---
title: "Is Starbucks's Stock a Buy Ahead of Its Q3 Earnings Report Tomorrow?"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/294100256.md"
description: "Starbucks (SBUX) reports Q3 earnings on July 29. Analysts expect $9.1B revenue and $0.65 EPS, reflecting a 30% year-over-year profit increase despite lower revenue due to China's joint venture restructuring. The 'Back to Starbucks' strategy drove strong North American growth, but international performance lagged. With the stock up 23% this year and trading at a high forward P/E of ~35, concerns remain about sustaining momentum as the company relies more heavily on its mature domestic market."
datetime: "2026-07-28T18:09:25.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/294100256.md)
  - [en](https://longbridge.com/en/news/294100256.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/294100256.md)
---

# Is Starbucks's Stock a Buy Ahead of Its Q3 Earnings Report Tomorrow?

On Thursday, we’ll get a clearer picture of how the turnaround story at **Starbucks** (SBUX \-0.56%) is progressing. The coffee slinger is scheduled to publish its fiscal third-quarter results after market close tomorrow (Wednesday, July 29).

So far this year, the stock is up by more than 23%, crushing the 8% growth of the bellwether **S&P 500** index. That’s made it expensive in terms of valuations. The upcoming earnings report will show whether the company can maintain momentum while its “Back to Starbucks” strategy is still brewing.

![Starbucks logo overlaid on employees signing with their hands in a green-tinted background](https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2Nkbi5jb250ZW50LmZvb2xjZG4uY29tL2ltYWdlcy8xdW1uOXFlaC9wcm9kdWN0aW9uLzc0NTRhNTc0MjQ2ZTg5ODQ5MjYyZGE2YWY5Y2IzNWIzZDU1ZTQ0YTUtMTIwMHg4MDAucG5nP3c9MTIwMCZoPTgwMCZxPTc1JmF1dG89Zm9ybWF0Jnc9Mzg0MA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg)

Image source: The Motley Fool.

## Caffeinated numbers

Collectively, analysts expect Starbucks to post just over $9.1 billion in revenue and $0.65 per share in net income. That’s nearly 4% below the company’s third-quarter fiscal 2025 figure (although this will likely be due mainly to changes in the China business; more on that in a moment). On the flip side, that bottom-line projection would be a sweet 30% improvement over the year-ago number.

Back to Starbucks, the return-to-growth strategy that’s been the defining feature of CEO Brian Niccol’s tenure, has been producing results lately. At least, that’s according to the company, which attributed its solid second-quarter performance to the initiative.

Expand

![Starbucks Stock Quote](https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL1NCVVgucG5nJnc9MTI4?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg)

## NASDAQ: SBUX

Starbucks

Today's Change

(-0.56%) $-0.58

Current Price

$103.08

### Key Data Points

Market Cap

$118BMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.

Day's Range

$102.91 - $106.00

52wk Range

$77.99 - $109.23

Volume

194.7K

Avg Vol

7.7M

Gross Margin

15.85%

Dividend Yield

2.38%

Personally, I’ve seen at least a few of the program’s goals — more comfortable and welcoming interiors, quicker order implementation, etc. — in effect at several of my local cafes in California. So I think Back to Starbucks is a sensible program, and the company is executing it effectively.

While I doubt it’s the only reason for the improvements the company posted in the second quarter, growth was impressive. That period saw Starbucks increase net revenue by nearly 9% year over year (to over $9.5 billion) on the back of a 7% rise in comparable sales. Both growth rates rose steadily across the last four quarters. Meanwhile, net earnings not under generally accepted accounting principles (non-GAAP, or adjusted) raced 22% higher to $0.50 per share.

Management also raised certain full-year 2026 guidance items. Its “comps” were adjusted to at least 5% over the 2025 tally, from the previous forecast of more than 3%. Adjusted earnings per share (EPS) are now expected to land at $2.25 to $2.45, compared to the preceding guidance of $2.15 to $2.40.

## Increasingly dependent on domestic business

There was much to like in Starbucks’ second quarter, and there should be some encouraging numbers in the subsequent frame. To me, though, there are areas of concern I think all Starbucks-watchers should keep an eye on.

One is international sales. Much of the company’s second-quarter growth came from its North America outlets, where same-cafe growth was over 7%, fueled by a 4.4% rise in number of transactions and a 2.7% improvement in average “ticket” (i.e., customer spend per purchase). The numbers for international cafes were notably lower, at a respective 2.6%, 2.1%, and 0.5%. Worse, Starbucks’ once-great hope for its business abroad, China, posted 0.5%, 2.1%, and a _decline_ of 1.6%, respectively.

Starbucks is letting go of China to some extent; in early April, it completed the shift of its business there to a 60/40 joint venture, majority-owned by the private equity firm Boyu Capital. The U.S. company will no longer book register sales as part of its overall revenue; instead, it’ll earn royalty fees and a 40% share of net profit. So beware — certain China figures starting in the third quarter will be notably lower.

That leaves the North America business as more of a core for the company than it’s been in many years. And, if anything, Starbucks has been closing locations rather than opening new ones (it boasted only 11 net new stores worldwide in the second quarter, for a total of 41,129).

Meaning that it’s in a position where it has to squeeze growth from a store base that will expand only modestly, at best. There are only so many operational efficiencies and improvements that can be made to effect this; ditto for price increases in an era of increasing consumer price consciousness. So it feels to me that those recently increasing growth numbers might wither or even go negative before long.

## A high price to pay

My impression of the current state of Starbucks, then, is that it’s a mature business with a huge footprint that has little room to grow. The Back to Starbucks program has produced results, but I don’t envision those efficiency-fueled gains to continue at the recent pace. Meanwhile, the stock is priced for hot growth, with a forward P/E of almost 35, which I doubt will be matched by leaps in profitability.

Starbucks could very well meet or exceed its winning second quarter, but I still wouldn’t feel like it’s a solid, long-term growth story. I’m not enthusiastic about the stock now, and even an estimates-beating third frame isn’t going to sway me.

### Related Stocks

- [SBUX.US](https://longbridge.com/en/quote/SBUX.US.md)
- [SBU.US](https://longbridge.com/en/quote/SBU.US.md)
- [.SPX.US](https://longbridge.com/en/quote/.SPX.US.md)

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