Starbucks reported a fall in global comparable store sales for its fiscal third quarter, highlighting ongoing headwinds in its core US market, even as its China business shows early signs of a rebound.

The Seattle-based coffee chain posted a 4 per cent year-over-year increase in total revenue, reaching US$9.5 billion. However, global comparable store sales fell by 2 per cent, driven largely by weakening foot traffic in North America, its largest market, where transactions dropped 3 per cent.

In contrast, China emerged as a rare bright spot. Comparable store sales in the country, Starbucks’ second-largest market, rose 2 per cent, marking a return to growth after quarters of decline. 

The company has added more than 500 new stores in China over the past year, bringing its total to 7828. Starbucks is also reportedly reviewing multiple proposals from potential local partners to help accelerate expansion into lower-tier cities, while retaining strategic control.

Starbucks faces intensifying competition in China from fast-growing domestic rivals such as Luckin Coffee and Cotti Coffee, which have been expanding rapidly with lower prices and quicker service models.

In North America, the company is actively implementing its ‘Back to Starbucks’ initiative, an effort aimed at strengthening store operations, boosting employee engagement, and enhancing the overall customer experience.

Chairman and CEO Brian Niccol struck an optimistic tone, pointing to early progress in the company’s turnaround efforts.

“We’ve fixed a lot and done the hard work on the hard things to build a strong operating foundation, and based on my experience of turnarounds, we are ahead of schedule,” commented Niccol. 

“In 2026, we’ll unleash a wave of innovation that fuels growth, elevates customer service, and ensures everyone experiences the very best of Starbucks. We’re building back a better Starbucks experience and a better business.” 

Starbucks is also phasing out underperforming mobile order-only stores and shifting toward new cafe formats that include seating and drive-thrus, with a focus on enhancing the in-store experience.

The company announced plans to introduce a suite of new beverage and food items in fiscal 2026, including protein-based cold foams, coconut water-infused drinks, gluten-free snacks, and customisable energy drinks.

Upgrades to the company’s mobile app and loyalty rewards program are also in development, alongside continued investment in digital and operational technology.