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SEC filingStarbucks delivered strong Q2 FY2026 results, with revenue rising 8.8% to $9.5B and operating income surging 37.8% to $828.1M. Profitability gains were driven by operating margin expansion to 8.7%, while free cash flow reached $1.4B supported by disciplined capital allocation.
Consolidated net revenues increased 8.8% to $9.5 billion in Q2 FY2026, compared to $8.8 billion in the prior year period. Management attributed the growth to the company's strategic focus on new store openings and comparable store sales, underpinned by disciplined capital allocation. The company emphasized that its long-term growth model relies on these core drivers as it works to drive consistency at scale across its global footprint.
Operating income rose 37.8% to $828.1 million, driving operating margin to 8.7%. This significant margin expansion reflects the company's efforts to balance revenue growth with a healthier cost structure. Store operating expenses as a percentage of total net revenues remained flat for the first two quarters of fiscal 2026, indicating disciplined expense management despite inflationary pressures.
Net income increased 33.0% to $510.9 million, with diluted EPS reaching $0.45 compared to $0.34 in Q2 FY2025. The 32.4% EPS growth demonstrates operational leverage benefiting shareholders.
Net cash provided by operating activities was $1.96 billion, down from $2.36 billion in the prior year. The decrease was primarily due to payment timing changes in accounts payable and a decrease in net earnings.
Cash and investments stood at $2.0 billion as of March 29, 2026. Management indicated that cash requirements for the remainder of fiscal 2026 will consist primarily of repayments of long-term debt and capital expenditures for investments in new and existing stores, supply chain, and corporate facilities.
Looking ahead, management expects commodity prices, particularly coffee, and new tariffs to continue impacting results of operations. The company remains focused on making strategic investments to improve operating foundations while maintaining a healthier cost structure.