Dive Brief:
- Starbucks recorded 4% same-store sales growth in Q1 of fiscal year 2026 for North America and the U.S., indicating that CEO Brian Niccol’s turnaround plan has reversed the sales problems that started in Q2 of its fiscal 2024, according to an earnings release.
- The bulk of the increase was attributable to transactions, which increased 3%, rather than pricing or average ticket, the latter of which increased 1%.
- Starbucks’ sales wins were driven by the success of its promotional calendar, with events like the Bearista cup drop and holiday launch, and return of seasonal beverages. The chain’s broader investments in operations, menu design and its new Green Apron Service Model also helped, Niccol said on the company’s earnings call.
Dive Insight:
Starbucks’ sales growth was broad based, with both rewards and non-rewards members notching increased transactions. Niccol said it was the first time both of those consumer cohorts saw a jump in traffic since Q2 2022, a sign that the company’s momentum has shifted after years of stagnation and decline.
Several factors, including the brand’s long-term investment in labor, contributed to the traffic growth, Niccol said, rather than a single ephemeral driver.
“We leveraged bigger rosters, new customer service standards, continued low hourly partner turnover and our Smart Queue [order sequencing] algorithm to deliver more consistent, timely and personal service,” Niccol said.
Niccol singled out the Bearista promotion as a driver of consumer excitement, and said that the brand’s in-store investments and marketing strategy are working in concert to drive its relevance and traffic gains.
“It's one thing to see what people are claiming [about brand affinity], it's another thing to see it in their behavior. And what I'm seeing in their behavior is every age cohort has increased their visitation with Starbucks over the last couple months,” Niccol told analysts.
Data aggregated by Placer.ai found that Starbucks’ foot traffic began outperforming the coffee segment as a whole in October, and that this continued through November as the Bearista promotion and holiday LTOs began to draw consumers.
That outperformance, and the overall increase in transactions, seem to validate Niccol’s thesis that Starbucks can maintain a strong digital presence and a strong mobile ordering system while also prioritizing on-premise transactions and experience.
The sales growth also shows the company managed to shrug off the impact of a long strike by Starbucks Workers United, which began in November. A spokesperson for the union said the strike is continuing at present, but in a different form than previously. November and December saw escalating numbers of stores joining. Later many stores voted to return to work, the union confirmed, while others remained on strike and have been joined, on a temporary basis, by other stores. At any given moment over the last month, the union said, more than 40 stores and more than 1,000 workers have been on strike.
The company’s strong performance in the quarter weakens SBWU’s leverage over the chain and could indicate the union lacks the short-term strength to severely damage the brand’s sales or operations.
Starbucks international markets also performed well, with a 5% comparable store transaction increase for the whole system and a 7% increase in China, where the chain offloaded a majority stake of its business in November.
