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Starbucks is starting to see signs of a turnaround. For the first time in 2 years, more customers are walking into its stores. This is an important shift after a long period of falling foot traffic.

The company posted mixed results for the quarter. Sales improved as store visits increased. At the same time, profits came under pressure due to higher costs and spending on restructuring.

Starbucks also brought back formal guidance. It had pulled its forecasts in October 2024 because of uncertainty. Investors welcomed the clarity. Shares jumped more than 8 percent in premarket trading.

For the quarter ending December 28, Starbucks reported revenue of $9.92 billion. This was better than expected. It marked the second straight quarter of positive same store sales.

Global same store sales rose 4 percent. Customer transactions increased by 3 percent. This was the first rise in traffic in 2 years. Many investors see this as a key sign that the worst may be over.

In the US, same store sales also rose 4 percent. Holiday demand helped. The company focused again on its core menu. Seasonal drinks and limited time merchandise brought customers back into stores.

International markets also showed strength. Outside the US, same store sales climbed 5 percent. This showed the recovery is not limited to one region.

Even with better sales, profits fell sharply. Net income dropped to $293.3 million, or 26 cents per share. A year earlier, it had earned $780.8 million, or 69 cents per share.

Adjusted earnings came in at 56 cents per share. This missed expectations.

Management pointed to several pressures. Coffee prices are higher. Tariffs are adding costs. Spending tied to the turnaround is also weighing on margins. Restructuring and impairment charges made the impact worse.

Net sales rose 6 percent from a year ago. But the drop in profit shows how sensitive Starbucks remains to costs, even as demand improves.

China stood out as a bright spot. Same store sales there jumped 7 percent. China is Starbucks’ second largest market.

The company also shared plans to change how it operates in the region. Starbucks will form a joint venture with Boyu Capital to run its China business. The deal is expected to close in the second quarter of fiscal 2026, pending approvals.

Starbucks said it will continue running its China stores through the second half of fiscal 2026. This is meant to ensure a smooth transition. China remains a key part of the company’s long term growth plans.

Starbucks is also reshaping its store network. It opened 128 net new stores during the quarter. At the same time, it remains careful about where it expands.

For fiscal 2026, the company plans to open 600 to 650 net new stores worldwide. This follows the closure of about 400 US locations last year. Those closures were part of an effort to cut underperforming stores.

The strategy now is quality over quantity.

With guidance back in place, attention turns to what comes next. Starbucks expects adjusted earnings per share of $2.15 to $2.40 in fiscal 2026. This is slightly below market expectations.

The company is targeting at least 3 percent growth in global and US same store sales.

More details are expected at an upcoming investor day in New York. With customer traffic finally rising again, the big question is whether Starbucks can keep the momentum going while bringing profit pressure under control.