How Much Should One Number Worry Starbucks Shareholders

If you own Starbucks (SBUX), the headline revenue number can mislead you. Revenue fell 1.4% from a year earlier in the latest quarter, its only drop in four quarters, but Starbucks said the decline came mainly from turning its China stores into a licensed joint venture. Comparable store sales rose 7.9%, though management said close to half of that came from store closures, sales transfers, and delivery. That matters because the stock costs far more per dollar of profit than the S&P 500. The question is whether the underlying growth holds up, and Starbucks' store plans are one clue.

Starbucks Now Plans Fewer Net New Stores

Starbucks now expects to add fewer net new cafes than it planned, and it is closing some it already has. Think of how any coffee chain grows. It can grow sales by opening more stores, or by selling more at the stores it already has. When it adds fewer stores, more of its growth has to come from the ones it already has.

Starbucks is closing about 250 underperforming North American stores, most of them before its fiscal year ends this month. That is about 1% of its cafes in the region. For fiscal 2026, it now projects net new openings of about 440 cafes, down from its prior outlook of 600 to 650. News reports describe the closures as the latest stage of a turnaround aimed at bringing customers back into its stores.

Starbucks said the latest quarter's revenue drop came mainly from the China deal. It now records product sales and royalties from the China joint venture, plus its share of the venture's profit, instead of full store sales, which shrinks reported revenue.

Starbucks' Revenue Growth Has Slowed

Starbucks' revenue grew 3.1% a year over the last three years, well below the pace it set earlier in the decade. That is a clear slowdown.

In the most recent fiscal year, revenue grew 2.8%. The year before, it grew just 0.6%. Neither year shrank, so this is slower growth, not a business in decline.

Profit has thinned over the same stretch, though margins improved in each of the last two quarters. Operating margin is the share of each sales dollar left after the costs of running the business. At Starbucks, it is 10.1% over the past year, below its three-year average of 11.9%. That slower, thinner business is what you buy at today's share price.

Is Starbucks Stock Priced For A Comeback?

The price likely assumes one. As of Sept. 24, 2026, Starbucks trades at 54 times its past year's earnings, against 22.4 times for the S&P 500. That multiple is the share price divided by a year of profit per share. A high one usually means buyers expect profit to grow.

The stock fell 12.4% over the past month, while the S&P 500 gained about 1%.

There is a fair case against worrying too much. Revenue over the last twelve months grew 4.5% from a year earlier, faster than in the most recent fiscal year. The twelve-month figure still includes three quarters of growth before the latest drop. Starbucks' comparable store sales have now grown for four straight quarters, and management expects U.S. comparable sales growth of 6.5% or better in its fiscal fourth quarter, which ends this month. Even with this week's closures, Starbucks still expects to open more cafes than it closes in fiscal 2026.

A holder should treat slower growth as a real risk, but read the right number. Reported revenue will likely fall again in the fiscal fourth quarter, because the China change will cover the whole quarter, and Starbucks' own full-year outlook allows for that. The better test is comparable store sales, especially in North America. If they keep growing, the turnaround is holding. If they stall, the slowdown is real, and that would matter more at this price.

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