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Starbucks (SBUX) is launching higher in the wake of its 1Q26 results, despite falling short of Q1 earnings expectations, as investors focus on the company's encouraging efforts to reignite growth. After several years of sluggish performance, the results provide a strong validation of the "Back to Starbucks" plan, with global comparable store sales accelerating to 4% growth, building upon the 1% momentum seen last quarter. While the company's adjusted EPS of $0.56 missed estimates, the 5.5% yr/yr revenue increase to $9.9 bln signals that the strategic shift toward transaction-led growth is gaining traction heading into the remainder of FY26.

• Global comp sales hit 4% as U.S. transaction growth (+3%) turned positive for the first time in eight quarters.
• U.S. comps rose 4%, driven by "Green Apron" service improvements that lowered wait times and a record 35.5 mln Rewards members.
• International comps grew 5%, led by a 7% surge in China fueled by product innovation and a new strategic partnership with Boyu Capital.
• SBUX plans to open 600–650 net new stores in FY26, utilizing high-efficiency "Ristretto" and "Pico" formats to capture underserved markets.
• Operating margins fell 180 bps to 10.1% as the company prioritized traffic growth and turnaround investments over immediate profitability.
• SBUX issued formal FY26 guidance (3%+ comps), though the $2.15-$2.40 EPS range midpoint sits below consensus.
• A $2 bln cost-savings plan is underway, leveraging supply chain optimization and AI tools like "Green Dot Assist" to bolster future margins.

Briefing.com Analyst Insight:

SBUXs' Q1 results represent a critical "proof of concept" for the turnaround strategy. By successfully driving transaction growth for the first time in years, particularly among non-Rewards members, the company is proving it can broaden its appeal. While margin compression and conservative EPS guidance suggest an investment-heavy transition phase, the 7% comp growth in China and the $2 bln cost-savings roadmap provide a credible path to sustainable growth. If SBUX can maintain its 4% transaction momentum while lapping initial investments, it is well-positioned for a lasting recovery.