What Are Starbucks Stock Bulls Not Worried About

Investors are pricing Starbucks (SBUX) stock at 55.7 times its earnings over the last twelve months, well above the 22.7 multiple for the S&P 500. That premium suggests a bet that U.S. customer visits will keep rising and profit will continue its recovery. The company delivered a fourth straight quarter of comparable sales growth in fiscal Q3 2026. Yet executives used the accompanying earnings call to acknowledge pressure on U.S. consumer sentiment. So what is that pressure?

Starbucks Flags Pressure On US Consumers

During that July 29, 2026 call, management maintained that the business remains strong despite continued pressure on U.S. consumer sentiment. The company acknowledged the year-over-year traffic comparisons it will lap, as well as broader variability in consumer behavior. Starbucks also faced a question on the call about how long it can sustain its current same-store sales momentum.

So far, U.S. customers are still walking through the doors more often. U.S. transactions climbed 4.2% from a year earlier in fiscal Q3 2026. Starbucks is not leaning on menu hikes either, with management noting that pricing added less than one point to the average ticket.

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How Much Of Starbucks Depends On North America?

The short answer is most of it. The North America segment, encompassing U.S. and Canadian stores, generated $7.4 billion of Starbucks's $9.3 billion in revenue during fiscal Q3 2026. Comparable store sales there grew 8.1%, outpacing the 5.7% growth at international company-operated stores. So the region facing consumer pressure is also the one growing faster.

What Is The Price Assuming?

Shareholders are paying a steep premium for that growth. At the end of June 2026, Starbucks's P/E ratio sat higher than its level at 33 of the 37 quarter-ends with a P/E on record since fiscal Q4 2016. The shares closed on October 15, 2026, 10.7% below their highest close of the past year, reached on August 26, 2026.

Profitability has yet to fully rebound. Over the twelve months ending in June 2026, Starbucks posted an operating margin of 10.1% on our adjusted basis, compared to 15.1% two years earlier. The current share price appears to assume those margins will keep recovering. The latest quarter partly supports that outlook: the operating margin improved to 12.9% in fiscal Q3 2026 on the same basis, up from 9.5% a year earlier.

How Worried Should Starbucks Holders Be?

Investors should treat a weaker U.S. consumer as a real but slowly developing risk. Management has acknowledged the issue, yet it has not actually materialized in U.S. store visits. The current stock price appears to assume U.S. store visits keep rising.

One strong quarter of margin gains, following a much smaller year-over-year improvement in fiscal Q2, offers limited visibility into the future, and management's own forecast sets a lower bar. Starbucks expects U.S. comparable sales growth of 6.5% or better in fiscal Q4 2026, down from 7.9% in fiscal Q3.

In September, Starbucks cut its fiscal 2026 net new store target to about 440 from 600 to 650 and said it will close about 250 underperforming North America coffeehouses, with roughly $300 million in restructuring charges and most closures due by the end of fiscal 2026.

Starbucks shares fell further than the S&P 500 in each of the four most recent market shocks with figures on record. That included a 40% slide during the 2022 inflation shock, compared to about a 24% decline for the broader index.

U.S. customer visits are still rising, but the margin recovery is less proven, with just one strong quarter on the books and part of that gain coming from one-time tariff refunds. U.S. transaction growth and operating margin remain the key metrics to watch when Starbucks delivers its next report for fiscal Q4 2026.

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