Starbucks Corp (NASDAQ:SBUX, ETR:SRB) shares rose 4.6% after hours on Tuesday as the coffee chain said its turnaround efforts are ahead of schedule, encouraging investors despite a sharper-than-expected drop in profits.
Adjusted earnings per share for the third quarter fell to $0.50, down 46% from a year earlier and well below analysts’ forecasts. Operating margin contracted to 10.1%, hit by higher costs and a one-off tax charge.
Still, revenue climbed 4% to $9.5 billion, exceeding Wall Street’s expectations.
The core North America business reported a 2% increase in revenue, though operating income was down by over a third and margins tightened sharply.
In the US, comparable sales slipped 2% on lower customer traffic, partly offset by higher average spending per order. Internationally, sales grew 9%, with China, Starbucks’ biggest market outside the US, posting 2% comparable sales growth.
Starbucks added 308 net new stores in the quarter, bringing its global total to over 41,000.
Chief executive Brian Niccol said, “We’ve fixed a lot... we are ahead of schedule. In 2026, we’ll unleash a wave of innovation that fuels growth.”
The stock rose $4.29 to $97.25.