Computed from published fixed rules, not a model's judgement — though one input, the count of high-severity risks, comes from the AI analysis below.
Not investment advice and not a price target: it scores the quarter's fundamentals, not the stock. Full methodology →
AI Takeaway
Starbucks Q1 FY2026 saw revenue grow 5.5% YoY to $9.9B, but net income collapsed 62.4% to $293.3M as operating margin compressed sharply to 9.0%, reflecting significant cost pressures and restructuring headwinds under the company's turnaround effort.
Revenue
$9.92B
+5.50% YoY
EPS (Diluted)
$0.26
-62.32% YoY
Operating Income
$890.8M
-20.58% YoY
Source: SEC XBRL
Starbucks (SBUX) reported Q1 FY2026 revenue of $9.92B, up 5.5% year over year. Operating margin was 9.0%, down 2.9 points from 11.9% a year earlier. Operating cash flow was $1.6B, down 22.9% year over year. SBUX's fiscal Q1 FY2026 corresponds to calendar Q4 2025.
Last 4 quarters: 2 beats
| Quarter | Actual EPS (USD) | Consensus (USD) | Result |
|---|---|---|---|
| Jun 2026 | 0.85 | 0.67 | Beat +26.1% |
| Mar 2026 | 0.50 | 0.44 | Beat +14.2% |
| Dec 2025This filing | 0.56 | 0.60 | Miss -6.3% |
| Sep 2025 | 0.52 | 0.57 | Miss -9.5% |
Adjusted (non-GAAP) EPS of $0.56 versus the $0.60 analyst consensus — a -6.3% miss for Dec 2025. Analyst consensus is quoted on the adjusted (non-GAAP) basis the street uses. GAAP diluted EPS for this quarter was $0.26.
Compiled by AI from this SEC filing
Total revenue increased 5.5% YoY to $9.9B in Q1 FY2026, up from $9.4B in the prior year period, suggesting some recovery in top-line performance even as the company navigates a challenging consumer environment and ongoing business transformation.
Source: 10-Q Income Statement
Operating income fell 20.6% YoY to $890.8M, driving operating margin down approximately 295 basis points to 9.0% from 11.9% in the prior year quarter, indicating that cost pressures — including labor, restructuring charges, and investments in the turnaround — are significantly outpacing revenue growth.
Source: 10-Q Income Statement & Key Ratios
Net income dropped a steep 62.4% YoY to $293.3M from $780.8M, with net margin compressing to just 2.96%, suggesting substantial non-operating charges or tax impacts beyond the operating line that further eroded profitability in the quarter.
Source: 10-Q Income Statement
Operating cash flow declined 22.9% YoY to $1.60B from $2.07B, reflecting weaker earnings conversion, while investing outflows narrowed significantly to -$322.9M from -$855.2M, suggesting reduced capital expenditure as the company prioritizes cash preservation during its restructuring phase.
Source: 10-Q Cash Flow Statement
Current assets surged 65.0% YoY to $12.0B, pushing the current ratio to 1.05x and suggesting improved short-term liquidity, though long-term debt rose 3.3% to $16.1B and stockholders' equity remains deeply negative at -$8.4B, reflecting the company's leveraged capital structure.
Source: 10-Q Balance Sheet
Compiled by AI from this SEC filing · 3 high, 2 medium, 0 low
Starbucks carries stockholders' equity of -$8.4B, worsening from -$7.5B a year ago, driven by accumulated share buybacks and retained losses. This structural deficit means total liabilities of $40.6B far exceed total assets of $32.2B, creating financial fragility if earnings do not recover.
Source: 10-Q Balance Sheet
Net income fell 62.4% YoY to $293.3M despite a 5.5% revenue increase, indicating that cost investments and restructuring charges are severely pressuring the bottom line. If the turnaround strategy does not yield efficiency gains, sustained margin compression could threaten dividend sustainability.
Source: 10-Q Income Statement
Starbucks paid $705.1M in dividends in Q1 FY2026, more than double its net income of $293.3M for the same period, meaning dividends are being funded by debt or cash reserves rather than earnings. This is unsustainable over the long term without a meaningful earnings recovery.
Source: 10-Q Cash Flow Statement & Income Statement
Long-term debt stands at $16.1B, up 3.3% YoY, against a negative equity base, resulting in a debt-to-equity ratio that is not meaningfully interpretable but signals extreme leverage. Rising interest rates or refinancing risk could increase debt service costs and further pressure free cash flow.
Source: 10-Q Balance Sheet
Operating cash flow fell 22.9% YoY to $1.60B, reducing the company's ability to self-fund capital expenditures, debt repayment, and dividends simultaneously. Continued deterioration in cash generation could force difficult capital allocation trade-offs.
Source: 10-Q Cash Flow Statement
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue $B | 9.92 $B | 9.40 $B | +5.50% |
Operating Income $B | 0.89 $B | 1.12 $B | -20.58% |
Net Income $M | 293.30 $M | 780.80 $M | -62.44% |
EPS (Basic) $ | 0.26 $ | 0.69 $ | -62.32% |
EPS (Diluted) $ | 0.26 $ | 0.69 $ | -62.32% |
Answers draw on this SEC filing and the data on this page
Starbucks' Q3 FY2026 results were dominated by the China joint venture closure, delivering a one-time gain and a shift to a higher-margin licensed model, while North America comparable sales grew 8.1%.
Starbucks reported strong financial performance in Q2 FY2026 with significant growth in revenue and net income, despite challenges in cash flow and equity position.
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