Starbucks (SBUX) Down 5.5% Since Last Earnings Report: Can It Rebound?

It has been about a month since the last earnings report for Starbucks (SBUX). Shares have lost about 5.5% in that time frame, underperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is Starbucks due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.Starbucks Q3 Earnings Miss Estimates, Revenues Rise Y/YStarbucks reported mixed third-quarter fiscal 2025 results, with earnings missing the Zacks Consensus Estimate and net revenues beating the same. The top line increased year over year, but the bottom line declined. The company made a one-time investment in Leadership Experience 2025 and recorded a discrete tax charge, which together impacted third-quarter earnings per share (EPS) by 11 cents.The quarter’s performance reflected progress across all four pillars of the company’s turnaround strategy — partners, store experience, customer engagement and menu innovation. The company continued to advance its 'Back to Starbucks' strategy with a focus on building long-term strength. Going forward, Starbucks plans to launch a series of innovations to support growth in fiscal 2026, improve service and strengthen the overall business.Discussion on Earnings, Revenues & Comps of StarbucksIn the fiscal third quarter, the company reported EPS of 50 cents, missing the Zacks Consensus Estimate of 65 cents by 23.1%. The bottom line also decreased 46.2% from 93 cents reported in the prior-year quarter.Net revenues of $9.46 billion beat the consensus mark of $9.3 billion by 1.7%. The reported value was up 3.8% from $9.11 billion reported in the prior-year quarter.Global comparable store sales declined 2% year over year. The downside was due to a decrease of 2% in comparable transactions, partially offset by a 1% increase in average tickets.Starbucks opened 308 net new stores worldwide, bringing the total store count to 41,097 at the quarter’s end.Starbucks’ Overall Margin Contracts in Q3The company’s non-GAAP operating margin contracted 660 basis points (bps) to 10.1% from the prior year. The decline was primarily due to deleverage and investments associated with the "Back to Starbucks" initiative, including additional labor and Leadership Experience 2025, and inflation.On a constant currency basis, the non-GAAP operating margin contracted 650 bps year over year.Starbucks’ Segmental DetailsStarbucks has three reportable operating segments: North America, International and Channel Development.North America: The segmental net revenues were $6.93 billion, up 2% year over year. The segment’s comparable store sales declined 2%, which was in line with the fall reported in the prior-year quarter. Average transactions declined 3%, whereas the change in tickets rose 1% year over year.Operating margin contracted 770 bps to 13.3% from 21% in the prior-year quarter. International: This segment’s net revenues of $2.01 billion increased 9% year over year. Comparable store sales were at breakeven in contrast to a 7% fall reported in the prior-year quarter. Average transactions increased 1%, whereas the change in tickets fell 1% year over year.Operating margin contracted 200 bps year over year to 13.6%. The downside was due to heightened promotional activity.    In the fiscal third quarter, comps in China were 2% against a 14% decline reported in the prior-year quarter. Transactions rose 6%, whereas the change in tickets fell 4% year over year.Channel Development: Net revenues in the segment increased 10% year over year to $483.8 million. The upside was driven by an increase in contributions to the Global Coffee Alliance.The segment’s operating margin contracted 860 bps year over year to 45.1%. A decline in North American Coffee Partnership joint venture income, a mix shift and higher global product costs caused the downside.Starbucks’ Financial DetailsThe company ended the fiscal third quarter with cash and cash equivalents of $4.17 billion compared with $3.29 billion at the fiscal 2024-end. As of June 29, 2025, long-term debt totaled $14.6 billion compared with $14.3 billion as of Sept. 29, 2024. The current portion of long-term debt as of the quarter’s end was $2.75 billion compared with $1.25 billion as of fiscal 2024-end.How Have Estimates Been Moving Since Then?It turns out, estimates revision have trended downward during the past month.The consensus estimate has shifted -12.36% due to these changes.VGM ScoresCurrently, Starbucks has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a score of D on the value side, putting it in the bottom 40% for this investment strategy.Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Starbucks has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.Quantum Computing Stocks Set To SoarArtificial intelligence has already reshaped the investment landscape, and its convergence with quantum computing could lead to the most significant wealth-building opportunities of our time.Today, you have a chance to position your portfolio at the forefront of this technological revolution. In our urgent special report, Beyond AI: The Quantum Leap in Computing Power, you'll discover the little-known stocks we believe will win the quantum computing race and deliver massive gains to early investors.Access the Report Free Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Starbucks Corporation (SBUX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks