SBUX 10-K & 10-Q changes, risk factors and insider trading
Starbucks Corp. · Nasdaq · Retail-Eating & Drinking Places · CIK 829224 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “We are subject to risks from changes to the trade policies and tariff and import/export regulations by the U.S. and other foreign governments.”
New heading “The unauthorized access, use, theft, or destruction of customer or employee data (personal, financial, or other), or of Starbucks proprietary or confidential information, that is stored in our information systems or by third parties could impact our reputation and brand and expose us to potential liability and loss of revenues.”
Removed heading “Summary of Risks Associated with Our Business”
Removed heading “Risks Related to Operating a Global Business”
Removed heading “Risks Related to Supply Chain”
Removed heading “Risks Related to Macroeconomic Conditions”
Removed heading “Risks Related to Human Capital”
Removed heading “Risks Related to Competition”
Removed heading “Risks Related to Environmental, Social, and Governance Matters”
Removed heading “Risks Related to Regulation and Litigation”
Removed heading “Risks Related to Cybersecurity and Data Privacy”
Removed heading “Risks Related to Intellectual Property”
Removed heading “Risks Related to Brand Relevance and Brand Execution”
Removed heading “Our success depends substantially on the value of our brands, and failure to preserve their value could have a negative impact on our financial results.”
Removed heading “We may not be successful in our marketing strategies, promotional and advertising plans, and pricing strategies.”
Removed heading “Risks Related to Our Business”
Removed heading “Our investments to transform and enhance the customer experience, including through technology, may not generate the expected results.”
Removed heading “Economic conditions in the U.S. and international markets have adversely affected, and could continue to adversely affect, our business and financial results.”
Removed heading “The unauthorized access, use, theft, or destruction of customer or employee data (personal, financial, or other), or of Starbucks proprietary or confidential information that is stored in our information systems or by third parties on our behalf, could impact our reputation and brand and expose us to potential liability and loss of revenues.”
Largest changes
“Unauthorized access, theft, or destruction of data or any breach, ransomware attack or other incident affecting our systems—whether through external attacks or internal methods—could result in reputational harm, loss of customers, business disruption, regulatory investigations, litigation (including class actions), and significant financial costs. It may take considerable time for us to investigate and evaluate the full impact of incidents, particularly for sophisticated attacks. …”see in full comparison
“As a retailer that is dependent upon consumer discretionary spending, our results of operations are sensitive to changes in or uncertainty about macroeconomic conditions. A continued economic downturn or recession, or slowing or stalled recovery therefrom, may have a material adverse effect on our business, financial condition, or results of operations. …”see in full comparison
“Erosion of trust in our brand value can be caused by isolated or recurring incidents originating both from us or our business partners, or from external events. Such incidents can potentially trigger boycotts of our stores or result in civil or criminal liability, which can have a negative impact on our financial results. …”see in full comparison
“We have been, and in the future may be, subject to litigation and other legal proceedings that may adversely affect our business. These legal proceedings may involve claims brought by store partners, customers, government agencies, suppliers, shareholders, or others through private actions, administrative proceedings, regulatory actions, or other litigation, including litigation on a class or collective basis on behalf of what can be a large group of potential claimants. …”see in full comparison
“The complexity of the regulatory environment in which we operate and the related costs of compliance are both increasing due to additional or changing legal and regulatory requirements, our ongoing expansion into new markets and new channels, and the fact that foreign laws occasionally conflict with domestic laws. …”see in full comparison
“Overall, the regulatory environment is growing more complex due to evolving laws, market expansion, and jurisdictional conflicts. Due to evolving technologies, such as artificial intelligence technologies, the legal and regulatory landscape is uncertain and evolving, and may impose compliance obligations that could increase our costs or limit how we may use these technologies. Moreover, the costs of monitoring and responding to such regulations could have an adverse effect on our operations or financial condition. …”see in full comparison
Full comparison: every changed paragraph (237)
You should carefully consider the risks described below in addition to the other information set forth in this Annual Report on Form 10-K, including the Management’s Discussion and Analysis of Financial Conditions and Results of Operations section, the Quantitative and Qualitative Disclosures About Market Risk section, the Controls and Procedures section, and the consolidated financial statements and related notes. The risks described below are not the only risks facing the Company. The following risks, some of which have occurred and any of which may occur in the future, could materially and adversely affect our current and future business and financial performance. Risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and operating results.
Summary of Risks Associated with Our Business
Our business is subject to various risks and uncertainties that you should consider before investing in the Company. These risks are described in more detail in this Item 1A. These risks include, but are not limited to, the following:
•Our success depends substantially on the value of our brands,brand, and failure to preserve theirits value could have a negative impact on our financial results.
The Starbucks brand is recognized throughout most of the world, and we have received high ratings in global brand value studies. To be successful in the future, we believe we must preserve, grow, and leverage the value of our brands across all sales channels.
Various factors, events, or conditions may result in a diminution or erosion of trust in our brand value. Adverse developments pertaining to the matters discussed elsewhere in this risk factors section may negatively impact the value of our brands. Such developments may include difficulties executing strategic initiatives, adapting to shifting consumer preferences, or managing global operations, and challenges stemming from macroeconomic volatility, supply chain pressures and disruptions, or an evolving competitive, regulatory, social, and geopolitical landscape. The impact of such developments on the value of our brands may be exacerbated if they receive considerable publicity or if they result in litigation. The value of our brands may be affected by actual or perceived developments, whether isolated or recurring, whether the result of actions by us or our business partners or the result of external developments, and whether such developments are in our control. Negative commentary about Starbucks, even if inaccurate or malicious, has in the past, and could in the future, damage the value of our brand, and adverse impacts may be compounded by social media, video-sharing, and messaging platforms that could dramatically increase the speed with which negative publicity may be disseminated, often before we have a meaningful opportunity to investigate, respond to, and address an issue. In addition, we cannot ensure that our store partners, licensees, or other business partners will not act or refrain from acting in a manner that adversely affects the value and relevance of our brand. Because brand value is based in part on consumer perceptions on a variety of subjective qualities, it may be difficult to address developments negatively impacting the value of our brands in a timely and effective manner to mitigate harm.
The diminution of, or erosion of trust in, our brand value may have negative consequences for the Company. Consumer demand for our products and our brand value could diminish significantly if we or our employees, licensees, or other business partners fail to preserve the quality of our products, or act, or are perceived to act, in an unethical, illegal, or otherwise inappropriate manner. To the extent third parties object to actions or positions taken or perceived to have been taken by us, it may generate negative sentiment around our business. Developments affecting the value of our brands have in the past, and may in the future, trigger boycotts of our stores, products, and brand. Each of these consequences, individually and collectively, could have potentially material impacts on our brand value, business performance, and financial results.
•We may not be successful in our marketingbrand, strategies,marketing, promotionalpromotional, and advertising plans,advertising, and pricing strategies.
Our continued success depends on our ability to adapt brand, marketing, promotional, advertising, and pricing strategies to shifting economic conditions, competitive pressures, and evolving customer preferences. We operate in a complex and costly marketing environment. Decisions to collaborate or refrain from collaborating with certain parties may impact our brand image and, consequently, our financial performance. Our programs may not always reach consumers as intended, particularly given the wide range of generational, geographical, cultural, and socioeconomic characteristics and channels of communication used by our customers, and effective resource allocation across channels, including digital, is critical. Additionally, factors such as operating costs, competitor strategies, and inflation may affect our pricing decisions, which could impact demand. For example, there is no guarantee future cost increases will be absorbed by customers. If our marketing or pricing strategies underperform relative to competitors, our sales and market share could decline. Likewise, if we do not continuously strengthen our capabilities in marketing, data analytics (including artificial intelligence and machine learning) and innovation to understand and maintain or grow consumer interest, brand loyalty, and market share while strategically expanding into other profitable categories of the commercial beverage industry, our business could be negatively affected.
•We may not be successful in implementing important strategic initiatives or effectively managing growth, which may have an adverse impact on our business and financial results.
•Our investments to transform and enhance the customer experience, including through technology, may not generate the expected results.
•Evolving consumer preferences and tastes, as well as adverse public or medical opinions about the health effects of consuming our products, may adversely affect our business.
•If our business partners and third-party providers do not satisfactorily fulfill their responsibilities and commitments, it could damage our brand, and our financial results could suffer.
•Reported incidents involving food- or beverage-borne illnesses, tampering, adulteration, contamination, or mislabeling, whether or not accurate, could harm our business.
•If we are unable to meet our projections for new store openings or efficiently maintain the attractiveness of our existing stores, our operating results could suffer.
Risks Related to Operating a Global Business
•We are highly dependent on the financial performance of our North America operating segment.
•We are increasingly dependent on the success of certain international markets in order to achieve our growth targets.
•We face risks as a global business that could adversely affect our financial performance.
•Our reliance on key business partners may adversely affect our business and operations.
Risks Related to Supply Chain
•Increases in the cost of high-quality arabica coffee beans or other commodities or decreases in the availability of high-quality arabica coffee beans or other commodities could have an adverse impact on our business operations and financial results.
•Our supply chain may be unable to fully support current and future business needs.
•Interruption of our supply chain and our reliance on suppliers could affect our ability to produce or deliver our products and could negatively impact our business and profitability.
Risks Related to Macroeconomic Conditions
•Our financial condition and results of operations are subject to, and may be adversely affected by, a number of macroeconomic and other factors, many of which are largely outside our control.
•Economic conditions in the U.S. and international markets have adversely affected, and could continue to adversely affect, our business and financial results.
•Failure to meet our announced guidance or market expectations for our financial performance will likely adversely affect the market price and increase the volatility of our stock, and fluctuations in the stock market as a whole may also impact the market price and volatility of our stock.
Risks Related to Human Capital
•The loss of key personnel, difficulties with recruiting and retaining qualified personnel, or ineffectively managing changes in our workforce could adversely impact our business and financial results.
•Changes in the availability and cost of labor could adversely affect our business.
Risks Related to Competition
•We face intense competition in each of our channels and markets, which could lead to reduced profitability.
Risks Related to Environmental, Social, and Governance Matters
•Climate change may have an adverse impact on our business.
•Our business is subject to evolving corporate governance and public disclosure regulations and expectations, including with respect to environmental, social, and governance matters, that could expose us to numerous risks.
•Certain activist shareholder actions have caused, and could continue to cause, us to incur expense, hinder execution of our business strategy, and adversely impact our stock price.
Risks Related to Regulation and Litigation
•Failure to comply with applicable laws and changing legal and regulatory requirements could harm our business and financial results.
•We have been, and could continue to be, party to litigation or other legal proceedings that could adversely affect our business, results, operations, and reputation.
Risks Related to Cybersecurity and Data Privacy
•Failure to maintain satisfactory compliance with certain privacy and data protection laws and regulations may result in substantial negative financial consequences, reputational harm, and civil or criminal penalties.
•The unauthorized access, use, theft, or destruction of customer or employee data (personal, financial, or other), or of Starbucks proprietary or confidential information that is stored in our information systems or by third parties on our behalf, could impact our reputation and brand and expose us to potential liability and loss of revenues.
•We rely heavily on information technology in our operations and growth initiatives, and any material failure, inadequacy, interruption, or security failure of that technology could harm our ability to effectively operate and grow our business and could adversely affect our financial results.
Risks Related to Intellectual Property
•Failure to adequately protect our intellectual property or ensure that we are not infringing on the intellectual property of others could harm the value of our brand and our business.
Risks Related to Brand Relevance and Brand Execution
Our success depends substantially on the value of our brands, and failure to preserve their value could have a negative impact on our financial results.
We believe we have built an excellent reputation globally for the quality of our products, for delivery of a consistently positive consumer experience, and for our global environmental and social impact programs. The Starbucks brand is recognized throughout most of the world, and we have received high ratings in global brand value studies. To be successful in the future, particularly outside of the U.S. where the Starbucks brand and our other brands are less well-known, we believe we must preserve, grow, and leverage the value of our brands across all sales channels. Brand value is based in part on consumer perceptions on a variety of subjective qualities.
Erosion of trust in our brand value can be caused by isolated or recurring incidents originating both from us or our business partners, or from external events. Such incidents can potentially trigger boycotts of our stores or result in civil or criminal liability, which can have a negative impact on our financial results. Incidents that can erode trust in our brand value include actual or perceived breaches of privacy or violations of domestic or international privacy laws, contaminated food, product recalls, store employees or other food handlers infected with communicable diseases, safety-related incidents, or other potential incidents discussed in this risk factors section. The impact of such incidents may be exacerbated if they receive considerable publicity, including rapidly through social or digital media (including for malicious reasons), or if they result in litigation. Negative postings or comments on social media or networking websites about Starbucks, even if inaccurate or malicious, have in the past, and could in the future, generate negative publicity about Starbucks across media channels that could damage the value of our brand. It may be difficult to address such negative publicity, including as a result of fictitious media content (such as content produced by generative artificial intelligence or bad actors) across media channels. Additionally, consumer demand for our products and our brand value could diminish significantly if we, our employees, licensees, or other business partners fail to preserve the quality of our products, act or are perceived to act in an unethical, illegal, racially-biased, unequal, inequitable, or socially irresponsible manner, including with respect to the sourcing, content, or sale of our products, service and treatment of customers at Starbucks stores, treatment of employees, including our responses to unionization efforts, or the use of customer data for general or direct marketing or other purposes. Allegations, even if untrue, that we are not respecting internationally recognized human rights, are failing to comply with applicable workplace and labor laws, or are aligned with positions on social or geopolitical issues could also negatively impact our brand value. Additionally, if we fail to comply with laws and regulations, take controversial positions or actions, fail to deliver a consistently positive consumer experience in each of our markets, including by failing to invest in the right balance of wages and benefits to attract and retain employees who represent the brand well, or fail to foster an inclusive and diverse environment, our brand value may be diminished. In addition, we cannot ensure that our store partners, licensees, or other business partners will not take actions that adversely affect the value and relevance of our brand.
Furthermore, if we are not effective in making sufficient progress toward our environmental and social program goals, consumer trust in our brand may suffer, and this perception could result in negative publicity or litigation. The ongoing relevance of our brand may depend on making sufficient progress toward our environmental and social program goals, each of which requires company-wide coordination and alignment. Increased public focus, including by governmental and nongovernmental organizations, on environmental sustainability matters, including climate change, diminishing energy and water resources, packaging and waste, deforestation, biodiversity loss, greenhouse gas emissions, and land use, may result in increased pressure to set goals and take actions to meet them, which could expose us to market, operational, and execution costs or risks. Statements regarding our environmental and social program goals reflect our current plans and aspirations; our environmental and social program-related policies, practices, and goals are voluntary, challenging, and subject to change at our discretion. Some third parties may object to the scope or nature of our environmental and social program initiatives or goals, or any revisions to these initiatives or goals, which could give rise to negative responses by governmental actors (such as retaliatory legislative treatment), consumers (such as boycotts or negative publicity campaigns), or other third parties that could adversely affect our brand value.
We may not be successful in our marketing strategies, promotional and advertising plans, and pricing strategies.
Our continued success depends in part on our ability to adjust our marketing strategies, promotional and advertising plans, and pricing strategies to respond quickly and effectively to shifting economic and competitive conditions as well as evolving customer preferences. We operate in a complex and costly marketing, promotional, and advertising environment. Competition to attract and retain high-quality marketing partners and endorsers has increased. Our decisions to collaborate or to cease collaborating with certain endorsers or marketing partners in light of actions taken or statements made by them could seriously harm our brand image with consumers and, as a result, could have an adverse effect on our sales and financial condition. Our marketing, promotional, and advertising programs may not be successful in reaching consumers in the way we intend. Our success depends in part on whether the allocation of our advertising, promotional, and marketing resources across different channels, including digital, allows us to effectively and efficiently reach consumers in ways that are meaningful to them. Additionally, many factors, including operating costs, constraints, or changes, and our current and future competitors’ pricing and marketing strategies, could significantly affect our pricing strategies (including price reductions, promotions, discounts, coupons, or free goods), which may prevent us from competing effectively in certain geographies. For example, historically, in order to partially offset inflation and other increases in the costs of core operating resources, we have gradually increased menu prices. There can be no assurance that future cost increases, including as a result of inflation, can be offset by increased menu prices or that our current or future menu prices will be fully absorbed by our customers without any resulting change to their demand for our products. If the advertising, promotional, and marketing programs or our pricing strategies are not successful or are not as successful as those of our competitors, our sales and market share could decrease.
Finally, consumers are focusing more on sustainability and the environmental impacts of Starbucks operations, as well as the alignment of Starbucks actions with its stated mission, values, and promises. An inability to meet consumer expectations with respect to these issues could adversely affect our financial results.
Risks Related to Our Business
We may not be successful in implementing important strategic initiatives or(including our restructuring plan), effectively managing growth, or executing strategic transactions, any of which may have an adverse impact on our business and financial results.
We may not be able to implement important strategic initiatives in accordance with our expectations or that generate expected returns, which may result in an adverse impact on our business and financial results. In conjunction with our broader Back to Starbucks plan, these strategic initiatives are designed to create growth, improve our results of operations, and drive long-term shareholder value. Such initiatives include improving our service model, and further transforming our non-retail support organization; enhancing partner investment to improve customer experience; closing, renovating, and redesigning coffeehouses; strengthening our leadership in coffee; expanding digital engagement through mobile, loyalty, delivery, and international platforms; simplifying store operations; and responsibly growing our global footprint. We have in the past and may in the future undertake restructuring initiatives, which have resulted, and may continue to result, in the incurrence of significant additional costs, and our ability to achieve the anticipated cost savings and other benefits from these actions is subject to many estimates and assumptions, which are subject to uncertainties. Such initiatives may be disruptive both internally and to our customers and may be viewed negatively by our stakeholders.
We undertake these initiatives in the context of ongoing efforts to adapt to shifting consumer behaviors amid economic volatility, optimize our mix of licensed and company-operated stores, expand relevant product offerings across dayparts, and drive growth in cold beverages and Channel Development partnerships, while also advancing appropriate sustainability efforts, managing climate-related risks, and reducing operating costs. Risks to successful and timely implementation of these initiatives include delays or cancellations of store openings due to labor or material shortages, permit procurement issues, or lack of suitable real estate; supply chain scalability and sustainability challenges; underperformance or delays in product innovation; remodel disruptions or cost overruns; coordination and execution challenges; failure to realize cost savings; increased taxation; regulatory constraints, including public health mandates; credit rating deterioration; and geopolitical instability. If these initiatives fail to deliver expected results or we do not fully realize their intended benefits, our financial performance may suffer. Additionally, prioritizing these efforts over other organizational needs or misallocating resources could materially impact our business and operating results.
Managing growth—particularly in international markets—requires balancing local autonomy with consistency in our goals, policies, and standards. Ineffectively balancing these imperatives could materially harm our business results and financial performance.
Furthermore, we may be unsuccessful in implementing strategic initiatives through large acquisitions, integrations, divestitures, partnerships, joint ventures, or other strategic transactions. If we are unable to complete such transactions or successfully integrate and develop acquired businesses, including the effective management of integration activities, we could fail to achieve the expected increases in revenues and operating results or the anticipated synergies and cost savings. In the past we have been, and in the future we may be, unable to realize the expected benefits of strategic transactions, or it may also take longer than expected to realize the expected benefits. This has in the past required, and may in the future require, us to assess potential impairment of assets, including goodwill and intangibles. Any resulting impairment charges could materially affect our financial results.
Management's Discussion & Analysis (MD&A)
Removed heading “Corporate and Other”
Largest changes
Borrowings under thesee in full comparison20212025 creditfacility, which was most recently amended in April 2023,facility will bear interest at avariablefluctuating rate based on the TermSOFR,Secured Overnight Financing Rate (“Term SOFR”), and, for U.S. dollar-denominated loans under certain circumstances, a Base Rate (as defined in the20212025 credit facility), in each case plus an applicablemargin.rate. The applicablemarginrate is based on the Company’s long-term credit ratings assigned bytheMoody’s and Standard & Poor’s rating agencies. The 2025 credit facility contains alternative interest rate provisions specifying rate calculations to be used at such time Term SOFR ceases to be available as a benchmark due to reference rate reform. The “Base Rate” of interest is the highest of (i) the Federal Funds Rate(as defined in the 2021 credit facility)plus0.500%,0.50%, (ii) Bank of America’s prime rate,and(iii) Term SOFR plus1.000%.1.00%TermandSOFR(iv)means1.00%. Upon theforward-lookingoccurrenceSOFRoftermany event of default under the 2025 credit facility, interest on the outstanding amount of the indebtedness under the 2025 credit facility will bear interest at a rateadministratedper annum equal to 2% in excess of the interest then borne bythesuchChicago Mercantile Exchange plus a SOFR Adjustment of 0.100%.borrowings.
•Consolidated operating income decreased to $2.9 billion in fiscal 2025 compared to $5.4 billion in fiscalsee in full comparison2024 compared to $5.9 billion in fiscal 2023.2024. Fiscal20242025 operating margin was15.0%7.9% compared to16.3%15.0% in fiscal2023.2024. Operating margin contraction of130710 basis points was primarily due toinvestmentsrestructuringincostsstoreassociatedpartnerwithwagesthe closure of coffeehouses andbenefitssimplification of our support organization (approximately140240 basis points), deleverage (approximately 210 basis points), investments in support of “Back to Starbucks,” which were largely in labor hours (approximately 130 basis points), andincreased promotional activityinflation (approximately10080 basis points).These decreases were partially offset by pricing (approximately 180 basis points) and in-store operational efficiencies (approximately 130 basis points).
Cashsee in full comparisonusedprovidedinbyinvestingoperating activities was$2.7$4.7 billion for fiscal2024,2025, compared to$2.3$6.1 billion for fiscal2023.2024. The change was primarily due toincreasedthecapitaldecreaseexpenditures,in net earnings of $1.9 billion and a net increase of $451.2 million in inventories, which was primarily driven byhigher existinggreen andnewroastedstorecoffee,investmentslargelyin North America, and lapping the proceeds from the prior year sale of Seattle’s Best Coffee branddue toNestlé.elevated coffee prices. Theseincreasesimpacts were partially offset byhigheramaturitiesnet increase of $713.2 million in loss on disposal, impairment, andcallsaccelerated amortization ofinvestments,assets primarily driven bymaturitiesrestructuring costs as part ofstructuredthedeposits.“Back to Starbucks” strategy and a net increase in accounts payable, primarily due to payment timing.
“In fiscal 2022, we announced our Reinvention Plan in the U.S. market to increase efficiency while elevating the partner and customer experience. As a result of the restructuring efforts in connection with the Reinvention Plan, we recorded immaterial impairment charges in our consolidated statements of earnings during the fiscal years ended October 1, 2023, and October 2, 2022. No restructuring and impairment costs attributable to the Reinvention Plan were recorded in our consolidated statements of earnings during the fiscal year ended September 29, 2024.”see in full comparison
“As a result, we recorded $892 million in restructuring and impairments in our consolidated statements of earnings during the fiscal year ended September 28, 2025. This total included $352.8 million related to impairment and disposition of company-operated store assets and $239.3 million primarily associated with accelerated amortization of ROU lease assets and other lease exit costs due to store closures prior to the end of contractual lease terms. Refer to Note 18, Restructuring, included in Item 8 of Part II of this 10-K, for further discussion.”see in full comparison
“We expect that the macroeconomic challenges we have been experiencing, including impacts from new tariffs and dynamic coffee prices, will continue; however, we are encouraged by the results we have seen from our “Back to Starbucks” initiatives. Following our Green Apron Service model going live across our full U.S company-operated store portfolio in the fourth quarter of fiscal 2025, we are focused on empowering coffeehouse leaders to take ownership of sustaining the model as our permanent way of working, which we expect to enhance the customer experience and drive future transaction growth. …”see in full comparison
Full comparison: every changed paragraph (66)
The discussion of our financial condition and results of operations for the fiscal year ended October 2,1, 2022,2023, included in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) can be found in the Annual Report on Form 10-K for the fiscal year ended OctoberSeptember 1,29, 2023.2024.
We believe our financial results and long-term growth model will continue to be driven by new store openings, comparable store sales, and operating margin management, underpinned by disciplined capital allocation. Comparable store sales includes company-operated stores open 13 months or longer, and exclude the effects of foreign currency exchange rates. Stores that are temporarily closed remain in comparable store sales while permanent store closures are removed in the month following closure. We believe these key operating metrics are useful to investors because management uses these metrics to assess the growth of our business and the effectiveness of our marketing and operational strategies. Throughout this MD&A, we commonly discuss the following key operating metrics:
Starbucks results for fiscal 2025 showed continued progress on key “Back to Starbucks” initiatives, specifically investments in coffeehouse partners, as we work to rebuild a stronger Starbucks. These investments include the Green Apron Service model, additional investments in staffing and hours at the right times to deliver enhanced customer service, and the Leadership Experience 2025, a conference designed to empower and motivate our retail leaders to accelerate our “Back to Starbucks” strategy. Consolidated net revenues increased 3% to $37.2 billion in fiscal 2025 compared to $36.2 billion in fiscal 2024, primarily driven by incremental revenues from net new company-operated stores over the past 12 months, an increase in revenue in the Global Coffee Alliance, and incremental revenue from the acquisition of 23.5 Degrees Topco Limited, a U.K. licensed business partner, partially offset by a decrease in comparable store sales and a decline in our licensed store business.
Starbucks results for fiscal 2024 reflect a challenging operating environment, notably driven by reduced customer traffic compared to fiscal 2023, that pressured our financial results. Consolidated net revenues increased 1% to $36.2 billion in fiscal 2024 compared to $36.0 billion in fiscal 2023, primarily driven by incremental revenues from net new company-operated stores over the past 12 months, partially offset by a decrease in comparable store sales and the impact of unfavorable foreign currency translation.
For both the North America segment and U.S. market, revenue increased 2%1% in fiscal 20242025 compared to fiscal 2023,2024, primarily driven by net new company-operated store growth of 4%, or 441 stores, over the past 12 monthsmonths, andprior higherto productthe and584 equipmentNorth salesAmerica to,restructuring andclosures royaltylate revenuesin from,the ourfourth licensees.quarter of fiscal 2025. This growth was partially offset by a 2% decline in comparable store sales. Comparable transactions for both the North America segment and the U.S. market declined 5%,4%, partially offset by average ticket growth for both the North America segment and the U.S. market of 4%,2%, primarily driven by annualization of pricing.pricing in the current year. Also contributing were lower product and equipment sales to, and royalty revenues from, our licensees.
For the International segment, revenue increased 7% in fiscal 2025 compared to fiscal 2024, primarily driven by net new company-operated and licensed store openings over the past 12 months, incremental net revenue from the conversion of 113 licensed stores to company-operated stores following the acquisition of 23.5 Degrees Topco Limited during the first quarter of fiscal 2025, and higher product and equipment sales to, and royalty revenues from, our licensees.
For the International segment, revenue declined 2% in fiscal 2024 compared to fiscal 2023, primarily driven by the impact of unfavorable foreign currency translation, a 4% decline in comparable store sales driven by a decline in average ticket of 4%, and lower product and equipment sales to, and royalty revenues from, our licensees. These decreases were partially offset by net new company-operated and licensed store openings over the past 12 months.
Revenue for our Channel Development segment decreasedincreased 7%6% in fiscal 20242025 compared with fiscal 2023,2024, primarily driven by aan declineincrease in revenue in the Global Coffee Alliance following the sale of our Seattle’s Best Coffee brand to Nestlé in the second quarter of fiscal 2023 as well as product SKU optimization.Alliance.
In support of our “Back to Starbucks” strategy, we completed our assessment of our coffeehouse portfolio late in the fourth quarter and made decisions to close stores that did not demonstrate a viable path to profitability, or meet our standards of delivering a warm, welcoming space for our customers and partners. Our store closures in North America were substantially completed in fiscal 2025 and the International store closures are expected to be completed in the first half of fiscal 2026. As a result of these closures, we expect a fiscal 2026 reduction in our baseline North America company-operated revenues, partially offset by sales transfer to nearby coffeehouses that remain open. We also expect the future impact to operating margins to be slightly accretive. With a healthier base of coffeehouses, we see meaningful opportunity for disciplined growth. We anticipate that these actions, along with simplifying our broader support organization, will allow us to restructure, redeploy, and refocus our resources on priorities that we believe will deliver long-term sustainable business growth.
We expect that the macroeconomic challenges we have been experiencing, including impacts from new tariffs and dynamic coffee prices, will continue; however, we are encouraged by the results we have seen from our “Back to Starbucks” initiatives. Following our Green Apron Service model going live across our full U.S company-operated store portfolio in the fourth quarter of fiscal 2025, we are focused on empowering coffeehouse leaders to take ownership of sustaining the model as our permanent way of working, which we expect to enhance the customer experience and drive future transaction growth. Further, as announced in early November 2025, we look forward to working with our new strategic joint venture partner, Boyu Capital, to accelerate long-term growth in China. We believe, through strategic prioritization, that we are taking the right actions now and in the future, specifically through our investments in store partners, uplifting the coffeehouse experience through disciplined capital deployment, introducing new food and beverage platforms, reimagining the Starbucks rewards program, and enhancing support for our licensee partners. These actions, while driving more efficiency, accountability, and agility as a company, will lay the foundation for the future of Starbucks.
Our performance was lower-than-expected as a result of a pronounced customer traffic decline, reflecting our targeted and accelerated investments not improving customer behaviors as intended, as well as the macroeconomic and competitive environment in China that further pressured our results. Given these challenges, under the direction of our new chief executive officer, Brian Niccol, we are changing our business strategy to bring customers back to our stores and return to growth. Our “Back to Starbucks” strategy includes supporting our green apron partners, enhancing the customer experience, reestablishing ourselves as the community coffee house, and innovating the coffee tasting experience through product development, marketing, and in-store experience. This strategic reset will provide us with the opportunity to assess the business and refocus our efforts, including capital allocation priorities, efficiency efforts, and store growth initiatives. We remain confident in the strength of our brand and believe that the new action plans will position the Company for sustainable long-term growth.
•Consolidated operating income decreased to $2.9 billion in fiscal 2025 compared to $5.4 billion in fiscal 2024 compared to $5.9 billion in fiscal 2023.2024. Fiscal 20242025 operating margin was 15.0%7.9% compared to 16.3%15.0% in fiscal 2023.2024. Operating margin contraction of 130710 basis points was primarily due to investmentsrestructuring incosts storeassociated partnerwith wagesthe closure of coffeehouses and benefitssimplification of our support organization (approximately 140240 basis points), deleverage (approximately 210 basis points), investments in support of “Back to Starbucks,” which were largely in labor hours (approximately 130 basis points), and increased promotional activityinflation (approximately 10080 basis points). These decreases were partially offset by pricing (approximately 180 basis points) and in-store operational efficiencies (approximately 130 basis points).
•Diluted earnings per share (“EPS”) for fiscal 20242025 decreaseddeclined to $3.31,$1.63, compared to EPS of $3.58$3.31 in fiscal 2023.2024. The decrease was primarily driven by contraction in operating marginmargin, including restructuring and impairment costs in support of our “Back to Starbucks” strategy, as compared to the prior year.
See Note 2, Acquisitions, DivestituresAcquisitions and Strategic Alliance,Divestitures, to the consolidated financial statements included in Item 8 of Part II of this 10-K for information regarding acquisitions and divestitures.
Total net revenues increased $201 million, or 1%, over fiscal 2023, primarily due to higher revenues from company-operated stores ($304 million). The growth in company-operated store revenue was driven by incremental revenues from 1,426 net new company-operated stores, or a 7% increase, over the past 12 months ($1.2 billion). Partially offsetting this increase were a 2% decrease in comparable store sales ($629 million), attributable to a 4% decrease in comparable transactions, partially offset by a 2% increase in average ticket, primarily due to annualization of pricing, and unfavorable foreign currency translation impacts ($235 million).
LicensedTotal net revenues increased $1 billion, or 3%, over fiscal 2024, primarily due to higher revenues from company-operated stores revenue decreased $8 million, primarily driven by lower product and equipment sales to, and royalty revenues from, our licensees in our International segment ($69$979 million) and unfavorableother foreign currency translation impactsrevenues ($27$184 million), partially offset by highera productdecline and equipment sales to, and royaltyin revenues from,from ourlicensed licensees in our North America segmentstores ($80$155 million).
Company-operated store revenue increased $979 million, primarily driven by net new company-operated store growth of 5%, or 1,010 stores, over the past 12 months ($1.2 billion), prior to the 627 restructuring closures late in the fourth quarter of fiscal 2025, and incremental revenue from the conversion of 113 licensed stores to company-operated stores ($131 million) following the acquisition of 23.5 Degrees Topco Limited. Partially offsetting this increase was a 1% decline in comparable store sales ($408 million), attributable to a 2% decline in comparable transactions, partially offset by a 1% increase in average ticket, primarily due to annualization of prior year pricing.
Licensed stores revenue decreased $155 million, primarily driven by lower product and equipment sales to, and royalty revenues from, our licensees in our North America segment ($143 million), the impact of the acquisition of 23.5 Degrees Topco Limited ($36 million), and by unfavorable foreign currency translation impacts ($22 million). These decreases were partially offset by higher product sales to, and royalty revenues from, our licensees in our International segment ($79 million).
Other revenues decreasedincreased $95$184 million, primarily due to aan declineincrease in revenue in the Global Coffee Alliance ($125$99 million) followingand theincreased salesales of ourcocoa Seattle’s Best Coffee brandbutter to Nestléthird inparties the($66 second quarter of fiscal 2023 as well as product SKU optimization.million).
Product and distribution costs as a percentage of total net revenues decreasedincreased 8050 basis points, primarily due to the impact of increased sales from pricinginflation (approximately 70 basis points) and a reduction in supply chain costs (approximately 6080 basis points).
Store operating expenses as a percentage of total net revenues increased 140360 basis points. Store operating expenses as a percentage of company-operated store revenues increased 140410 basis points, primarily due to investments in store partner wages and benefitsdeleverage (approximately 170200 basis points), deleverageadditional labor (approximately 80160 basis points), and increased promotional activitymarketing (approximately 70 basis points), partially offset by in-store operational efficiencies (approximately 17090 basis points).
Other operating expenses increased $26$19 million, primarily due to support costs for our growing licensed markets.
General and administrative expenses increased $94 million, primarily due to the Leadership Experience 2025 ($81 million).
Restructuring and impairments were $892 million, largely due to costs associated with the closure of coffeehouses and simplification of our support organization. See Note 18, Restructuring, to the consolidated financial statements included in Item 8 of Part II of this 10-K, for further discussion.
Income from equity investees decreased $53.4 million, primarily due to lower income from our North American Coffee Partnership joint venture.
General and administrative expenses increased $82 million, primarily due to incremental investments in technology ($93 million), investments in partner wages and benefits ($90 million), and certain proxy solicitation and advisory services costs incurred in the second quarter of fiscal 2024 ($28 million). These increases were partially offset by lower performance-based compensation ($86 million) and the lapping of donations to The Starbucks Foundation made in fiscal 2023 ($30 million).
Gain from sale of assets includes the sale of our Seattle’s Best Coffee brand to Nestlé in the second quarter of fiscal 2023.
Interest income and other, net increaseddecreased $42$10 million, and interest expense increased $12 million, both primarily due to higherlower cash balances and lower interest rates in the current year.
Interest expense decreased $19 million, primarily due to savings from cross-currency interest rate hedging, partially offset by higher interest rates on refinanced long-term debt.
The effective tax rate for fiscal 20242025 was 24.3%25.9% compared to 23.6%24.3% for fiscal 2023.The2024.The increase was primarily due to lapping the releasediscrete impact of valuationchanges allowancesin recordedindefinite againstreinvestment assertions for certain deferredforeign tax assets of an international jurisdictionentities in the priorthird yearquarter of fiscal 2025 (approximately 80 basis points) and the accrual of foreign withholding taxes related to the current year earnings of certain foreign subsidiaries (approximately 60290 basis points), partially offset by electingthe andiscrete alternativeimpact of a tax approachstatus inchange for a certain foreign jurisdiction that resulted in a tax benefitentity in the secondfirst quarter of fiscal 20242025 (approximately 60120 basis points). See Note 14, Income Taxes, to the consolidated financial statements included in Item 8 of Part II of this 10-K, for further discussion.
North America total net revenues for fiscal 20242025 increased $440$364 million, or 2%,1%, primarily driven by net new company-operated store growth of 5%,4%, or 533441 stores,stores over the past 12 months ($788$980 million), andprior higherto productthe and584 equipmentrestructuring salesclosures to,late andin royaltythe revenuesfourth from,quarter ourof licenseesfiscal ($80 million).2025. This growth was partially offset by a 2% decline in comparable store sales ($420$419 million) driven by a 5%4% decreasedecline in comparable transactions, partially offset by a 4%2% increase in average ticket, primarily due to annualization of prior year pricing. Also contributing were lower product and equipment sales to, and royalty revenues from, our licensees ($143 million) and the impact of unfavorable foreign currency translation ($42 million).
North America operating income for fiscal 20242025 decreased 3%41% to $5.4$3.2 billion, compared to $5.5$5.4 billion in fiscal 2023.2024. Operating margin contracted 90830 basis points to 19.8%,11.5%, primarily duedriven to investments in store partner wages and benefits (approximately 150 basis points),by deleverage (approximately 150310 basis points), restructuring costs associated with the closure of coffeehouses and increasedsimplification promotionalof activityour support organization (approximately 100 basis points), partially offset by pricing (approximately 220240 basis points) and in-storeinvestments operationalin efficienciessupport of “Back to Starbucks,” which were largely in labor hours (approximately 150180 basis points).
International total net revenues for fiscal 20242025 decreasedincreased $149$481 million, or 2%,7%, primarily due to unfavorablenet foreignnew currencycompany-operated translationstore impactsgrowth of 5%, or 526 stores, over the past 12 months ($252$264 million), asand wellthe asincremental anet 4%revenue declinefrom inthe comparableconversion storeof sales113 licensed stores to company-operated stores ($210$95 million), drivenfollowing bythe aacquisition 4%of decline23.5 inDegrees averageTopco ticket.Limited during the first quarter of fiscal 2025. Also contributing to the declineincrease in international total net revenues were lowerhigher product and equipment sales to, and royalty revenues from, our licensees ($69$79 million), largely driven by continued disruptionsprimarily due to multiple international conflicts, partially offset by the performanceopening of 654378 net new licensed store openings over the past 12 months. These decreases were partially offset by net new company-operated store growth of 10%, or 893 stores, over the past 12 months ($378 million).
International operating income for fiscal 20242025 decreased 15%9% to $1.0$950 billion,million, compared to $1.2$1.0 billion in fiscal 2023.2024. Operating margin contracted 220210 basis pointspoints, to 14.2%,12.1% , primarily due to increased promotional activity (approximately 170 basis points) and investments in store partner wagesrestructuring and benefitsimpairment costs associated with the closure of coffeehouses and simplification of our support organization (approximately 120 basis points), partially offset by in-store operational efficiencies (approximately 100110 basis points).
Channel Development total net revenues for fiscal 20242025 decreasedincreased $124$102 million, or 7%,6%, compared to fiscal 2023,2024, primarily due to aan declineincrease in revenue in the Global Coffee Alliance ($125$99 million) following the sale of our Seattle’s Best Coffee brand to Nestlé in the second quarter of fiscal 2023 as well as product SKU optimization..
Channel Development operating income for fiscal 20242025 decreased 4% to $926$885 million, compared to $968$926 million in fiscal 2023.2024. Operating margin expandedcontracted 120500 basis points to 52.3%,47.3%, primarily duedriven toby mixa shift (approximately 350 basis points), strengthdecline in our North American Coffee Partnership joint venture income (approximately 120350 basis points), and lappinghigher impairmentglobal chargesproduct against certain manufacturing assets in the second quarter of fiscal 2023costs (approximately 90 basis points). These increases were partially offset by lapping the gain from the sale of our Seattle’s Best Coffee brand in the second quarter of fiscal 2023 (approximately 480 basis points).
Corporate and Other
Corporate and Other primarily consists of our unallocated corporate expenses.expenses and sales of cocoa butter to third parties. Unallocated corporate expenses include corporate administrative functions that support the operating segments but are not specifically attributable to or managed by any segment and are not included in the reported financial results of the operating segments.
Corporate and Other operating loss increased 7% to $2.1 billion for fiscal 2025 compared to $1.9 billion for fiscal 2024, largely due to costs associated with the restructuring of our support organization, primarily severance costs.
Corporate and Other operating loss increased to $1.9 billion for fiscal 2024, or 5%, compared to $1.8 billion in fiscal 2023. This increase was primarily driven by incremental investments in technology ($93 million), investments in partner wages and benefits ($57 million), and certain proxy solicitation and advisory services costs incurred in the second quarter of fiscal 2024 ($28 million). These increases were partially offset by lower performance-based compensation ($61 million) and the lapping of donations to The Starbucks Foundation made in fiscal 2023 ($30 million).
Our cash and investments were $3.8$3.7 billion and $4.2$3.8 billion as of September 28, 2025, and September 29, 2024, and October 1, 2023, respectively. We actively manage our cash and investments in order to internally fund operating needs, make scheduled interest and principal payments on our borrowings, fund acquisitions, and return cash to shareholders through common stock cash dividend payments and share repurchases. Our investment portfolio primarily includes highly liquid available-for-sale securities, including corporate debt securities,securities and U.S. government treasury securities (domestic and foreign), and commercial papersecurities, as well as principal-protected structured deposits. As of September 29,28, 2024,2025, approximately $2.1$1.6 billion of cash and short-term investments were held in foreign subsidiaries.
During the third quarter of fiscal 2025, we replaced our $3.0 billion unsecured five-year revolving credit facility (the “2021 credit facility”) with a new $3.0 billion unsecured five-year revolving credit facility (the “2025 credit facility”).
Our $3.0 billion unsecured five-year revolving2025 credit facility (the “2021 credit facility”),facility, of which $150.0 million may be used for issuances of letters of credit, is currently set to mature on SeptemberJune 16,13, 2026.2030. The 20212025 credit facility is available for working capital, capital expenditures, and other general corporate purposes, including acquisitions and share repurchases. We have the option, subject to negotiation and agreement with the related banks, to increase the maximum commitment amount by an additional $1.0 billion.
Borrowings under the 20212025 credit facility, which was most recently amended in April 2023,facility will bear interest at a variablefluctuating rate based on the Term SOFR,Secured Overnight Financing Rate (“Term SOFR”), and, for U.S. dollar-denominated loans under certain circumstances, a Base Rate (as defined in the 20212025 credit facility), in each case plus an applicable margin.rate. The applicable marginrate is based on the Company’s long-term credit ratings assigned by the Moody’s and Standard & Poor’s rating agencies. The 2025 credit facility contains alternative interest rate provisions specifying rate calculations to be used at such time Term SOFR ceases to be available as a benchmark due to reference rate reform. The “Base Rate” of interest is the highest of (i) the Federal Funds Rate (as defined in the 2021 credit facility) plus 0.500%,0.50%, (ii) Bank of America’s prime rate, and (iii) Term SOFR plus 1.000%.1.00% Termand SOFR(iv) means1.00%. Upon the forward-lookingoccurrence SOFRof termany event of default under the 2025 credit facility, interest on the outstanding amount of the indebtedness under the 2025 credit facility will bear interest at a rate administratedper annum equal to 2% in excess of the interest then borne by thesuch Chicago Mercantile Exchange plus a SOFR Adjustment of 0.100%.borrowings.
The 20212025 credit facility contains provisions requiring us to maintain compliance with certain covenants, including a minimum fixed charge coverage ratio, which measures our ability to cover financing expenses. As of September 29,28, 2024,2025, we were in compliance with all applicable covenants. No amounts were outstanding under our 2025 credit facility as of September 28, 2025, or our 2021 credit facility as of September 29, 2024, or October 1, 2023.2024.
Under our commercial paper program, we may issue unsecured commercial paper notes up to a maximum aggregate amount outstanding at any time of $3.0 billion, with individual maturities that may vary but not exceed 397 days from the date of issue. Amounts outstanding under the commercial paper program are required to be backstopped by available commitments under our 20212025 credit facility. The proceeds from borrowings under our commercial paper program may be used for working capital needs, capital expenditures, and other corporate purposes, including, but not limited to, business expansion, payment of cash dividends on our common stock and share repurchases. As of September 28, 2025, and September 29, 2024, and October 1, 2023, we had no amountsborrowings outstanding under our commercial paper program.
As of September 28, 2025 and September 29, 2024, we had no borrowings outstanding under these credit facilities. As of October 1, 2023, we had ¥5.0 billion, or $33.5 million, of borrowings outstanding under these credit facilities.
We regularly review our cash positions and our determination of partial indefinite reinvestment of foreign earnings. In the event we determine that all or another portion of such foreign earnings are no longer indefinitely reinvested, we may be subject to additional foreign withholding taxes, which could be material. Any foreign earnings that are not indefinitely reinvested may be repatriated at management’s discretion. During fiscal 2024,2025, we paidrevised our indefinite reinvestment assertions from prior years' cumulative earnings from certain foreign subsidiaries, and in the fourth quarter of fiscal 2025, we repatriated approximately $18$900 million forof cash from foreign subsidiaries, upon which approximately $90 million in related withholding taxes relatedwere recorded and paid. We continue to repatriatingbe indefinitely reinvested in the earningsremainder of certainour foreign subsidiaries. See Note 14, Income Taxes, to the consolidated financial statements included in Item 8 of Part II of this 10-K,earnings, for furtherwhich discussion.no tax accrual has been recorded.
On July 4, 2025, the President of the United States signed and enacted tax legislation into law through a reconciliation bill titled “An Act to provide for reconciliation pursuant to title II of H. Con. Res. 14,” commonly referred to as the “One Big Beautiful Bill Act.” This legislation was enacted during the fourth quarter of fiscal 2025; therefore, the fiscal 2025 accounting impacts from this tax law change are included in our fourth quarter of fiscal 2025 results. This tax law change did not result in a material impact to our consolidated financial statements. See Note 14, Income Taxes, to the consolidated financial statements included in Item 8 of Part II of this 10-K, for further discussion.
During the fiscal year ended October 1, 2023, we repurchased 10.0 million shares of common stock for $1.0 billion on the open market. During the fiscal year ended September 29, 2024, we repurchased 12.8 million shares of common stock for $1.3 billion on the open market. During the fiscal year ended September 28, 2025, we made no common stock share repurchases. As of September 29,28, 2024,2025, 29.8 million shares remained available for repurchase under current authorizations.
Other than normal operating expenses, cash requirements for fiscal 20252026 are expected to consist primarily of capital expenditures for investments in our new and existing stores, our supply chain, and corporate facilities. Total capital expenditures for fiscal 20252026 are expected to be reasonablymoderately consistentlower withthan fiscal 2024.2025.
Cash provided by operating activities was $6.1 billion for fiscal 2024, compared to $6.0 billion for fiscal 2023. The change was primarily due to an increase in net cash provided by changes in other operating assets and liabilities, primarily driven by net hedging activity, largely related to our coffee hedging program. See Note 3, Derivative Financial Instruments, to the consolidated financial statements included in Item 8 of Part II of this 10-K for further discussion. Also contributing were the change in operating lease liability driven by the timing of cash payment for rent, an increase in depreciation and amortization driven by capital additions, and higher distributions received from our North America Coffee Partnership. These increases were partially offset by lower net earnings during the period and higher inventory purchase costs, primarily driven by increased coffee commodity prices.
Cash usedprovided inby investingoperating activities was $2.7$4.7 billion for fiscal 2024,2025, compared to $2.3$6.1 billion for fiscal 2023.2024. The change was primarily due to increasedthe capitaldecrease expenditures,in net earnings of $1.9 billion and a net increase of $451.2 million in inventories, which was primarily driven by higher existinggreen and newroasted storecoffee, investmentslargely in North America, and lapping the proceeds from the prior year sale of Seattle’s Best Coffee branddue to Nestlé.elevated coffee prices. These increasesimpacts were partially offset by highera maturitiesnet increase of $713.2 million in loss on disposal, impairment, and callsaccelerated amortization of investments,assets primarily driven by maturitiesrestructuring costs as part of structuredthe deposits.“Back to Starbucks” strategy and a net increase in accounts payable, primarily due to payment timing.
Cash used in financinginvesting activities was $3.7$2.5 billion for fiscal 2024,2025, compared to $3.0$2.7 billion for fiscal 2023.2024. The change was primarily due to ana increasenet decrease in repaymentscapital expenditures of debt$472.0 million driven by a reduction in retail store investments and an increaserenovations in cashNorth returnedAmerica. toThese shareholdersincreases through dividends and share repurchases,were partially offset by anthe increase in net proceeds from issuancesacquisition of debt.23.5 Degrees Topco Limited.
Cash used in financing activities was $2.3 billion for fiscal 2025, compared to $3.7 billion for fiscal 2024. The change was primarily due to no current year share repurchases of our common stock compared to the prior year.
Commodity price risk represents our primary market risk, generated by our purchases of green coffee and dairy products, among other items. We purchase, roast, and sell high-quality arabica coffee and related products, and risk arises from the price volatility of green coffee. In addition to coffee, we also purchase significant amounts of dairy products to support the needs of our company-operated stores. The price and availability of these commoditiescommodities, including impacts from volatility in green coffee prices and new tariffs, directly impact our results of operations, and we expect commodity prices, particularly coffee, to continue to impact future results of operations. For additional details see Product Supply in Item 1 of Part I of this 10-K, as well as Risk Factors in Item 1A of Part I of this 10-K.
The following table summarizes the potential impact as of September 29,28, 2024,2025, to Starbucks future net earnings and other comprehensive income (“OCI”) from changes in commodity prices. The information provided below relates only to the derivative hedging instruments and does not represent the corresponding changes in the underlying hedged items (in millions):
The majority of our revenue, expense, and capital purchasing activities are transacted in U.S. dollars. However, because a portion of our operations consists of activities outside of the U.S., we have transactions in other currencies, primarily the Chinese renminbi, Japanese yen, Canadian dollar, British pound, South Korean won, and euro. To reduce cash flow volatility from foreign currency fluctuations, we enter into derivative instruments to hedge portions of cash flows of anticipated intercompany royalty payments, inventory purchases, intercompany borrowing, and lending activities, and certain other transactions in currencies other than the functional currency of the entity that entersis intoparty to the arrangements, as well as the translation risk of certain balance sheet items.items and net investments in foreign operations. The volatility in the foreign exchange market may lead to significant fluctuation in foreign currency exchange rates and adversely impact our financial results in the case of weakening foreign currencies relative to the U.S. dollar.
The following table summarizes the potential impact as of September 29,28, 2024,2025, to Starbucks future net earnings and other comprehensive income from changes in the fair value of these derivative financial instruments due to a change in the value of the U.S. dollar as compared to foreign exchange rates. The information provided below relates only to the derivative hedging instruments and does not represent the corresponding changes in the underlying hedged items (in millions):
We utilize short-term and long-term financing and may use interest rate hedges to manage our overall interest expense related to our existing fixed-rate debt, as well as to hedge the variability in cash flows due to changes in benchmark interest rates related to anticipated debt issuances. See Note 3, Derivative Financial InstrumentsInstruments, and Note 9, Debt, to the consolidated financial statements included in Item 8 of Part II of this 10-K for further discussion of our interest rate hedge agreements and details of the components of our long-term debt, respectively, as of September 29,28, 2024.2025.
What changed in the latest 10-Q
Risk Factors
In addition to the other information set forth in this 10-Q, you should carefully consider the risks and uncertainties discussed in Part I, Item 1A. Risk Factors in our 10-K. There have been no material changes to the risk factors disclosed in our 10-K.
No wording changes found in this section.
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Management's Discussion & Analysis (MD&A)
New heading “Divestiture of Starbucks Retail Operations in China”
New heading “Strategic Initiatives”
Largest changes
Starbucks results for thesee in full comparisonsecondthird quarter of fiscal 2026 showed continued progress and momentum on key “Back to Starbucks” initiatives, as demonstrated throughmeaningfulcontinuedrevenueglobalgrowth.comparable store sales growth, consolidated operating margin expansion, and improved customer engagement. Theseinvestmentsinitiatives included the Green Apron Service standard to improve operational consistency and the coffeehouse experience, engaging consumer marketing, disciplined menu innovation,anda redesigned Starbucks Rewards program, and coffeehouse uplifts, all of which are intended to deliver greater connection, consistency, and value for customers. During thesecondthird quarter of fiscal 2026, consolidated net revenuesincreaseddecreased9%1% to $9.3 billion compared to $9.5 billioncompared to $8.8 billionin thesecondthird quarter of fiscal 2025, primarily due to the conversion of Starbucks retail operations in China to our licensed joint venture model in the third quarter of fiscal 2026. The decline in consolidated revenues was offset by a6.2%7.9% increase in global comparable store sales, driven by a7.1%7.9% increase in the U.S.market and a 2.6% increase internationally.market. Also contributing to theincreaseoffset was higher revenues fromtheourGlobal Coffee Alliance and ourinternational licensed store business. Specific to the U.S. market, the increase in comparable store sales was driven by a4.3%4.2% increase in comparable transactions and a2.7%3.6% increase in average ticket, primarily driven by higher delivery sales and strength inthecustomercurrentfoodyear.attach and beverage modifications. Consolidated operating margin expanded18060 basis points from the prior year to8.7%,10.5%, primarily driven by sales leverage and lowerstoreinflationoperatingpairedandwithdepreciationtariffand amortization costs after classifying assets for Starbucks retail operations in China as held for sale, partiallyrefunds, offset by higher restructuring costs and labor investments largely in support of “Back to Starbucks.”
• inherent risks of operating a global business, including changing conditions in our markets; local factors affecting store openings; protectionist trade or foreign investment policies,see in full comparisonsuchincludingastradetariffsrestrictions,andtariffs, quotas, import/exportregulations;regulations,economiccustomsorrestrictions,tradesanctions,sanctionscountersanctions, and retaliatory measures; compliance with local laws and other regulations; and local labor policies and conditions, including labor strikes and work stoppages;
North America operating income for thesee in full comparisonfirstthirdtwo quartersquarter of fiscal 2026decreasedincreased20%10% to$1.5$1.0 billion, compared to$1.9$919billionmillion in thefirstthirdtwo quartersquarter of fiscal 2025. Operating margincontractedexpanded33030 basis points to11%,13.6%, primarily driven by sales leverage (approximately 340 basis points), lapping of the Leadership Experience 2025 (approximately 120 basis points), and lower inflation paired with tariff refunds (approximately 110 basis points). This was partially offset by higher restructuring costs (approximately 240 basis points), labor investments largely in support of “Back to Starbucks” (approximately260190 basis points), inflationary pressures (approximately 120 basis points), primarily driven by tariffs and elevated coffee pricing,and product mix shift (40approximatelybasis points), partially offset by sales leverage (180100 basis points).
“North America operating income for the second quarter of fiscal 2026 decreased 9% to $680 million, compared to $748 million in the second quarter of fiscal 2025. Operating margin contracted 170 basis points to 10%, primarily driven by labor investments largely in support of “Back to Starbucks,” (approximately 260 basis points), product mix shift (90 basis points) and inflationary pressures (approximately 90 basis points), primarily driven by tariffs and elevated coffee pricing, partially offset by sales leverage (370 basis points).”see in full comparison
Product and distribution costs as a percentage of total net revenuessee in full comparisonincreaseddecreased250100 basis points for thesecondthird quarter of fiscal 2026,largelyprimarily due tomixtheshiftconversion(90ofbasisStarbuckspoints)retailandoperationsinflationaryinpressuresChina to our licensed joint venture model in the third quarter of fiscal 2026 (approximately90130 basis points),primarilylowerdriveninflation paired with tariff refunds (approximately 80 basis points), partially offset byelevatedmixcoffeeshiftpricing(approximatelyand110tariffs.basis points).
As the fiscal year progresses, we will continue to refine and execute our “Back to Starbucks” initiatives tosee in full comparisoncontinuedrive topline momentum and build sales leverage while investing in our cafes and customer experience, with a focus on delivering exceptional service with speed, providing seamless digital experiences, strengthening our supply chain, and enabling technological efficiencies. We will continue to amplify our brand, engaging with our customers authentically and distinctly as Starbucks, through broad-based marketing, menu innovation, and Starbucks Rewards engagement, with the goal of deepening customer connection, brand loyalty and affinity.As our international business shifts toward a more predominantly licensed model, we will look toward strengthening how we support our licensed business partners. Our approach will strive to bring decision-making closer to customers and local markets, while enabling us to focus on establishing standards and best practices. We expect certain macroeconomic pressures to alleviate in the second half of the fiscal year, including impacts on product and distribution costs from tariffs and elevated coffee pricing. While we believe we are making the right strategic investments to improve our operating foundations, our focus going forward will be on driving consistency at scale while balancing and maintaining a healthier cost structure. We will continue to test, learn, and refine our approach to deliver the best of Starbucks to drive durable, profitable, long-term growth.
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• the costs and risks associated with, and the successful and timely execution and effects of, our existing and any future business opportunities, expansions, initiatives, strategies, investments, transformation efforts, and plans, including our “Back to Starbucks” strategy and our restructuring planplans;
• inherent risks of operating a global business, including changing conditions in our markets; local factors affecting store openings; protectionist trade or foreign investment policies, suchincluding astrade tariffsrestrictions, andtariffs, quotas, import/export regulations;regulations, economiccustoms orrestrictions, tradesanctions, sanctionscountersanctions, and retaliatory measures; compliance with local laws and other regulations; and local labor policies and conditions, including labor strikes and work stoppages;
• higher costs, lower quality, or unavailability of coffee, dairy, cocoa, energy, water, raw materials, packaging, or product ingredients and related volatility;
• evolving corporate governance and public disclosure regulations and expectationsexpectations, including with respect to sustainability matters;
• failure to comply with applicable laws and complex and changing legal and regulatory requirements, including inthose privacygoverning privacy, data protection, artificial intelligence, and dataother protectionemerging technologies;
• the unauthorized access, use, theft, or destruction of our data, or of our proprietary or confidential informationinformation, including as a result of increasingly sophisticated threats enabled or accelerated by artificial intelligence, and the impact thereof;
• potential negative effects of, and our ability to respond to, a material failure, inadequacy, or interruption of our information technology systems or digital platforms, or those of our third-party business partners or service providers, or failure to comply with data protection laws; and
Starbucks is the premier roaster, marketer, and retailer of specialty coffee globally, with a presence in 90 markets worldwide. As of MarchJune 29,28, 2026, Starbucks had more than 41,000 company-operated and licensed stores, an increase of 1% from the prior year. Additionally, we sell a variety of consumer-packaged goods, primarily through the Global Coffee Alliance established with Nestlé and other partnerships and joint ventures.
Starbucks results for the secondthird quarter of fiscal 2026 showed continued progress and momentum on key “Back to Starbucks” initiatives, as demonstrated through meaningfulcontinued revenueglobal growth.comparable store sales growth, consolidated operating margin expansion, and improved customer engagement. These investmentsinitiatives included the Green Apron Service standard to improve operational consistency and the coffeehouse experience, engaging consumer marketing, disciplined menu innovation, and a redesigned Starbucks Rewards program, and coffeehouse uplifts, all of which are intended to deliver greater connection, consistency, and value for customers. During the secondthird quarter of fiscal 2026, consolidated net revenues increaseddecreased 9%1% to $9.3 billion compared to $9.5 billion compared to $8.8 billion in the secondthird quarter of fiscal 2025, primarily due to the conversion of Starbucks retail operations in China to our licensed joint venture model in the third quarter of fiscal 2026. The decline in consolidated revenues was offset by a 6.2%7.9% increase in global comparable store sales, driven by a 7.1%7.9% increase in the U.S. market and a 2.6% increase internationally.market. Also contributing to the increaseoffset was higher revenues from theour Global Coffee Alliance and ourinternational licensed store business. Specific to the U.S. market, the increase in comparable store sales was driven by a 4.3%4.2% increase in comparable transactions and a 2.7%3.6% increase in average ticket, primarily driven by higher delivery sales and strength in thecustomer currentfood year.attach and beverage modifications. Consolidated operating margin expanded 18060 basis points from the prior year to 8.7%,10.5%, primarily driven by sales leverage and lower storeinflation operatingpaired andwith depreciationtariff and amortization costs after classifying assets for Starbucks retail operations in China as held for sale, partiallyrefunds, offset by higher restructuring costs and labor investments largely in support of “Back to Starbucks.”
Divestiture of Starbucks Retail Operations in China
In the first quarter of fiscal 2026, we announced that the Company entered into an agreement to form a joint venture with Boyu Capital to operate Starbucks retail in China (the “disposal group”), marking a significant milestone in the Company’s long-term strategy to unlock sustainable, disciplined growth in one of the Company’s critical growth markets.
In the third quarter of fiscal 2026, the transaction closed, and under the terms of the agreement, funds managed by Boyu Capital acquired a 60% stake in Starbucks China retail operations, while Starbucks retained a 40% ownership interest and continues to own and license the brand and intellectual property to the joint venture. The disposal group was deconsolidated from our financial statements and we transitioned from recording revenues and expenses of the disposal group to recording our share of income from the joint venture, recognized as income from equity investees under the equity method of accounting. We expect that the conversion to our licensed joint venture model will continue to drive lower revenues and higher operating margin for Starbucks, as compared to the historical, company-operated model.
We used a portion of our transaction proceeds for debt reduction, strengthening our balance sheet and allowing us to execute our long-term growth strategy with greater financial flexibility. The joint venture is expected to reinvigorate sustainable growth in China through a focus on expansion, innovation and elevated customer experiences, with a shared long-term aspiration to grow to as many as 20,000 locations in China over time. By bringing together the trusted Starbucks brand, and Boyu Capital’s deep local expertise, we believe we will be able to serve more customers, enter more cities, strengthen profitability, and better compete in China’s dynamic and evolving market.
Restructuring
In support of our “Back to Starbucks” strategy, as part of the restructuring plan announced in the fourth quarter of fiscal 2025, we continued to closeclosed stores that did not demonstrate a viable path to profitability or meet our standards of delivering a warm, welcoming space for our customers and partners. Those store closures in North America were substantially completed in fiscal 2025, and the majority of those International store closures were completed in the first quarter of fiscal 2026. With a healthier base of coffeehouses, we expect meaningful opportunity for disciplined growth. We anticipate that these actions, along with our simplified broader support organization, will allow us to restructure, redeploy, and refocus our resources on priorities that we believe will deliver long-term sustainable business growth.
In the third quarter of fiscal 2026, we announced an additional fiscal 2026 restructuring plan focused on further transformation of our global support organization and non-retail facilities, as well as reducing the future operational complexity of our Starbucks Reserve and Roastery locations resulting in a reassessment and impairment of the associated asset group. Under the plan, the Company expects to capture cost savings through a more streamlined support structure, and a simplified operating model for Starbucks Reserve and Roastery locations.
Strategic Initiatives
As the fiscal year progresses, we will continue to refine and execute our “Back to Starbucks” initiatives to continuedrive topline momentum and build sales leverage while investing in our cafes and customer experience, with a focus on delivering exceptional service with speed, providing seamless digital experiences, strengthening our supply chain, and enabling technological efficiencies. We will continue to amplify our brand, engaging with our customers authentically and distinctly as Starbucks, through broad-based marketing, menu innovation, and Starbucks Rewards engagement, with the goal of deepening customer connection, brand loyalty and affinity. As our international business shifts toward a more predominantly licensed model, we will look toward strengthening how we support our licensed business partners. Our approach will strive to bring decision-making closer to customers and local markets, while enabling us to focus on establishing standards and best practices. We expect certain macroeconomic pressures to alleviate in the second half of the fiscal year, including impacts on product and distribution costs from tariffs and elevated coffee pricing. While we believe we are making the right strategic investments to improve our operating foundations, our focus going forward will be on driving consistency at scale while balancing and maintaining a healthier cost structure. We will continue to test, learn, and refine our approach to deliver the best of Starbucks to drive durable, profitable, long-term growth.
As our international business shifts toward a more predominantly licensed model, we will continue evolving how we support our licensed business partners. We expect our international business to be a meaningful contributor to coffeehouse growth over time, supported by our licensed business model and significant opportunities for development in markets globally. We will apply continued discipline to how we grow our global footprint, with a focus on ensuring new coffeehouses meet our expectations for returns and long-term growth.
We expect certain macroeconomic pressures to continue easing into the fourth quarter, including impacts on product and distribution costs from tariffs and elevated coffee pricing. While we believe we are making the right strategic investments to improve our operating foundations, our focus going forward will be on driving consistency at scale while balancing and maintaining a healthier cost structure. We will continue to test, learn, and refine our approach to deliver the best of Starbucks to drive durable, profitable, long-term growth.
In November, we announced that the Company entered into an agreement to form a joint venture with Boyu Capital to operate Starbucks retail in China (the “disposal group”), marking a significant milestone in the Company’s long-term strategy to unlock sustainable, disciplined growth in one of the Company’s critical growth markets.
During the first quarter of fiscal 2026, we classified the assets and liabilities of the disposal group as held for sale on the consolidated balance sheets and the disposal group remained classified as held for sale as of March 29, 2026. The classification required us to cease property, plant, and equipment depreciation and operating lease ROU asset amortization of the related long-lived assets, resulting in reduced depreciation and amortization and store operating expenses, which were reflected through the close of the transaction. We also changed our indefinite reinvestment assertions upon classification as held for sale resulting in an increase in our income tax expense.
On March 30, 2026, in the third quarter of fiscal 2026, the transaction subsequently closed, and under the terms of the agreement, funds managed by Boyu Capital acquired a 60% stake in Starbucks China retail operations, while Starbucks retained a 40% ownership interest and continues to own and license the brand and intellectual property to the joint venture. The joint venture oversees 7,991 company-operated coffeehouses, which transitioned to a licensed operating model, with a shared long-term aspiration to grow to as many as 20,000 locations over time.
Further, Starbucks and Boyu Capital transitioned into the operational phase of the joint venture, with a focus on expansion, innovation, and delivering exceptional coffee and welcoming experiences to customers across China. We transitioned from recording revenues and expenses of the disposal group to recording our share of income from the joint venture, recognized as income from equity investees under the equity method of accounting. This transition will result in lower revenues and higher operating margin for Starbucks beginning in the third quarter of fiscal 2026, as compared to the historical, company-operated model. The disposal group was deconsolidated from our financial statements and will be reported as part of our licensed portfolio in the third quarter.
We currently plan to use our transaction proceeds for debt reduction, strengthening our balance sheet and allowing us to execute our long-term growth strategy with greater financial flexibility. By bringing together the trusted Starbucks brand, and Boyu Capital’s deep local expertise, we believe we will be able to serve more customers, enter more cities, strengthen profitability, and better compete in China’s dynamic and evolving market.
Total net revenues for the second quarter of fiscal 2026 increased $770 million, primarily due to higher revenues from company-operated stores ($531 million) and other revenues ($166 million).
Company-operated stores revenue increased $531 million, primarily driven by a 6.2% increase in comparable store sales ($433 million) attributable to a 3.8% increase in comparable transactions and a 2.3% increase in average ticket. Also contributing to the overall increase in company-operated stores revenue were incremental revenues from 52 net-new company-operated stores over the past 12 months ($50 million).
Licensed stores revenue increased $72 million, primarily driven by higher product sales to, and royalty revenues from, our licensees ($86 million), partially offset by lower equipment sales to licensees ($15 million).
Other revenues increased $166 million, primarily due to an increase in revenue in the Global Coffee Alliance ($149 million).
Total net revenues for the firstthird two quartersquarter of fiscal 2026 increaseddecreased $1.3$133 billion,million, primarily due to higherlower revenues from company-operated stores ($934$306 million) partially offset by higher licensed stores ($95 million) and other revenues ($286$78 million).
Company-operated stores revenue increaseddecreased $934$306 million, primarily driven by the conversion of Starbucks retail operations in China to our licensed joint venture model in the third quarter of fiscal 2026 ($776 million) and unfavorable foreign currency impacts ($52 million). This was partially offset by a 5.0%7.9% increase in comparable store sales ($726$524 million) attributable to a 3.3%4.2% increase in comparable transactions and a 1.7%3.5% increase in average ticket. Also contributing to the overall increase in company-operated stores revenue were incremental revenues from 52 net-new company-operated stores over the past 12 months ($149 million).
Licensed stores revenue increased $67$95 million, primarily driven by higher product sales to, and royalty revenues from, our existing licensees ($58 million) and our newly-formed China joint venture ($53 million) following the conversion of Starbucks retail operations in China to our International segment ($132 million). The increase in licensed storesjoint revenueventure wasmodel, partially offset by lower equipment sales to our licensees globally ($36 million) and a decrease in product sales to, and royalty revenues from, our licensees in our North America segment ($29$16 million).
Other revenues increased $286$78 million, primarily due to an increase in revenue in the Global Coffee Alliance ($222 million) and increased sales of cocoa butter to third parties ($34$89 million).
Total net revenues for the first three quarters of fiscal 2026 increased $1.2 billion, primarily due to higher revenues from company-operated stores ($628 million), other revenues ($364 million), and licensed stores ($162 million).
Company-operated stores revenue increased $628 million, primarily driven by a 5.9% increase in comparable store sales ($1.2 billion) attributable to a 3.6% increase in comparable transactions and a 2.3% increase in average ticket. This was partially offset by the conversion of Starbucks retail operations in China to our licensed joint venture model in the third quarter of fiscal 2026 ($729 million).
Licensed stores revenue increased $162 million, primarily driven by higher product sales to, and royalty revenues from, our existing licensees in our International segment ($182 million) and our newly-formed China joint venture ($53 million) following the conversion of Starbucks retail operations in China to our licensed joint venture model. This was partially offset by lower equipment sales to our licensees globally ($52 million) and a decrease in product sales to, and royalty revenues from, our licensees in our North America segment ($21 million).
Other revenues increased $364 million, primarily due to an increase in revenue in the Global Coffee Alliance ($311 million).
Product and distribution costs as a percentage of total net revenues increaseddecreased 250100 basis points for the secondthird quarter of fiscal 2026, largelyprimarily due to mixthe shiftconversion (90of basisStarbucks points)retail andoperations inflationaryin pressuresChina to our licensed joint venture model in the third quarter of fiscal 2026 (approximately 90130 basis points), primarilylower driveninflation paired with tariff refunds (approximately 80 basis points), partially offset by elevatedmix coffeeshift pricing(approximately and110 tariffs.basis points).
Store operating expenses as a percentage of total net revenues decreased 140 basis points for the second quarter of fiscal 2026. Store operating expenses as a percentage of company-operated stores revenue decreased 90 basis points, primarily due to sales leverage (330 basis points), partially offset by labor investments largely in support of “Back to Starbucks” (approximately 230 basis points).
Other operating expenses decreased $8 million, primarily due to savings from simplifying our licensed business support organization ($16 million).
Depreciation and amortization expenses as a percentage of total net revenues decreased 100 basis points, primarily as a result of ceasing depreciation upon classifying our Starbucks retail operations in China as held for sale.
General and administrative expenses decreased $14 million, primarily due to restructuring-related savings ($44 million), partially offset by increases in performance-based compensation ($27 million).
Restructuring and impairments decreased $91 million, largely due to lapping costs associated with the simplification of our support organization in the prior year. See Note 17, Restructuring, to the consolidated financial statements included in Item 1 of Part I of this 10-Q for further discussion.
Income from equity investees decreased $8 million, primarily due to income from our North American Coffee Partnership joint venture.
The combination of these changes resulted in an overall increase in operating margin of 180 basis points for the second quarter of fiscal 2026.
Product and distribution costs as a percentage of total net revenues increased 230 basis points for the first two quarters of fiscal 2026, largely due to inflationary pressures (approximately 120 basis points), primarily driven by elevated coffee pricing and tariffs, and mix shift (70 basis points).
Store operating expenses as a percentage of total net revenues wasdecreased flat90 basis points for the firstthird two quartersquarter of fiscal 2026. Store operating expenses as a percentage of company-operated stores revenue increased 4030 basis points, primarily due to labor investments largely in support of “Back to Starbucks” (approximately 230190 basis points), and increased reserves for self-insured claims (approximately 100 basis points), partially offset by sales leverage (approximately 240250 basis points).
Depreciation and amortization expenses as a percentage of total net revenues decreased 60 basis points, primarily asdriven aby resultthe conversion of ceasing depreciation upon classifying our Starbucks retail operations in China asto heldour forlicensed sale.joint venture model in the third quarter of fiscal 2026.
General and administrative expenses decreased $41$78 million, largelyprimarily due to lapping of the Leadership Experience 2025 ($81 million), restructuring-related savings ($111$63 million), and the conversion of Starbucks retail operations in China to our licensed joint venture model in the third quarter of fiscal 2026 ($42 million). This was partially offset by increases in performance-based compensation ($27$79 million) and transaction-related expenses related to the strategicconversion partnership with Boyu Capital to operateof Starbucks retail operations in China to our licensed joint venture model in the third quarter of fiscal 2026 ($30$44 million).
Restructuring and impairments decreasedincreased $3$282 million, largely due to lapping costs associated with the simplificationimpairment of ourStarbucks supportReserve organizationand inRoastery thestore priorlocations, year,and partiallypartner offsetseverance by costs associated with the closure of coffeehouses in the current year.costs. See Note 17, Restructuring,Restructuring and Impairments, to the consolidated financial statements included in Item 1 of Part I of this 10-Q,10-Q for further discussion.
Income from equity investees increased $6$22 million, primarily due to income from our North American Coffee PartnershipChina joint venture.venture, which was formed upon the conversion of Starbucks retail operations in China to our licensed joint venture model in the third quarter of fiscal 2026.
The combination of these changes resulted in an overall decreaseincrease in operating margin of 7060 basis points for the firstthird two quartersquarter of fiscal 2026.
Product and distribution costs as a percentage of total net revenues increased 130 basis points for the first three quarters of fiscal 2026 largely due to mix shift (80 basis points).
Store operating expenses as a percentage of total net revenues decreased 40 basis points for the first three quarters of fiscal 2026. Store operating expenses as a percentage of company-operated stores revenue increased 40 basis points, primarily due to labor investments largely in support of “Back to Starbucks” (approximately 220 basis points), and increased reserves for self- insured claims (approximately 60 basis points), offset by sales leverage (approximately 300 basis points).
Other operating expenses decreased $49 million, primarily due to savings from simplifying our licensed business support organization ($45 million).
Depreciation and amortization expenses as a percentage of total net revenues decreased 60 basis points, primarily driven by ceasing depreciation upon classifying our Starbucks retail operations in China as held for sale in the first quarter of fiscal 2026 and converting Starbucks retail operations in China to our licensed joint venture model in the third quarter of fiscal 2026.
General and administrative expenses decreased $120 million, largely due to restructuring-related savings ($174 million) and lapping of the Leadership Experience 2025 ($81 million) and the conversion of Starbucks retail operations in China to our licensed joint venture model in the third quarter of fiscal 2026 ($42 million). This was partially offset by increases in performance-based compensation ($112 million) and transaction-related expenses related to the conversion of Starbucks retail operations in China to our licensed joint venture model in the third quarter of fiscal 2026 ($74 million).
Restructuring and impairments increased $279 million, largely due to costs associated with the impairment of Starbucks Reserve and Roastery store locations, and partner severance costs. See Note 17, Restructuring and Impairments, to the consolidated financial statements included in Item 1 of Part I of this 10-Q, for further discussion.
Income from equity investees increased $27 million, primarily due to income from our China joint venture, which was formed upon the conversion of Starbucks retail operations in China to our licensed joint venture model in the third quarter of fiscal 2026.
The combination of these changes resulted in an overall decrease in operating margin of 20 basis points for the first three quarters of fiscal 2026.
SBUX insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 9 filings (2 insiders, 9 trade dates, 15,374 shares, about $1.6M; 9 of these filings say the sales were made under a Rule 10b5-1 trading plan). Net open-market shares: -15,374 (purchases minus sales); net value about -$1.6M.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-10-05 | Brewer Brady |
Open-market sale |
1,641 | $94.76 | $155.5K |
| 2026-09-15 | Kelly Sara |
Shares withheld for tax | 1,454 | $96.58 | $140.4K |
| 2026-09-09 | Niccol Brian R |
Shares withheld for tax | 56,267 | $100.04 | $5.6M |
| 2026-09-04 | Brewer Brady |
Open-market sale |
2,229 | $105.60 | $235.4K |
| 2026-08-05 | Brewer Brady |
Open-market sale |
2,229 | $105.99 | $236.3K |
| 2026-07-06 | Brewer Brady |
Open-market sale |
2,229 | $104.00 | $231.8K |
| 2026-06-15 | Kelly Sara |
Shares withheld for tax | 316 | $101.59 | $32.1K |
| 2026-06-11 | Brewer Brady |
Open-market sale |
588 | $100.00 | $58.8K |
| 2026-06-05 | Brewer Brady |
Open-market sale |
1,641 | $94.33 | $154.8K |
| 2026-05-05 | Brewer Brady |
Open-market sale |
2,229 | $104.81 | $233.6K |
| 2026-04-29 | Kelly Sara |
Open-market sale |
2,000 | $105.00 | $210.0K |
| 2026-04-17 | Brewer Brady |
Open-market sale |
588 | $100.00 | $58.8K |
Well-known investors holding SBUX (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Polen Capital Management | 2026-06-30 | 3,550,773 | $362.9M | 3.13% | Reduced 30% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 1,503,418 | $153.6M | 0.09% | Added 78% |
| Markel Group (Tom Gayner) | 2026-06-30 | 623,818 | $63.7M | 0.49% | No change |
| Baillie Gifford | 2026-06-30 | 548,926 | $56.1M | 0.05% | Reduced 12% |
| D. E. Shaw & Co. | 2026-06-30 | 342,235 | $35.0M | 0.02% | Added 19% |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 240,509 | $24.6M | 0.01% | Added 45% |
| Gotham Asset Management (Joel Greenblatt) | 2026-06-30 | 85,061 | $8.7M | 0.02% | Added 82% |
| Millennium Management (Israel Englander) | 2026-06-30 | 76,375 | $7.8M | 0.01% | Reduced 85% |
| Bridgewater Associates | 2026-06-30 | 66,482 | $6.8M | 0.03% | Added 1% |
| Semper Augustus (Chris Bloomstran) | 2026-06-30 | 45,761 | $4.7M | 0.53% | Reduced 82% |
| First Eagle Investment Management | 2026-06-30 | 17,002 | $1.7M | 0.0% | Added 4% |