Summary
Goldman Sachs has maintained a Neutral rating and a $100.00 price target on Starbucks (NASDAQ:SBUX) following the coffee chain's fiscal first-quarter 2026 report. The stock was trading at $95.12, slightly under Goldman Sachs' target, and InvestingPro data indicated the shares are near their Fair Value. The quarter combined stronger-than-expected revenue performance with an adjusted earnings per share that fell short of both Goldman Sachs' and consensus forecasts.
Quarterly results and top-line dynamics
Starbucks reported adjusted EPS of $0.56 for the quarter, below the $0.59 forecast used by Goldman Sachs and the consensus. Total revenue was $9.9 billion, outperforming the consensus figure cited in one part of the report as $9.7 billion and noted elsewhere as $9.62 billion. Company-operated stores drove the upside, sustaining the company’s incremental revenue growth trend. Over the last twelve months, Starbucks' annual revenue reached $37.18 billion, a 2.79% year-over-year increase.
The firm posted global same-store sales growth of 4%, while transactions in North America rose 3%. Management highlighted stronger engagement from both Starbucks Rewards members and non-Rewards customers, and pilot locations testing the Green Apron Service model outperformed other stores. That same-store momentum has coincided with a 13% year-to-date share-price return, despite a modest -2.71% return over the trailing 12 months.
Profitability and cost pressures
Operating margin for the quarter came in at 10.1%, slightly under the consensus expectation of 10.3%. Cost of goods sold was reported at 33.0% of sales, above the 31.7% estimate, a variance the company attributes to tariffs and elevated coffee pricing. Management expects these cost headwinds to begin easing in the second half of fiscal 2026. Goldman Sachs, however, cautioned that improvements may take time to fully materialize and is awaiting additional detail at the company’s investor day scheduled for January 29.
Analyst reactions and divergent views
Following the earnings release, Evercore ISI reiterated an Outperform rating and kept a $105 price target. Evercore noted that Starbucks’ reported EPS represented an 18% year-over-year decline but still exceeded Evercore’s internal estimate of $0.51. Jefferies, meanwhile, raised its price target to $86 from $76 but maintained an Underperform rating, highlighting what it described as "solid improvement" in same-store sales driven by factors such as expanded hours and stepped-up marketing.
Context and implications
The quarter presented a mixed picture: operational traction in sales and customer engagement alongside margin compression from commodity and tariff-related cost increases. Investors and analysts are parsing those dynamics as Starbucks works through a multi-faceted turnaround effort, balancing top-line growth initiatives with pressure on near-term profitability metrics. Goldman Sachs' Neutral rating reflects this calibrated view, keeping the firm on the sidelines until more clarity emerges at the investor day and beyond.
Key metrics cited
- Adjusted EPS: $0.56 (vs. $0.59 consensus)
- Revenue: $9.9 billion (consensus cited as $9.7 billion and $9.62 billion in different references)
- Annual revenue (LTM): $37.18 billion, up 2.79% year-over-year
- Global same-store sales growth: 4%; North American transactions: +3%
- Operating margin: 10.1% (consensus 10.3%)
- Cost of goods sold: 33.0% of sales (estimate 31.7%)