Starbucks reported a rise in second-quarter sales and earnings, driven by higher customer traffic and early gains from its turnaround strategy, even as margins faced pressure in North America.

The coffee chain said global comparable store sales increased 6.2% in the 13 weeks to 29 March, led by a 3.8% rise in transactions and a 2.3% increase in average ticket.

Net revenues rose 9% year-on-year to $9.5 billion, while diluted earnings per share climbed 32% to $0.45. On a non-GAAP basis, EPS reached $0.50, up 22%.

Chief executive Brian Niccol said the quarter marked a turning point for the company’s “Back to Starbucks” plan, which aims to reinvigorate store experience and improve operational discipline.

In North America, comparable store sales increased 7.1%, supported by a 4.4% rise in transactions. Segment revenues grew 7% to $6.9 billion.

However, operating income in the region fell 9% to $679.9 million, with margins contracting to 9.9% from 11.6% a year earlier. The decline was attributed to higher labour investment tied to the turnaround plan, product mix shifts and inflation, including elevated coffee costs.

Internationally, performance was more mixed. Comparable store sales rose 2.6%, with modest ticket growth and stronger transactions. In China, comps edged up 0.5%, as a decline in average spend offset traffic gains.

Despite softer sales momentum, international operating income surged 84% to $398.6 million, with margins expanding to 19.4%. This was largely driven by lower depreciation and operating costs linked to the classification of Starbucks’ China retail operations as held for sale.

The company’s Channel Development segment, which includes packaged coffee and ready-to-drink products, posted 39% revenue growth to $567.8 million, supported by gains in the Global Coffee Alliance.

Operating income in the segment rose 19%, although margins narrowed due to product mix and joint venture dynamics.

During the quarter, Starbucks expanded its global store base to 41,129 locations, with the US and China accounting for 61% of the total.

The company also advanced structural changes in China, completing a deal with Boyu Capital that will see the investor take a 60% stake in the local retail business, with Starbucks retaining 40%.

Looking ahead, Starbucks raised its full-year guidance, forecasting global comparable sales growth of at least 5% and non-GAAP EPS of $2.25 to $2.45.

The company said it expects margin improvement to continue as cost discipline and sales growth build through the remainder of the year.