Starbucks is scheduled to report third-quarter fiscal 2026 earnings on Wednesday after the market close, with analysts expecting another quarter of mixed results as the company works through margin pressures and a still-uneven recovery. The report will give investors another read on whether recent operational improvements are carrying through to the bottom line and whether management’s turnaround efforts are continuing to offset cost headwinds.

Shares of Starbucks (SBUX) are trading around $104, up 23% year to date. That gain has outpaced the S&P 500’s 8% rise over the same period. The current consensus analyst price target is $106.45.

Wall Street expects Starbucks to report earnings of $0.65 per share on revenue of $9.12 billion. That would represent a 3.6% decline in revenue from the year-ago quarter.

In the prior quarter, Starbucks beat both earnings and revenue expectations. The company reported $9.53 billion in revenue, an 8.8% increase from the same period a year earlier, and comparable store sales also exceeded analyst estimates.

Even so, expectations have eased in recent weeks. For the current quarter, analysts are now looking for a 3% year-over-year revenue decline, a sharp change from the 3.8% growth Starbucks posted in the second quarter of last year.

Over the past 24 months, Starbucks has topped EPS estimates in only 13% of quarters and beaten revenue forecasts 50% of the time. That uneven record has helped keep expectations cautious heading into the report.

Turnaround Progress Remains in Focus

In April, Starbucks reported its third straight quarter of positive comparable sales growth after seven consecutive quarters of declines. Chief Executive Brian Niccol called the result “a milestone for the business.”

RBC Capital Markets analyst Logan Reich said the company appears to be building momentum, with comparable sales supported by added labor investments, strategic store closures, sales transfers to nearby locations, and longer operating hours. Reich’s firm expects third-quarter results to land broadly in line with Street consensus.

Reich also said one of the main discussion points on the earnings call is likely to be management’s progress toward its target of $2 billion in cost reductions over three years, which remains a key measure of how much room Starbucks has to protect margins while it keeps investing in the business.

Margin Pressures Remain a Concern

Not all market watchers are equally optimistic. Seeking Alpha’s analyst community currently rates SBUX as a Hold, while the broader Wall Street consensus leans toward Buy.

Analysts are watching several pressures closely. Elevated coffee commodity prices and tariff-related costs are still weighing on raw material expenses. At the same time, a growing share of sales is flowing through third-party delivery services, which leaves a larger portion of revenue with platform providers.

Analyst Gary Alexander said the key question is whether Starbucks can sustain mid- to high-single-digit comparable sales growth in the U.S. across multiple quarters. He noted that this has not yet been definitively established.

Over the trailing three months, EPS estimates have seen 15 upward revisions and five downward revisions. Revenue forecasts have moved in both directions, with nine analysts raising estimates and 14 cutting them.

Other restaurant companies have also delivered mixed results. Domino’s reported 4.3% year-over-year revenue growth, beating estimates by 1.2%, and its shares rose 1.3% after the announcement. Darden Restaurants posted 13.7% revenue growth and met consensus expectations.

Restaurant-sector stocks have declined an average of 2.7% over the past month. Starbucks shares have been essentially flat over the same period.

The latest consensus target of $106.45 implies modest upside from the current share price near $104.