06:32 AM EDT, 07/30/2025 (MT Newswires) -- Starbucks' ( SBUX ) shares rose early Wednesday as the coffee giant reported fiscal third-quarter sales above market estimates, although earnings declined more than expected as the company continued to make investments in its turnaround strategy.

Adjusted earnings came in at $0.50 a share for the quarter ended June 29, dropping from $0.93 the year before, the company said late Tuesday. The consensus on FactSet was for non-GAAP EPS of $0.65.

The decrease mainly came from a nonrecurring investment in an event Starbucks ( SBUX ) held for coffeehouse leaders in June, as part of its Back to Starbucks ( SBUX ) turnaround strategy, as well as a "discrete tax item" as it optimized cash deployment across markets, Chief Financial Officer Cathy Smith said during an earnings call, according to a FactSet transcript. On aggregate, the two items negatively impacted EPS in the quarter by $0.11, according to Smith.

"Our EPS in the quarter reflects the strategic investments we're making in our Back to Starbucks ( SBUX ) strategy, like Leadership Experience 2025, which we believe will power our future growth," Chief Executive Brian Niccol said on the call. "While our financial results for the quarter don't yet reflect all the progress we've made, I see meaningful signs from across our US business that we're on the right path."

Revenue increased 3.8% year over year to $9.46 billion, ahead of the Street's view for $9.29 billion. The stock gained 4.8% in the most recent premarket activity.

Global comparable store sales decreased 2%, more than the 1.3% decline modeled by analysts, driven by a 2% fall in transactions, partially offset by a 1% increase in average ticket. "While our transactions remain impacted by lapping highly-discounted promotions in the prior year, we are seeing continued progress," Smith told analysts on the call.

US same-store sales moved down 2%, although company-operated transaction comparable improved for the third consecutive quarter, according to Smith. International comparable sales were flat, while China advanced 2%, with the group's short-term changes in the country "paying off," Niccol said. The company opened 308 new stores in the quarter.

Starbucks ( SBUX ) remains "conservative" on how current annual trends will change in the ongoing three-month period for its US company-operated business, given that it has a "lot in flight" combined with consumer uncertainties, Smith said. "We know we lose the benefit of ticket and that transactions are improving," the CFO said. "Just where they will net out is unclear."

The tariff environment and coffee prices remain "dynamic," with the company continuing to mitigate expected tariff exposure outside of green coffee, Smith told analysts. Starbucks ( SBUX ) anticipates average coffee costs and coffee tariff impacts to "lag the market" due to its buying and hedging practices, with yearly cost increases estimated to peak in the first half of fiscal 2026, she said.

Starbucks ( SBUX ) expects its short-term margins to be impacted by investments in its stores, partners and customers, but Smith said that will yield returns to drive better margins later. "To offset these investments, we are focusing on driving a healthier and more efficient cost structure that allows us to weather macro headwinds, drive strong sales flow-through, and simultaneously fund our Back to Starbucks ( SBUX ) strategy," she said.