Starbucks Corp. (SBUX) shares jumped Wednesday after delivering something the coffee chain hasn't managed in two years: more people actually showing up to buy lattes.

The company posted first-quarter fiscal 2026 results that were decidedly mixed—revenue of $9.92 billion sailed past analyst expectations of $9.63 billion, while adjusted earnings of 56 cents per share fell just short of the 59-cent consensus. But the real headline? US comparable transaction growth turned positive for the first time in eight quarters.

That's not nothing. After watching traffic decline quarter after quarter, Starbucks finally saw customers return. Consolidated net revenue climbed 6% year-over-year, with global comparable store sales up 4% thanks to a 3% increase in transactions and a 1% bump in average ticket size.

The Numbers Behind The Comeback

Geographically, the story looks promising. North American comparable store sales rose 4% year-over-year, international locations increased 5%, and China—a critical growth market—delivered a solid 7% comparable sales gain.

The profit picture, however, tells a more complicated story. Adjusted operating income fell 11% to $998.8 million, with margins contracting 180 basis points to 10.1%. In North America specifically, operating income dropped from $1.2 billion a year ago to $867 million this quarter. Operating margin compressed significantly from 16.7% to 11.9%, squeezed by higher labor costs tied to the "Back to Starbucks" initiative, tariff pressures, and rising coffee costs.

The international segment offered better news, with operating income climbing to $282.7 million from $237.1 million year-over-year. Operating margin expanded to 13.7% from 12.7%, benefitting from sales leverage, lower store operating expenses, and reduced depreciation after classifying China retail assets as held for sale.

Growth Continues

Starbucks opened 128 stores during the quarter, bringing its total footprint to 41,118 locations worldwide. The company held approximately $3.41 billion in cash and cash equivalents at quarter's end. The board also declared a 62-cent per share cash dividend, payable February 27 to shareholders of record as of February 13, 2026.

"Our Q1 results demonstrate our 'Back to Starbucks' strategy is working and we believe we're ahead of schedule," said Brian Niccol, chairman and chief executive officer. "It's great to see the sales momentum driven by more customers choosing Starbucks more often, and this is just the beginning."

Chief financial officer Cathy Smith added: "With our 'Back to Starbucks' initiatives gaining traction, we have clear line of sight to translating topline strength into sustainable earnings growth that positions us for long-term profitable growth."

The Road Ahead

During the earnings call, management laid out a margin recovery plan built on $2 billion in cost savings over the next two years through tighter procurement, technology investments, and operational efficiency. The company expects fiscal 2026 revenue growth to track global comparable sales, with operating margins improving in the second half as coffee inflation and tariff pressures peak in the second quarter before easing.

Starbucks is forecasting 3% global comparable sales growth in fiscal 2026, backed by an ambitious development pipeline. The company plans to open 450–500 international stores (nearly half in China) and 150–175 new US company-operated locations—totaling 600 to 650 new coffeehouses globally.

Management highlighted protein offerings as a traffic driver but admitted the company still hasn't hit its four-minute transaction-time goal, even as investments in the Green Apron service program aim to build momentum.

Full-Year Guidance

For fiscal 2026, Starbucks expects global and US comparable store sales growth of 3% or greater, with consolidated net revenues growing at a similar rate. Adjusted earnings per share are projected in the range of $2.15 to $2.40, compared to the consensus estimate of $2.35.

Private Jet Policy Changes

In a notable corporate governance update, Starbucks has removed limits on CEO Brian Niccol's use of the company's private jet. Following a board-ordered security review, Niccol is now mandated to fly exclusively on corporate aircraft for all travel, including personal trips. Under the revised policy, he no longer has to reimburse Starbucks for non-business flights—reversing a prior arrangement that capped company-covered personal travel at $250,000 annually.

Starbucks shares were up 7.45% at $102.85 at the time of publication on Wednesday.