After revising its earnings outlook upward, Starbucks announced plans to close about 250 stores in North America. Restructuring costs are expected to be about $300 million, including approximately $200 million in cash expenses. The focus will be on the progress of the margin recovery.
At its third-quarter results briefing, Starbucks revised its earnings outlook upward but also disclosed in a filing plans to close about 250 stores in North America. The closures are expected to result in about $300 million in restructuring costs, of which approximately $200 million is expected to be paid in cash.
US same-store sales were reportedly up 7.9% in the third quarter, but around half of the growth is attributed to store closures, sales transfers and delivery growth. As a result, margin is considered an appropriate indicator for assessing underlying performance.
TIKR's EBIT margin had historically ranged from 14% to 16%, but declined to 9.90% in fiscal 2025. The third-quarter non-GAAP consolidated operating margin was 14.4%, although reports noted a significant impact from tariff refunds. Some analysts also view the China business as a structural driver of growth.
The third quarter included a high operating margin on part of the revenue from a new $53 million joint venture. At the same time, the costs of restructuring and store realignment are viewed as prerequisites for a long-term recovery in earning power.