Starbucks Forecasts 2.4% EPS Growth as Dividend Pressure Rises
Starbucks’ upcoming quarter EPS is forecast to rise 2.4% year over year, with an Earnings ESP of +0.58%. Its 15-year dividend growth streak is at risk as free cash flow sank -$1.44B, the payout ratio topped 200%, and investors seek board changes over labor issues.
1. Earnings Outlook
Starbucks’ fiscal upcoming quarter is projected to deliver 2.4% year-over-year EPS growth, underpinned by an Earnings ESP of +0.58%. This follows four consecutive quarters of consensus misses, highlighting the importance of execution on digital sales and store innovations.
2. Dividend Sustainability
The company’s free cash flow plunged to -$1.44 billion last year, pushing the dividend payout ratio above 200%. With dividend growth slowing to 1.6% in 2025 from a decade-long average of 24.5%, the 15-year streak faces heightened risk of a cut in 2026.
3. Governance and Labor Relations
A coalition of public pension funds is calling for votes against two board directors, citing persistent failures to manage labor relations. Ongoing union disputes and employee protests have intensified scrutiny on board oversight and could influence future governance reforms.