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Starbucks Says Its Turnaround Is Done—The Numbers Make a Strong Case (With 1 Catch)
By Ryan Hasson. Originally Published: 10/31/2026.
Key Points
- Starbucks topped fiscal fourth-quarter earnings and U.S. comparable sales expectations, but shares fell about 2% after revenue missed estimates.
- Revenue declined mainly because Starbucks converted nearly 8,000 Chinese stores into a licensed joint venture, while North America revenue actually grew 6%.
- For fiscal 2027, Starbucks guided to about 4% North America comparable sales growth and $3.15 to $3.25 in non-GAAP earnings per share.
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Starbucks (NASDAQ: SBUX) reported fiscal fourth-quarter 2026 results after the market close on Thursday, Oct. 29. The report was its first since CEO Brian Niccol declared the core turnaround complete. Niccol summed it up in the release: “Back to Starbucks started as our turnaround plan. Now, it’s our growth plan.”
Overall, the quarter supported that confidence. U.S. comparable sales climbed 7.7%, well ahead of management’s guidance of 6.5% or better.
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Claim today's free stock pick before December 8thNon-GAAP earnings rose 54% to 80 cents per share, topping the 72-cent consensus, while non-GAAP operating margin widened by roughly 450 basis points to 14%.
Even so, shares slipped about 2% in after-hours trading, as revenue came in below expectations. This isn’t the first time a beat failed to stick. After its fiscal second-quarter report, the stock rallied about 8% that day, then gave back those gains over the next month.
Why Revenue Looks Weaker Than the Business
On the surface, revenue fell about 4.5% to $9.1 billion, short of the roughly $9.2 billion analysts expected. That decline, however, mostly reflects a change in how the business is structured rather than softer demand. During the third quarter of fiscal 2026, Starbucks shifted its China retail operations into a licensed joint venture, converting nearly 8,000 company-operated coffeehouses into licensed stores. Instead of booking the full sales from those locations, Starbucks now earns royalties and product sales. North America revenue, meanwhile, grew 6% to $7.3 billion.
More Visits or Higher Prices?
Now, the source of that comparable sales growth deserves a closer look. Through much of fiscal 2026, more frequent customer visits drove the recovery. U.S. transactions rose 4.3% in fiscal Q2 and 4.2% in fiscal Q3, outpacing ticket growth in both quarters.
That balance shifted in fiscal Q4. The U.S. average ticket rose 5.2%, while transactions grew a more modest 2.4%. In North America, the company attributed the higher ticket to a stronger product mix, more customers adding food to their orders, pricing, and increased delivery sales. So the gain didn’t come simply from raising prices; the quarter clearly leaned more on how much each customer spent than on how many customers walked in.
Margins Held Without the Tariff Boost
Margins were also worth watching. Starbucks recorded tariff refunds in fiscal Q3 that largely offset the tariffs it paid earlier in the year, so the fourth quarter didn’t benefit from that tailwind. Margins expanded anyway. CFO Cathy Smith pointed to sales leverage, cost savings, and the comparison with last year’s labor investments in the company’s Green Apron service model. These factors were partly offset by higher product costs tied to mix. Coffee prices had a roughly neutral effect in the quarter, and management indicated coffee should become more of a tailwind in fiscal 2027.
A First Look at Fiscal 2027
Arguably, the outlook carried more weight than the quarter itself. Fiscal 2027 will be a 53-week year, and Starbucks expects North America comparable sales growth of about 4%, with a non-GAAP operating margin of 13.5% to 14%. It guided to non-GAAP earnings per share (EPS) of $3.15 to $3.25, a range that includes slightly more than 10 cents from the extra week.
Revenue is expected to decline about 1%, mainly because of the China transition, while the company plans to add roughly 1,200 net new coffeehouses globally, led by International. Starbucks also plans to upgrade more than 2,000 North American coffeehouses and resume share repurchases. In September, it closed about 250 underperforming North American locations.
Turnaround Complete?
Niccol has a solid case. Starbucks has now posted five straight quarters of positive comparable sales, more than 80% of its North American company-operated stores delivered positive comps in the quarter, and margins expanded without any help from tariff refunds. Management also said fiscal 2027 is tracking roughly a year ahead of the framework it had laid out for fiscal 2028.
Still, there are reasons to be cautious. Transaction growth cooled noticeably as ticket did more of the lifting, and the roughly 4% North America comp guide for fiscal 2027 is a clear step down from fiscal 2026’s 6.6%. International remains soft, with comparable transactions down 2.8%. Now that the turnaround has been declared complete, the yardstick shifts from recovery to sustained growth, which may prove the tougher test.
Apple's Earnings Beat Comes With a Catch for Investors Heading Into the Holidays
By Sam Quirke. Originally Published: 11/3/2026.
Key Points
- Apple reported record fiscal fourth-quarter revenue, with strong iPhone and Mac sales and continued Services growth.
- Apple's holiday-quarter gross margin forecast disappointed investors as rising memory costs and Siri AI expenses added pressure.
- The iPhone 18 Pro lineup and foldable iPhone Duo offer potential holiday sales growth, but Apple's valuation leaves less room for disappointment.
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Apple Inc. (NASDAQ: AAPL) just beat Wall Street on almost every metric that mattered, and the stock fell anyway. The company reported a record September quarter after the close on Nov. 2, with revenue up nearly 12% and iPhone sales growing at a healthy clip. Yet at the Nov. 3 open, shares had fallen about 3.8%, though they later recovered some of those initial losses.
As has been a recurring theme for Big Tech this earnings season, the culprit wasn’t so much the quarter just ended as the one ahead. Apple may have guided for its highest-revenue holiday season ever, but it also warned of thinner margins, and that was enough to sour a market already paying a rich price for the stock.
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Watch Chaikin's free presentation and see the ticker nowThat leaves a big question hanging over the stock as the holiday quarter gets underway: Can Apple’s rally, intact since April, continue, or are there too many holes in the bull case for now?
Apple's Record Quarter Driven by Strong iPhone and Mac Sales
Start with what went right, because most of it did. Apple posted a record fourth quarter for fiscal 2026, with iPhone revenue jumping nearly 18% and Mac revenue rising nearly 24%. Revenue in China grew 21%, setting a September-quarter record.
Services hit a fresh high, too, and the company generated cash as it always does, returning roughly $28 billion to shareholders in the quarter alone. To be sure, not everything shone: revenue from the iPad and wearables units both slipped. But those businesses are small change compared with their iPhone and Services siblings, which have always carried the story.
That last point matters more than usual right now. While many AI hyperscalers pour cash into data centers, Apple is somewhat of an anomaly, still returning so much money to investors rather than spending it. With the market increasingly willing to punish heavy spenders, that’s not a bad reputation to have.
Apple's Holiday Margin Outlook Raises Concerns
So why the cold shoulder? The problem lies in the guidance. Apple now expects holiday gross margin of 45% to 46%, down from nearly 48% last quarter, which also benefited from tariff refunds. Rising memory prices and the cost of ramping up its new Siri AI are also putting pressure on profitability.
A revenue beat in the quarter just ended is one thing; a softer margin outlook can draw even more attention. There was a subtler concern, too: Services revenue grew about 10% in the September quarter, but Apple expects growth of 8% to 9% in the holiday quarter, partly due to currency and licensing headwinds. That’s another concern for investors, even as hardware sales surge.
The stock’s already elevated valuation only sharpened the reaction. Apple was trading around 38 times earnings heading into the report, well above its valuation in several recent years. In that context, there’s less room for disappointment when the margin outlook softens.
iPhone 18 and Duo Sales Face a Holiday Season Test
The real swing factor is the new lineup. The iPhone 18 Pro and Pro Max went on sale only days before the September quarter ended, while the foldable iPhone Duo didn't launch until Oct. 23. That means most of their sales impact will come in the holiday quarter. Holiday guidance, which topped Street expectations, is therefore as much a demand signal as the results themselves.
Early signs look encouraging, with reports of extended delivery times for the Duo, which CEO John Ternus called “the most transformational iPhone since the original.” The caveat is that long waits can signal constrained supply as easily as runaway demand, so the exact size of the Duo’s contribution is still guesswork.
Still, bulls have reason to feel positive that this quarter could prove demand is real. It will be the first to capture a full quarter of iPhone 18 Pro sales and a contribution from the Duo, following a September quarter that already beat expectations.
Can Apple's Stock Rally Hold Up Against Rising Costs?
Which brings us back to the chart. Apple’s broader uptrend has held in recent weeks, despite hyperscaler peers like Alphabet Inc. (NASDAQ: GOOGL) and Amazon.com Inc. (NASDAQ: AMZN) selling off amid fears that their AI spending won’t pay off soon enough.
Apple’s problem is the opposite kind: It’s not spending too much, but soaring component costs and limited supply could squeeze its margins. In a market that’s grown increasingly wary of cash-hungry AI bets, a company that still mints profits and returns them may be exactly where nervous money hides.
The next test is whether Apple’s shares can maintain their broader uptrend as investors weigh holiday-quarter demand against pressure on profit margins.
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