TLDR
- Starbucks reports Q3 earnings Wednesday after market close
- Wall Street expects EPS of $0.65 on revenue of $9.12B, a 3.6% decline year-on-year
- SBUX stock is up 23% year-to-date, trading around $104 with an analyst price target of $106.45
- The company posted its third straight quarter of positive comparable sales in April
- Coffee prices, tariffs, and delivery costs remain key risks to margins
Starbucks (SBUX) reports Q3 fiscal 2026 earnings on Wednesday after market close. The stock is trading around $104, up 23% year-to-date, well ahead of the S&P 500’s 8% gain.
Wall Street is expecting EPS of $0.65 on revenue of $9.12B. That would represent a revenue decline of roughly 3.6% compared to the same quarter last year.
Last quarter, Starbucks beat on both revenue and EPS. Revenue came in at $9.53B, up 8.8% year-on-year. Same-store sales also topped estimates.
But expectations have come down since then. This quarter, analysts are bracing for a 3% year-on-year revenue decline — a reversal from the 3.8% growth posted in Q2 last year.
Over the past two years, Starbucks has beaten EPS estimates just 13% of the time and revenue estimates 50% of the time. That track record keeps expectations measured.
Turnaround on Track?
In April, Starbucks posted its third straight quarter of positive comparable sales after seven consecutive quarters in negative territory. CEO Brian Niccol called it “a milestone for the business.”
RBC analyst Logan Reich said the business has momentum, with comps benefiting from incremental labor investments, store closures, sales transfers, and extended operating hours. RBC models Q3 largely in line with consensus.
Reich noted a key topic on the call will likely be any update on the company’s progress against its target of $2B in cost cuts over three years.
Margin Pressures in Focus
Not everyone is fully on board. Seeking Alpha analysts rate SBUX a Hold, while Wall Street analysts lean Buy.
One concern flagged: coffee prices and tariffs continue to push up raw input costs. A growing share of delivery sales also means more revenue going to delivery platforms.
Analyst Gary Alexander noted the real test is whether Starbucks can sustain mid-to-high single-digit comparable sales growth in the U.S. over multiple quarters. That question remains open.
EPS estimate revisions over the last three months show 15 upward moves versus five downward ones. Revenue revisions have been more mixed, with nine upward against 14 downward.
Peers in the restaurant segment have reported varied results. Domino’s posted 4.3% year-on-year revenue growth, beating estimates by 1.2%, and its stock gained 1.3% on the day. Darden reported 13.7% revenue growth, in line with consensus.
Restaurant stocks as a group are down 2.7% on average over the past month. SBUX has held flat over the same period.
Analyst consensus price target sits at $106.45, just above the current stock price of $104.
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