Starbucks Targets Fiscal 2027 Margin Expansion and EPS Growth

Starbucks Corporation expects fiscal 2027 earnings per share to land between $3.15 and $3.25, representing roughly 18% growth at the midpoint. This forecast comes even as consolidated revenues are projected to fall 1%, largely due to shifting retail operations in China into a licensed joint venture. The transition removes Chinese store revenue from consolidated sales during the first half of fiscal 2027, although the company will still record its portion of joint venture profits.

To counteract lower reported revenue, Starbucks relies on expanding operating margins, targeting between 13.5% and 14% for fiscal 2027, up about 190 basis points at the midpoint. Management attributes this improvement to sales leverage, coffeehouse execution, and internal cost savings, having already achieved about half of its targeted gross savings. North America company-operated comparable sales are anticipated to rise approximately 4%, aided by beverage innovation and service initiatives, while a 53rd fiscal week is slated to add around $700 million in sales and over 10 cents to earnings per share.

The longer-term outlook follows fiscal fourth-quarter results reported on October 29th, in which the company earned adjusted earnings per share of $0.80, beating consensus estimates of $0.72. However, quarterly revenue dropped 4.5% year over year to $9.14 billion, falling short of expectations. In response to recent results, Starbucks increased its quarterly dividend from $0.62 to $0.63 per share, payable on November 27th to shareholders of record on November 13th.

Brokerage firms maintain varied perspectives on the coffee retailer. Citigroup raised its target price to $107 from $104 while maintaining a neutral stance. Meanwhile, Stephens started research on the chain with an equal-weight recommendation and set its price objective at $39. According to MarketBeat figures, the broader analyst consensus sits at Hold with an average target price of $110.79 across 40 firms.