make them.
The lawsuit also alleges Starbucks fails to provide a calorie disclaimer that plaintiffs contend is required under FDA regulations when a “sugar free” claim is made on a product that is not labeled low or reduced calorie. The complaint says the eight beverages contain roughly 270 to 340 calories per venti serving.
The allegations have not been adjudicated, and Starbucks denies any wrongdoing.
The lawsuit was brought by consumers Michael Walsh of California, Anne Legnini of New York and Elna Potter of Washington.
They are seeking to represent a nationwide class of customers who purchased the beverages, or alternatively separate classes of consumers in California, New York and Washington.
The eight beverages at issue are hot and iced Sugar-Free Vanilla and Caramel Protein Lattes and Protein Matchas. Starbucks launched its protein beverage lineup in September 2025 as the company sought to tap growing consumer demand for protein-enhanced drinks.
The plaintiffs are pursuing claims under consumer protection and false advertising laws in Washington, California and New York, along with claims for breach of implied warranty and unjust enrichment.
They are seeking damages and restitution as well as an order barring Starbucks from marketing beverages as “Sugar-Free” unless they meet the applicable requirements.
Starbucks (SBUX - Free Report) closed at $96.11 in the latest trading session, marking a +1.78% move from the prior day. This change outpaced the S&P 500's 0.58% gain on the day. On the other hand, the Dow registered a gain of 0.49%, and the technology-centric Nasdaq increased by 0.45%.
The coffee chain's stock has dropped by 9.61% in the past month, falling short of the Retail-Wholesale sector's loss of 4.5% and the S&P 500's gain of 0.84%.
The investment community will be closely monitoring the performance of Starbucks in its forthcoming earnings report. On that day, Starbucks is projected to report earnings of $0.72 per share, which would represent year-over-year growth of 38.46%. In the meantime, our current consensus estimate forecasts the revenue to be $9.25 billion, indicating a 3.3% decline compared to the corresponding quarter of the prior year.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $2.59 per share and revenue of $38.02 billion, indicating changes of +21.6% and +2.26%, respectively, compared to the previous year.
It is also important to note the recent changes to analyst estimates for Starbucks. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 1.09% increase. Starbucks is holding a Zacks Rank of #3 (Hold) right now.
With respect to valuation, Starbucks is currently being traded at a Forward P/E ratio of 29.96. Its industry sports an average Forward P/E of 18.82, so one might conclude that Starbucks is trading at a premium comparatively.
It is also worth noting that SBUX currently has a PEG ratio of 1.36. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. By the end of yesterday's trading, the Retail - Restaurants industry had an average PEG ratio of 1.7.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. At present, this industry carries a Zacks Industry Rank of 162, placing it within the bottom 35% of over 250 industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.
Starbucks is facing a proposed class-action lawsuit alleging the coffee giant misleadingly markets eight protein beverages as "Sugar-Free" despite the drinks containing naturally occurring sugar from milk.
The lawsuit, filed Friday in the U.S. District Court for the Western District of Washington, alleges Starbucks' "Sugar-Free" protein drinks contain between 13 and 21 grams of sugar per venti serving. The plaintiffs contend the product names violate federal regulations governing "sugar-free" labeling claims.
Starbucks disputes the allegations.
"We believe these claims have no merit," a Starbucks spokesperson said in a statement. "Starbucks has consistently and clearly provided information about its protein beverages, sugar-free options, customization choices and nutritional content across product announcements, menus, marketing materials, Starbucks.com and the Starbucks app, and we intend to vigorously defend ourselves in this matter."
CHICK-FIL-A RULES OUT AI DRIVE-THRU ORDERING AS FAST-FOOD RIVALS EMBRACE TECHNOLOGY
People pass by a Starbucks coffee shop in Manhattan, New York, on Jan. 15, 2025. (Mostafa Bassim/Anadolu via Getty Images)
At the center of the dispute is the distinction between total sugar and added sugar. The plaintiffs acknowledge that Starbucks provides nutritional information showing the beverages contain sugar, but argue that using "Sugar-Free" in the product names is misleading.
"This case is about false and misleading product names. It is not about missing nutritional information," the complaint states.
The sugar at issue is lactose naturally present in the milk used to make the beverages, according to the lawsuit. Figures cited in the complaint from Starbucks' nutrition information show venti versions contain between 13 and 21 grams of sugar.
A venti Sugar-Free Caramel Protein Matcha contains 21 grams, while a Sugar-Free Vanilla Protein Matcha contains 20 grams, according to the complaint. The lawsuit includes screenshots of Starbucks' ordering pages showing those sugar amounts alongside the "Sugar-Free" product names.
A sign embellished with the Starbucks logo hangs near the entrance to the Starbucks coffee shop in Aspen, Colorado. (Robert Alexander/Getty Images)
Starbucks has distinguished between total sugar and added sugar in descriptions of the beverages. According to the complaint, Starbucks has described the products as containing "no added sugar" while also incorporating "Sugar-Free" into their names.
The plaintiffs argue that distinction does not satisfy federal requirements for a "sugar free" claim.
The complaint cites Food and Drug Administration regulations that plaintiffs say permit a "sugar free" claim only when a food or beverage contains less than 0.5 grams of sugar per reference amount customarily consumed and per labeled serving, among other requirements. The plaintiffs allege Starbucks' drinks exceed that threshold because of the lactose in the milk used to make them.
Ticker Security Last Change Change % SBUX STARBUCKS CORP. 94.43 -0.28 -0.30% The lawsuit also alleges Starbucks fails to provide a calorie disclaimer that plaintiffs contend is required under FDA regulations when a "sugar free" claim is made on a product that is not labeled low or reduced calorie. The complaint says the eight beverages contain roughly 270 to 340 calories per venti serving.
The allegations have not been adjudicated, and Starbucks denies any wrongdoing.
The lawsuit was brought by consumers Michael Walsh of California, Anne Legnini of New York and Elna Potter of Washington. They are seeking to represent a nationwide class of customers who purchased the beverages, or alternatively separate classes of consumers in California, New York and Washington.
The eight beverages at issue are hot and iced Sugar-Free Vanilla and Caramel Protein Lattes and Protein Matchas. Starbucks launched its protein beverage lineup in September 2025 as the company sought to tap growing consumer demand for protein-enhanced drinks.
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The plaintiffs are pursuing claims under consumer protection and false advertising laws in Washington, California and New York, along with claims for breach of implied warranty and unjust enrichment. They are seeking damages and restitution as well as an order barring Starbucks from marketing beverages as "Sugar-Free" unless they meet the applicable requirements.
Starbucks is facing a consumer lawsuit over claims that the protein drinks labeled “sugar-free” on its cafe menus may actually contain more sugar than a Reese’s peanut butter cup.
The federal lawsuit filed late Friday in Seattle alleges that eight protein beverages Starbucks sells in the U.S. contain varying amounts of sugar even though the company lists them as sugarless.
On Monday, the menu on Starbucks’ U.S. website listed a 16-ounce (0.5-liter) Sugar-Free Caramel Protein Matcha with 16 grams of sugar and a 20-ounce (0.6-liter) version of the same drink with 21 grams of sugar. By comparison, one Reese’s cup has 11 grams of sugar.
Hagens Berman, a law firm that specializes in class action cases, filed the suit on behalf of three individual consumers who bought Starbucks’ sugar-free protein drinks in California, New York and Washington.
“Consumers avoid sugar for various reasons, whether that be general health, diabetes and blood glucose levels or other factors, and for many, a staunch mislabeling like this is significant,” said Steve Berman, a co-founder and managing partner of the Seattle-headquartered firm.
The plaintiffs contend that Starbucks’ naming and marketing of sugar-free products is “false, deceptive and unlawful” and that the company violated federal labeling regulations.
Seattle-based Starbucks said the sugar in its protein drinks comes from the protein-boosted milk it uses. The company said it doesn’t add sugar to the drinks and it uses sugar-free syrup for flavoring.
On Starbucks’ website Monday, the drinks were marketed as “sugar-free,” but the company also clearly stated the amount of sugar in each beverage and that they were made without added sugar.
“We believe these claims have no merit,” a Starbucks spokesperson said Monday. “Starbucks has consistently and clearly provided information about its protein beverages, sugar-free options, customization choices and nutritional content across product announcements, menus, marketing materials, Starbucks.com and the Starbucks app, and we intend to vigorously defend ourselves in this matter.”
Starbucks introduced its protein drinks in September 2025 to meet consumer demand for functional beverages and catch up to rivals like Dutch Bros, which launched protein-enhanced coffee drinks in 2024.
Dutch Bros also offers a lower-sugar version of its caramel-flavored Hopscotch Protein Latte, but it’s advertised as the Hopscotch Zero Sugar Added Protein Latte. The 16-ounce (0.5-liter) iced version has 7 grams of sugar and 11 grams of protein. By comparison, a 16-ounce (0.5-liter) iced Starbucks Sugar-Free Caramel Protein Latte has 9 grams of sugar and 29 grams of protein.
The lawsuit seeks damages on behalf of U.S. consumers who bought the drinks. It also wants the court to order Starbucks to stop using the label “sugar-free” on products that contain sugar.
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Starbucks (NASDAQ: SBUX | SBUX Price Prediction) faces a lawsuit over how it describes some of its food. According to Reuters, the suit cites a federal regulation. “Federal law prohibits Starbucks from using “sugar-free” to describe beverages containing more than…
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Starbucks (NASDAQ: SBUX | SBUX Price Prediction) faces a lawsuit over how it describes some of its food. According to Reuters, the suit cites a federal regulation. “Federal law prohibits Starbucks from using “sugar-free” to describe beverages containing more than 0.5 grams of sugar per 12-ounce serving, the complaint said.” Customers say “sugar-free” is incorrect because of lactose.
Starbucks says the claim is “without merit” and that its menu labels are correct
Aside from which side is correct, Starbucks faces more bad publicity. Add this to claims by unionized workers that Starbucks does not pay a fair wage
After some enthusiasm about its most recent earnings, the stock has sold off. It is now slightly underperforming the S&P 500 this year. Over the last five years, the stock is down 15% while the S&P 500 is up 75%. There had been hopes that a turnaround plan would lift the shares
In the June quarter, revenue was slightly below flat at $9.3 billion. EPS rose 85% to $.91. The really good news was that same-store sales were higher by 7.9% year over year
When earnings were announced, CEO Brian Niccol said, “Our Back to Starbucks plan was built on the belief that an extraordinary cup of coffee, human connection, and customer experience win the day, every day. Our third quarter results are proof they do,” he commented
Apparently, investors do not believe him.
Contact [email protected] for any questions or corrections.
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Here's the simple math first. Starbucks (SBUX -0.30%) pays an annual dividend of $2.48 per share and recently traded at around $95 per share.A $10,000 investment buys roughly 105 shares at that price, and that payout works out to about $260 a year in dividend income, paid whether the stock goes up, down, or sideways that year.
It won't replace a paycheck, but it's a useful way to picture what owning this stock actually pays an investor in cash, separate from whatever the share price does on any given day.
Image source: Getty Images.
Starbucks' turnaround is finally showing up in the numbers Starbucks spent the past two years working through what Chief Executive Officer Brian Niccol branded the "Back to Starbucks" plan, aimed at fixing slow service, inconsistent stores, and an overly complicated menu. On the plan's two-year anniversary in September, Niccol declared the momentum was finally real, and the numbers backed him up.
Global comparable sales rose 7.9%, with North American sales up 8.1%, and customer visits increased alongside that. It was Starbucks's first quarter of positive global comparable sales in seven quarters.
Management also approved the next phase of its store renovation push, part of a roughly $1 billion plan to refresh up to 9,000 cafes, with more than 1,000 stores already updated and a target of 1,500-plus by year-end, according to SIlive.com. At the same time, the company closed about 250 underperforming North American locations, roughly 1% of its footprint, that weren't meeting its bar for either customer experience or financial performance.
Fixing stores a company already has and being willing to close the ones that don't work is a slower and less flashy strategy than simply opening new locations as quickly as possible. But it's also the kind of discipline that tends to support a durable, growing dividend over the following decade rather than a one-quarter headline.
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Restructuring in China frees up cash without giving up the upside Starbucks also fundamentally changed how it operates in China this year, in a way that lowers its risk without walking away from the market's long-term size. The company sold a 60% stake in its roughly 8,000 cafes in China to Boyu Capital for $4 billion, while keeping a 40% ownership interest and continuing to collect licensing fees on use of the Starbucks brand there, according to the AP.
Instead of directly funding and operating thousands of stores in a market where local Chinese coffee chains have been aggressively undercutting it on price, Starbucks now gets paid through its retained stake and brand royalties, while a local partner handles the capital-intensive work of running the stores.
Starbucks has said it now values its China business at more than $13 billion, including the retained stake and ongoing fee stream, and the new joint venture has set a long-term goal of growing to as many as 20,000 locations, according to CNBC. That's a more capital-light way for Starbucks to keep participating in China's growth, with far less of its own cash tied up getting there, and with a partner who understands the local competitive landscape better than a U.S. head office ever could.
How does this add up to a long-term bullish case? Put the three pieces together: a turnaround that's now showing up in actual customer visits, a leaner and less capital-intensive approach to its largest international growth market, and a dividend that has grown for 15 consecutive years, historically at a pace of around 17.5% annually. According to Tikr.com, the stock is expected to continue climbing toward roughly $3.11 per share by fiscal 2030, a meaningful jump from today's $2.48.
A company that is fixing its core stores, closing the ones that don't work, de-risking its largest growth market, and still finding room to raise its dividend every year is exactly the kind of setup long-term investors should want to own through the next several years.
Hi, this is Anniek, writing to you from Singapore. Welcome to the latest edition of The China Connection — a snapshot of what I'm seeing and hearing from local businesses.
Starbucks struck one of Asia's most closely watched deals last year, selling a majority stake in its China business to a local private-equity firm. Now it is getting headaches at home over choices made by a partner that increasingly leans toward Beijing's priorities.
The big storyStarbucks Corp has taken its green apron to Xinjiang, a region where Western governments accuse Beijing of widespread human-rights abuses and where the U.S. restricts imports over forced-labor concerns.
The opening of two stores in Urumqi shows how the Chinese private-equity firm that now controls Starbucks' business in its second-largest market is willing to weather Washington's anger.
Starbucks completed the sale of a 60% controlling stake in its China operations to Boyu Capital in April. The venture aims to grow from roughly 8,000 stores to as many as 20,000, and Xinjiang appears to be a bold, if controversial, first stop.
The U.S. House Select Committee on China called the decision "shocking and morally bankrupt" for "a company that prides itself on social responsibility" and demanded the stores close. Its chairman, Rep. John Moolenaar (R-Mich.), was blunt in that statement headlined "Starbucks Serves Up Venti-Sized Genocide."
China's Foreign Ministry rejected the criticism, calling U.S. claims of genocide "a blatant lie" and saying Xinjiang has emerged as a region of "social stability, economic prosperity, ethnic unity and religious harmony." Beijing has long defended its security crackdown as necessary to counter terrorism and religious extremism, and denies allegations of "crimes against humanity" and ongoing repression.
Boyu — run by people who know China's politics well — wouldn't have missed the risk, said Ivy Yang, founder of Wavelet Strategy. "Boyu understands the sensitivity of Xinjiang as well as anyone," she said. In her view, the decision shows the firm weighed Washington's reaction and concluded that the domestic commercial opportunity mattered more.
The Hong Kong-based private-equity firm, co-founded by Alvin Jiang, a grandson of the late President Jiang Zemin, has long been seen as having close ties to China's political elite.
Starbucks has been losing ground on price and speed to local rivals, Yang said, and a new owner who's under pressure to deliver growth is likely to go where the stores aren't yet.
Molly Liu, chief executive of Starbucks China, in a recent statement, pledged to keep investing in the region.
Business vs geopoliticsSome, however, believe Starbucks' store openings cannot be read as a purely commercial decision.
"Chinese authorities have a strong interest in attracting prominent global brands to Xinjiang to demonstrate the region's stability," said Dan Wang, China director at Eurasia Group.
Beijing has spent years courting investment in Xinjiang. Supporting the region economically became a state goal after the controversy over Xinjiang cotton, said Yaling Jiang, founder of consumer consulting firm ApertureChina, and state television and social-media content have since turned it into a consumer aspiration.
But Xinjiang remains among China's poorer regions. Its full-year rural per capita disposable income only just topped 20,000 yuan ($2,983) for the first time last year, compared with 24,456 yuan for rural residents nationwide. The non-metropolitan median household income in the U.S. was $60,459 in 2023.
More than a dozen American brands have already ventured into Xinjiang, including Pizza Hut, KFC, McDonald's, Tesla and Burger King. But few have drawn comparable criticism from U.S. lawmakers.
And that expansion has gathered pace since 2023, according to GeoHey Brand Insights, a geospatial-data research firm, despite the landmark Uyghur Forced Labor Prevention Act signed into law in December 2021.
"Worsening geopolitics is inevitable, and must be priced into any exit negotiation," said Meng Shen, director of Chanson & Co., a Beijing-based boutique investment bank, of multinationals' interest in joint ventures with Chinese partners.
With U.S.-China ties steadying this year, Starbucks' Xinjiang stores are now a test of the climate for American business in China, Wang said — if Starbucks ultimately halts the project under U.S. pressure, it would send a negative signal to American businesses in China that commercial commitments can be overridden by political pressure from Washington.
That could make U.S. brands even more wary of Chinese partners and future deals harder to negotiate, she said.
Need to know'Unwelcome and unsafe': Why Japanese companies are retreating from China at a historic rate
Japanese companies are leaving China in record numbers, as a slowing Chinese economy and a diplomatic freeze force businesses to reassess their presence in the world's second-largest economy.
China wants in on U.S. AI data center boom. Here's why
Chinese manufacturers are eyeing the U.S. data center buildout as an opportunity, even as the two countries compete for AI dominance. "We can see very big potential in the U.S. market," said S.K. Lee, a global vice president at Singapore-registered Brightray, an AI infrastructure company. "The China market is equally important, but we can see that there's a stronger demand in the U.S."
Big Pharma's China deal spree grows with latest tie-up worth up to $7.8 billion
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Coming upOct 1-7: China's National Day holiday
Oct 7: China's foreign-exchange reserves for September
Oct 8-9: Second round of the EU-China trade and investment consultations in Beijing
Oct 9: China's September new yuan loans and total social financing data
SEATTLE--(BUSINESS WIRE)---- $SBUX #classaction--Starbucks is facing a lawsuit alleging it misleads consumers naming drinks “Sugar-Free,” containing “substantial" sugar, according to Hagens Berman.
Looking for a stock that has been consistently beating earnings estimates and might be well positioned to keep the streak alive in its next quarterly report? Starbucks (SBUX - Free Report) , which belongs to the Zacks Retail - Restaurants industry, could be a great candidate to consider.
This coffee chain has an established record of topping earnings estimates, especially when looking at the previous two reports. The company boasts an average surprise for the past two quarters of 21.21%.
For the last reported quarter, Starbucks came out with earnings of $0.85 per share versus the Zacks Consensus Estimate of $0.66 per share, representing a surprise of 28.79%. For the previous quarter, the company was expected to post earnings of $0.44 per share and it actually produced earnings of $0.5 per share, delivering a surprise of 13.64%.
Price and EPS Surprise
Thanks in part to this history, there has been a favorable change in earnings estimates for Starbucks lately. In fact, the Zacks Earnings ESP (Expected Surprise Prediction) for the stock is positive, which is a great indicator of an earnings beat, particularly when combined with its solid Zacks Rank.
Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven.
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Starbucks has an Earnings ESP of +2.43% at the moment, suggesting that analysts have grown bullish on its near-term earnings potential. When you combine this positive Earnings ESP with the stock's Zacks Rank #3 (Hold), it shows that another beat is possibly around the corner.
When the Earnings ESP comes up negative, investors should note that this will reduce the predictive power of the metric. But, a negative value is not indicative of a stock's earnings miss.
Many companies end up beating the consensus EPS estimate, but that may not be the sole basis for their stocks moving higher. On the other hand, some stocks may hold their ground even if they end up missing the consensus estimate.
Because of this, it's really important to check a company's Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
The class action case filed by three consumers on behalf of a proposed class of Starbucks customers alleges that eight beverages whose names began with the words “sugar-free” in fact contained lactose, a naturally occurring sugar in milk.
Starbucks (SBUX.O) has been sued by consumers who said the coffee chain falsely advertised eight protein beverages as "sugar-free" because they contain lactose, a naturally occurring sugar in milk.
According to a proposed class action filed on Friday, reasonable consumers would not expect the beverages to contain 13 to 21 grams of sugar per 20- or 24-ounce "venti" serving.
Federal law prohibits Starbucks from using "sugar-free" to describe beverages containing more than 0.5 grams of sugar per 12-ounce serving, the complaint said.
Consumers accused Starbucks of trying to capitalize on the desire of 75% of Americans to reduce or eliminate sugar consumption. They also said Starbucks failed to provide federally required disclaimers that the protein beverages are not low-calorie food or meant for weight control.
Starbucks, based in Seattle, had no immediate comment on Monday. A lawyer for the consumers did not immediately respond to requests for comment. The complaint in Seattle federal court seeks unspecified damages for false advertising and violations of various state consumer protection laws.
Food producers are regularly sued for alleged false advertising, including in dozens of recent cases challenging "sugar-free" or "zero sugar" claims for products containing a sugar substitute known as allulose.
The eight Starbucks beverages are Sugar-Free Vanilla Protein Latte, Sugar-Free Caramel Protein Latte, Sugar-Free Vanilla Protein Matcha, Sugar-Free Caramel Protein Matcha, and equivalent versions containing ice.
The Starbucks website says the beverages are "protein-packed" with "no added sugar," and venti servings contain between 270 and 340 calories. The company launched the beverages in September 2025 as part of its "Back to Starbucks" updated menu.
Earnings are arguably the most important single number on a company's quarterly financial report. Wall Street clearly dives into all of the other metrics and management's input, but the EPS figure helps cut through all the noise.
Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive earnings surprises.
Now that we know how important earnings and earnings surprises are, it's time to show investors how to take advantage of these events to boost their returns by utilizing the Zacks Earnings ESP filter.
The Zacks Earnings ESP, ExplainedThe Zacks Expected Surprise Prediction, or ESP, works by locking in on the most up-to-date analyst earnings revisions because they can be more accurate than estimates from weeks or even months before the actual release date. The thinking is pretty straightforward: analysts who provide earnings estimates closer to the report are likely to have more information.
With this in mind, the Expected Surprise Prediction compares the Most Accurate Estimate (being the most recent) against the overall Zacks Consensus Estimate. The percentage difference provides the ESP figure. The system also utilizes our core Zacks Rank to provide a stronger system for identifying stocks that might beat their next quarterly earnings estimate and possibly see the stock price climb.
In fact, when we combined a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time. Perhaps most importantly, using these parameters has helped produce 28.3% annual returns on average, according to our 10 year backtest.
Stocks with a ranking of #3 (Hold), or 60% of all stocks covered by the Zacks Rank, are expected to perform in-line with the broader market. Stocks with rankings of #2 (Buy) and #1 (Strong Buy), or the top 15% and top 5% of stocks, respectively, should outperform the market; Strong Buy stocks should outperform more than any other rank.
Should You Consider Starbucks?The last thing we will do today, now that we have a grasp on the ESP and how powerful of a tool it can be, is to quickly look at a qualifying stock. Starbucks (SBUX - Free Report) holds a #3 (Hold) at the moment and its Most Accurate Estimate comes in at $0.74 a share 30 days away from its upcoming earnings release on November 4, 2026.
Starbucks' Earnings ESP sits at +2.43%, which, as explained above, is calculated by taking the percentage difference between the $0.74 Most Accurate Estimate and the Zacks Consensus Estimate of $0.72. SBUX is also part of a large group of stocks that boast a positive ESP. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
SBUX is just one of a large group of Retail and Wholesale stocks with a positive ESP figure. Ulta Beauty (ULTA - Free Report) is another qualifying stock you may want to consider.
Ulta Beauty, which is readying to report earnings on December 3, 2026, sits at a Zacks Rank #3 (Hold) right now. Its Most Accurate Estimate is currently $5.73 a share, and ULTA is 59 days out from its next earnings report.
For Ulta Beauty, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $5.60 is +2.37%.
SBUX and ULTA's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.
Find Stocks to Buy or Sell Before They're ReportedUse the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >>
Nike's stock has collapsed, its China business is crumbling, and local rivals are tightening their grip on the world's biggest market. The real question is whether any turnaround plan can save a brand that may have already lost the battle…
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Starbucks (NASDAQ: SBUX | SBUX Price Prediction) dumped its China operations in a deal it announced in April. It sold a majority interest to Boyu Capital, a local private equity firm. It got $4 billion, which is not much given the size of the opportunity. Starbucks used to talk a lot about its prospects in China. Walmart (NYSE: WMT) and McDonald’s (NYSE: MCD) rarely call out their China numbers. US car companies have been battered by local auto manufacturers in China. What was once their most promising market isn’t anymore. Nike recently released its quarterly earnings. They were poor, and the news drove the stock down. Nike management said it would “downsize.” China was given as the reason. Nike (NYSE: NKE) said it will solve the problem. Local athletic wear companies are entrenched, and there are several of them.
Chief Executive Elliott Hill wrote to workers, “We’re taking deliberate actions to strengthen those businesses the right way for the long-term.” He did not mention that his two global rivals, Adidas and Puma, are also trying to improve their fortunes in China. So are other smaller rivals led by On and Hoka.
The real hurdles in China are large local companies: Anta Sports, Li-Ning, and Xtep. A tier below them also competes.
In the most recent quarter, revenue fell 4% to $11.2 billion. Net income dropped 2% to $712 million. “Greater China” revenue dropped 26% to $1.18 billion.
Nike said it would have a “restructuring” program that would save $2.5 billion through fiscal 2031. That means people will be fired.
Most companies don’t say when they have been defeated in a line of business or a region of the world. They always have a plan for a comeback. That is what gives investors hope that the stock in troubled public companies will rise again. This year, Nike’s stock is down 22% while the S&P 500 is 12% higher. Over the last five years, it is down 76%. The S&P is 75% higher.
The house that Michael Jordan built with Air Jordan shoes, which first went on sale in 1984, is disintegrating. Without China, this cannot be fixed. And China is not coming back.
Contact [email protected] for any questions or corrections.
A US lawmaker has called on Starbucks (SBUX.O) to close its first stores in China's Xinjiang, calling it a "morally bankrupt decision" to do business in a region where Uyghurs face repression.
China denies widespread accusations of abuses of the Uyghurs, a mainly Muslim ethnic minority, saying its policies in the far-western region were aimed at combating terrorism, separatism and religious extremism.
Starbucks opened its first two stores this week in Xinjiang's capital, Urumqi, including one at the city centre's Grand Bazaar and a second at its international airport.
John Moolenaar, chairman of the Select Committee on China of the House of Representatives, called on Starbucks to "immediately reverse course and close its stores".
"This is a shocking and morally bankrupt decision by a company that prides itself on social responsibility," he said in a statement published on Thursday.
"There is no justifiable reason for an American company to do business in a region where the CCP (Chinese Communist Party) has detained more than a million Uyghurs and is stripping them of their faith, language, and culture."
Responding to a request for comment, China's Foreign Ministry said the US allegations of repression in the region were "naked lies" and that Xinjiang enjoyed "stable society, economic growth, racial unity and religious harmony".
China would offer more investment opportunities for foreign enterprises, the ministry added.
Starbucks did not respond to requests for comment. China is in the middle of its week-long national day holiday.
On the company's official WeChat platform this week, China Chief Executive Officer Liu Wenjuan said it would continue to invest in Xinjiang.
Pictures of the stores posted on the platform showed Starbucks' logo in English and Chinese. There were no obvious images of any Uyghur-language signs. Uyghur is written in an Arabic-based script and is meant to enjoy official parity in Xinjiang.
In April 2026, Starbucks finalised its China joint venture by bringing in a strategic investor, Boyu Capital, as its 60% stakeholder. The joint venture operates about 8,000 outlets in China.
Starbucks' strained relationship with its US union is facing fresh scrutiny from a shareholder proposal filed Friday by New York City's comptroller that has not previously been disclosed.
The proposal, which follows identical filings by the New York state comptroller and Trillium Asset Management, asks the coffee chain's board to reinstate a dissolved committee that oversaw labor relations. The investors argue the company has neglected the issue under CEO and company chair Brian Niccol.
A copy of the proposal reviewed by Reuters describes labor relations as one of Starbucks' "most significant and persistent risk areas." It highlights the absence of a labor agreement with the union representing US baristas nearly five years after workers at the first store organized in Buffalo, New York. Based on recent estimates, the union represents about 5% of US stores.
"We're well into Brian Niccol's tenure at Starbucks and this issue has not gone away," Jonas Kron, chief advocacy officer at shareholder Trillium Asset Management, said in a phone interview. "The board will function best when particularized risks like this get the attention of a committee," he said.
The filers collectively hold nearly $270 million of Starbucks shares, according to recent ownership figures provided by a spokesperson for the New York City comptroller's office.
RISK TO TURNAROUND EFFORTS?
Starbucks said in a statement it was confident the board "has the necessary skills and experience to effectively oversee our strategy." The company's shares are up 13% this year, and Starbucks often says it offers the "best job in retail".
Starbucks created the Environmental, Partner and Community Impact Committee in 2023 to oversee labor relations and other social issues after pressure from some of the same shareholder groups behind the latest proposal.
Niccol became CEO and board chair in September 2024, and the committee was dissolved in November 2025. Starbucks said in an investor presentation in March that the committee's responsibilities were redistributed because the board determined oversight would be "stronger and more integrated" that way.
Several of the current filers previously cited the committee's dissolution in a failed effort to unseat two directors at Starbucks' shareholder meeting in March.
The campaign nevertheless attracted support from shareholder proxy advisers, which warned investors that Starbucks could be overlooking risks linked to labor relations, including strikes and a $38.9 million settlement paid to New York City over alleged staff-scheduling violations. Last month, the union urged consumers to boycott the chain until a contract is reached.
Starbucks has also faced pressure beyond Wall Street. In May, UN human-rights experts urged Starbucks and the US government to respond to allegations that the company had conducted a years-long campaign against workers seeking to unionize. US lawmakers also pressed Starbucks late last year to reach a labor agreement with the union.
Elsewhere in the industry, Blue Bottle Coffee and a union representing baristas at nine stores in Massachusetts and California ratified a first contract earlier in September, according to the union. Blue Bottle was sold by Nestle (NESN.S) earlier this year to China-based Centurium Capital, which also owns Luckin Coffee.
Starbucks Workers United backed the shareholder proposal, saying in a statement that "investors should take a hard look at how the company's long list of unsettled labor issues" may be negatively affecting Niccol's turnaround plan.
Starbucks typically holds its annual shareholder meeting in March.
By and Pete Syme You're currently following this author! Click to unsubscribe from email alerts.
Business Insider mapped 239 Starbucks locations listed as closed after the company announced approximately 250 closures across North America. Nicolas Economou/NurPhoto via Getty Images Starbucks announced last week that it would close approximately 250 coffeehouses across North America, representing just under 1% of its more than 18,000 locations in the region.
In a memo to employees, chief operating officer Mike Grams said Starbucks had identified stores where it could not consistently provide its desired customer and employee experience or see a path to acceptable financial performance.
The company said affected employees would be offered transfers where possible, while those it could not place elsewhere would receive severance.
The closures are part of Starbucks' "Back to Starbucks" turnaround strategy, which seeks to improve service and restore stores as welcoming places for customers to spend time.
They follow a 2025 restructuring that resulted in the net closure of 107 North American locations.
The company has not released a complete list of the affected stores, and did not comment when asked to confirm which stores have closed by Business Insider. All locations that have closed have signage up to notify customers, Starbucks said.
To create the map below, Business Insider started with a list compiled by an independent Starbucks location tracker who goes by "Winter," and published on Starbucks Everywhere, Winter's website that tracks Starbucks locations.
Winter said he compiled the list using store schedules on Starbucks’ website and calls to affected stores.
Business Insider then verified each location using Starbucks’ online store locator and Google Maps. We classified a store as closed only if it no longer appeared in Starbucks’ locator and Google Maps marked it as permanently closed.
Using this method, we mapped 239 store closures. Business Insider was unable to independently verify the other 11 closures included on Winter's list.
You can search by city, state/province, and address using this table.
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Georgia Hennessy You're currently following this author! Click to unsubscribe from email alerts.
Georgia is a Business News Fellow at Business Insider's London office.Before joining Business Insider, she worked at Japan's largest newspaper, The Yomiuri Shimbun, and interned at the Financial Times. She is an NCTJ-qualified journalist with a degree in Philosophy from the University of Birmingham.
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Pete Syme is an aviation reporter for Business Insider, based in London.He writes about all things related to the industry, from aviation safety and CEO interviews to route reveals and airplane tours. Pete also uses data for industry analyses and to visualize breaking news events.Before joining Business Insider in 2022, he graduated with an MA in Newspaper Journalism from City, University of London, and a BA in English from the University of Exeter.
Singapore-listed DFI Retail Group (DFIR.SI) said on Wednesday its unit will assume Maxim's Caterers' existing interests in Starbucks (SBUX.O) businesses across seven Asian markets for a cash consideration of $340 million.
Maxim's Caterers, a Hong Kong-based food and beverage conglomerate, currently operates a network of over 1,100 Starbucks coffeehouses in Thailand, Hong Kong, Singapore, Vietnam, Cambodia, Macau and Laos.
"Post-completion, the Starbucks licensed business will be immediately revenue and operating margin accretive to the Group's core retail business, with further upside from operating synergies," DFI said in its statement.
Separately, the Singapore-listed firm raised its 2027 dividend payout ratio to 80% and maintained its 2028 underlying profit outlook between $310 million and $350 million.
Starbucks (SBUX +0.17%) is closing 250 stores, which has significant implications for investors.
*Stock prices used were the afternoon prices of Sept. 25, 2026. The video was published on Sept. 27, 2026.
Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Starbucks. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
