Starbucks Sees Promising Signs of Turnaround in Latest Results

The coffee giant's Q1 2026 earnings show sales growth and international expansion, signaling a potential recovery after two years of struggles.

Published on Feb. 15, 2026

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Starbucks, the iconic coffee chain, has reported its first sales growth in eight quarters, with a 3% increase in comparable transactions per store and 4% global sales growth in Q1 of fiscal 2026. The company also opened 128 new stores, bringing its total to 41,118 worldwide. While its operating margin fell and earnings per share declined, the results were a mixed bag with more positive signs than negative, suggesting Starbucks may be on the path to recovery after a challenging two-year period.

Why it matters

Starbucks, a once-ubiquitous presence in many communities, has faced stagnant and declining sales over the past two years, underperforming the broader market. The company's latest results indicate a potential turnaround, which could be seen as a bellwether for the broader consumer discretionary sector and provide an alternative investment opportunity for those concerned about the high valuations of AI-focused stocks.

The details

Under the leadership of new CEO Brian Niccol, Starbucks has reoriented itself back to being a "third place" between work and home, with plans to renovate 10% of its U.S. stores to have more comfortable seating and amenities to encourage extended stays. This strategy appears to be paying off, as the company saw a 3% increase in comparable transactions per store and 4% global sales growth in Q1. While its operating margin fell and earnings per share declined, the company's international operations saw a 10.3% surge in total net revenue and a 19.2% increase in operating income.

  • Starbucks reported its Q1 fiscal 2026 results on January 28, 2026.
  • The company replaced former CEO Laxman Narasimhan with Brian Niccol in late 2024.

The players

Starbucks

A global coffee company and coffeehouse chain that operates in over 80 countries, known for its iconic brand and ubiquitous presence in many communities.

Brian Niccol

The current CEO of Starbucks, who took over the role in late 2024 after the company faced stagnant and declining sales in the previous two years.

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What they’re saying

“Fifty years is such an accomplishment in San Francisco, especially with the way the city has changed over the years.”

— Gordon Edgar, grocery employee (Instagram)

What’s next

The company plans to renovate 10% of its U.S. stores to have more comfortable seating and amenities to encourage extended stays, a strategy that appears to be paying off with the latest sales growth.

The takeaway

Starbucks' latest results suggest the company may be on the path to recovery after a challenging two-year period, providing an alternative investment opportunity for those concerned about the high valuations of AI-focused stocks. The company's reorientation towards being a "third place" between work and home, along with its international expansion, could signal a return to form for the iconic coffee chain.