Starbucks says expects tariff, coffee pressures to moderate in second half

Says In May, rolling out a new feature in app that lets customers schedule their order pickup time. Says expects this enhancement will bring even more order and predictability to mobile ordering. Says new 60 Starbucks (SBUX) Rewards redemption option has become most used reward, accounting for approximately a third of all redemptions. Says while still early, seen a growing number of customers visit four or more times a week since launching last month. Says Japan had an outstanding quarter led by a record sales week over New Year’s, robust tourism and strong additions to menu. Says half of international margin expansion was driven by held for sale accounting related to Starbucks China, which temporarily reduced store operating expenses and DNA by approximately $118M in the quarter. Says half of the product and distribution increase was driven by innovation led product mix and the remaining balance was inflation, largely related to tariffs and elevated coffee prices. Says while market dynamics can change, expects these tariff and coffee pressures to moderate in the back half of FY26, especially given recent trends in coffee prices. Says current macro environment brings heightened uncertainty to operating landscape and consumer behavior more broadly. Says U.S. licensed stores returned to positive system comps for the first time since Q1 FY24. Says this was led by record airport volumes and growth in other discretionary segments, together with continued recovery in retail and grocery. Comments taken from Q2 earnings conference call.