Starbucks raises annual forecasts again as turnaround takes root

The Seattle-based company forecast global same-store sales growth of near 6%, above its prior forecast of about 5% or above. It expects adjusted earnings per share to be between $2.55 and $2.65, compared with its previous forecast of $2.25 to $2.45.

"Starbucks has begun to experience market share stabilization in recent months, most notably with younger diners," Consumer Edge analyst Michael Gunther said.

"Consumers may be shifting dining dollars toward in-home eating but are leaving room in the budget for daily drink habits," he added.

Starbucks reported third-quarter global same-store sales growth of 7.9%, which surpassed analysts' expectations of 5.7%, according to data compiled by LSEG.

The "Back to Starbucks" strategy had been squeezing margins, as it involved heavy investments in staffing and store operations, which the company has looked to tackle with cost cuts through layoffs, office consolidation and streamlining its operations.

The company said refunds received in the quarter "largely offset" tariffs costs incurred so far this fiscal year.

The company's consolidated quarterly operating margin was 14.4% in the quarter, compared with 10.1% a year earlier. This helped it post adjusted earnings per share of 85 cents, compared with estimates of 66 cents.

Starbucks has raised its annual sales and profit forecasts for the second time, as CEO Brian Niccol's years-long turnaround efforts reignite demand at the world's largest coffee chain, sending its shares up 5% in extended trading.