Starbucks Reports Strong Q1 Sales, Signals Turnaround and Major Mexico Expansion
January 29, 2026 – Starbucks has broken a two-year slump, posting stronger-than-expected sales and traffic growth in its fiscal first quarter of 2026. The results, driven by holiday drinks and viral merchandise, have bolstered confidence in CEO Brian Niccol’s turnaround strategy. Concurrently, the coffee giant announced plans to surpass 1,000 stores in Mexico this year, even as it continues to navigate significant labor disputes in the United States.
Financial Performance and Turnaround Signs
For the quarter ended December 28, 2025, Starbucks reported net revenue of $9.9 billion, a 6% year-over-year increase that exceeded analyst expectations. Global comparable store sales grew 4%, accelerating from previous quarters, with North America and the U.S. seeing 4% growth and the International segment surging 7%. This positive traffic and sales trend marks a significant reversal after a prolonged period of challenges. However, earnings per share of $0.56 fell short of the $0.59 forecast. The company’s stock rose sharply following the report, reflecting investor optimism that Niccol’s initiatives—including store renovations and an enhanced food menu—are taking root.
Key Facts & Expansion Targets
| Metric | Q1 FY2026 Result |
|---|---|
| Net Revenue | $9.9 billion (up 6% YoY) |
| Earnings Per Share (EPS) | $0.56 (missed estimate of $0.59) |
| Global Comparable Sales Growth | 4% |
| Net New Stores Opened (Q1) | 128 |
| FY2026 Comp Sales Guidance | 3% or better globally |
| Mexico Store Target (2026) | Surpass 1,000 coffee houses |
| India Store Count | Surpassed 500 stores |
Labor Relations and Ongoing Challenges
Despite the financial rebound, Starbucks continues to face headwinds from labor organizing. On January 23, 2026, workers at six unionized Starbucks locations in Minnesota staged a one-day strike protesting the company’s labor law practices. The U.S. National Labor Relations Board has issued over 100 complaints against Starbucks for alleged anti-union tactics. These disputes represent a persistent environmental, social, and governance (ESG) risk for the company and its investors, even as operational performance improves.
Frequently Asked Questions
What were Starbucks’ key financial results for Q1 2026?
Starbucks reported Q1 revenue of $9.9 billion, a 6% increase year-over-year, beating expectations. Global comparable store sales grew 4%. However, earnings per share of $0.56 missed the $0.59 analyst forecast.
What is Starbucks’ expansion plan for Mexico?
Starbucks has announced an aggressive expansion target for Mexico, planning to surpass 1,000 coffee houses in the country during the 2026 calendar year. This highlights Latin America as a key growth market for the company.
Is Starbucks still dealing with labor issues?
Yes. As recently as January 23, 2026, workers at six stores in Minnesota went on strike. The NLRB has over 100 active complaints against Starbucks regarding its response to unionization efforts, indicating ongoing significant labor relations challenges.