Starbucks’ Turnaround Gains More Steam as Sales and Transactions Rise

During its fiscal Q2, the coffee giant saw growth in its top and bottom line for the first time in more than two years.

North America and U.S. same-store sales rose more than 7 percent in the quarter, fueled by more than 4 percentage points of transaction growth—a level Starbucks hasn’t seen in three years.

The U.S. company-owned segment expanded transactions across all dayparts, particularly in the morning, which is now back to fiscal 2022 marks. Delivery—a proven source of incremental revenue—played a big role in ticket and transaction growth in Q2, expanding more than 30 percent year-to-date across corporate shops.

Sales growth drivers

Another stat to note: U.S. licensed shops experienced positive same-store sales for the first time since Q1 2024, thanks to record airport volumes, growth in other discretionary segments, and recovery in retail and grocery.

Consolidated company revenue was $9.5 billion, an increase of 8 percent year-over-year. As for the bottom line, consolidated operating margin improved to 9.4 percent, up about 1.1 percent, leading to earnings growth year-over-year.

Spend increased across all income and age demographics. Also, brand affinity reached five-year highs in consideration and purchase intent, led by Gen Z and millennials that “now believe their Starbucks purchase is worth it compared to a year ago,” according to CEO Brian Niccol.

Positive same-store sales have continued into April, pushing Starbucks to up its 2026 comp growth guidance to 5 percent or better and earnings per share to $2.25 to $2.45, increases from 3 percent or greater and $2.15 to $2.40, respectively.

“We believe this quarter reflects the turn in our turnaround, but we know there is more work to be done,” Niccol told investors during the brand’s Q2 earnings call. “Our Back to Starbucks strategy is working because we’re executing with rigor and focus and the outcomes are showing up in real and visible ways. Thanks to our partners and the craft, connection and sense of community they deliver for our customers. This is Starbucks.”

Operational improvements

Operational enhancements have fueled much of the comeback. Currently, about 80 percent of locations are meeting key performance targets, with four-minute throughput in the cafe and drive-thru and 12-minute mobile order pickup times—and that’s with higher transaction volumes. Niccol expects speed to get even better with Starbucks’ upcoming rollout of scheduled ordering, allowing guests to order up to an hour ahead within a specific window. All of the success is powered by the company’s Smart Queue system, which properly sequences orders across in-store, drive-thru, and mobile channels.

“I think we’re just getting better at how we’re deploying, allocating the labor based on the transaction growth that we’re seeing in the business across all these different access points, right?” Niccol said. “The delivery channel is growing for us in a big way, cafe business is growing, as is our mobile order pickup business. So as we learn about those different experiences and how those transactions are coming back to the business, we have the ability to better deploy and even get better customer experience.”

Starbucks is also leaning into its Grow program, a new reporting and ranking system providing clearer standards and more accountability. Shops are ranked one to five shots based on their performance; since the program launched in October, the number of company-operated units rated four shots or higher has increased over 30 percentage points. This has translated to higher customer experience scores and employee confidence.

This is good news for the coffee giant, since retention leads directly to better sales: In Q2, 80 percent of 5-shot locations had a leader who had been in place for more than a year.

Meanwhile, the chain continues to drive visits with menu innovation, creative marketing, and rewards program.

In Q2, Starbucks released new bakery items—alongside an enhanced bake case—premium Matcha drinks, and its 1971 dark roast coffee. Cold foam—strengthened by the addition of new flavors and introduction of protein—remains Starbucks’ most popular modifier, with sales up more than 40 percent in Q2 across company-owned units.

The brand followed that up in April with a lineup of new energy refreshers that has exceeded expectations. The $2 billion energy platform, designed to drive later-day visits, will expand with new flavors and blended options later this year. For instance, the Tropical Butterfly Refresher is one of the highlights of the upcoming summer menu.

Market trends and competition

Starbucks’ dive into further beverage innovation coincides with a larger trend across quick service. A host of drink-forward chains—i.e. Dutch Bros, 7 Brew, Scooter’s Coffee, and Swig—are growing swiftly. Other brands not traditionally associated with beverages are making investments too. McDonald’s new lineup of three refreshers and three dirty sodas launches on May 6. Taco Bell, KFC, and Chick-fil-A have all rolled out drink prototype spinoffs as well.

Starbucks welcomes the increased competition.

“It’s almost, I think, a complement to the fact that our refresher business is being imitated in so many places,” Niccol said. “And what my experience has been is when the category starts being talked about, the market leader benefits. And that’s going to be us in this scenario.”

In terms of marketing, the company remained culturally relevant in Q2 thanks to partnerships with Coachella and the Winter Olympics. Starbucks also made headlines with its new ChatGPT app, which helps guests formulate an order through conversational language and their current mood.

Additionally, 90-day active Starbucks Rewards members reached a record 35.6 million in Q2, including growth in member and nonmember transactions year-over-year. The chain saw moderate increases in membership quarter-over-year, improving upon last year’s seasonal decline during the same period.

The company revamped its loyalty program earlier this year, including a new 60-star redemption tier in which guests can get up to $2 off any item. This has become the most used reward, accounting for about one-third of redemptions. Since the launch of the updated program, the number of guests visiting four or more times each week has increased, and the rate and volume of card loads have grown steadily. Another factor is Free Mod Mondays, which should contribute to greater interest in cold foam.

The loyalty program divides into three categories: Green, Gold, or Reserve, depending on how frequently a customer visits. More frequency equals more benefits. The changes have been welcomed by guests, according to Niccol.

“I think it demonstrates you don’t have to make our rewards program, a coupon book, which is where I felt like we were when I first got here and we had to stop doing all that discounting,” the CEO said. “This needed to be about engagement. This needed to be about personalization, and this needed to be about recognition. And that’s exactly what you’re seeing with our three rewards tiers.”

Store experience and expansion

Starbucks’ journey toward bringing back the “third place” atmosphere is progressing as well. Coffeehouse uplifts—featuring more comfortable seating and additional power outlets to encourage longer stays—are driving positive feedback and transaction growth. Starbucks has finished over 300 upgrades, all of which have met budget and led to zero closure days (uplifts are done overnight during closed hours). The brand expects to have more than 1,000 store uplifts completed in its top 20 markets by the end of its fiscal 2026.

“If you’ve experienced a store with an uplift, the third place truly is alive, vibrant,” Niccol said. “Our partners, I think, are really proud of their coffeehouse, and they really take to heart the idea of being the community coffeehouse again.”

Starbucks finished Q2 with 16,944 U.S. shops, down from 17,122 a year ago. The brand spent last year closing a slew of shops that were either underperforming or didn’t meet the company’s revitalized third place requirements, including mobile-order-only outlets.

Internationally, same-store sales rose 2.6 percent, led by 2 percent transaction growth. The chain’s 10 largest international markets—including China, Japan, South Korea, and Mexico—delivered positive comps for the first time in nine quarters. Starbucks international portfolio finished Q2 with 22,744 shops.

Starbucks plans to add 600 to 650 net new locations this year, including 150 to 175 net new U.S. company-operated shops.