STARBUCKS CORP - Quarter Report: 2025 March (Form 10-Q)

) )) )) ) ) )) ) ) ))))) )

See Notes to Consolidated Financial Statements.

Table of Contents

STARBUCKS CORPORATION

CONSOLIDATED STATEMENTS OF EQUITY

For the Quarter Ended March 30, 2025 and March 31, 2024

(in millions, except per share data, unaudited)

Common Stock

Additional Paid-in Capital

Retained
Earnings/(Deficit)

Accumulated
Other
Comprehensive
Income/(Loss)

Shareholders’
Equity/(Deficit)

Noncontrolling
Interests

Total

Amount

Balance, December 29, 2024

()

Net earnings

—

()

Other comprehensive income

—

Stock-based compensation expense

—

Exercise of stock options/vesting of RSUs

Sale of common stock

Cash dividends declared, $ per share

—

()

Other

—

Balance, March 30, 2025

()

Balance, December 31, 2023

()

Net earnings

—

Other comprehensive loss

—

()

Stock-based compensation expense

—

Exercise of stock options/vesting of RSUs

Sale of common stock

Repurchase of common stock (1)

Cash dividends declared, $ per share

—

()

Other

—

()

Balance, March 31, 2024

()

(1)Includes excise tax on share repurchases.

See Notes to Consolidated Financial Statements.

Table of Contents

STARBUCKS CORPORATION

CONSOLIDATED STATEMENTS OF EQUITY

For the Two Quarters Ended March 30, 2025 and March 31, 2024

(in millions, except per share data, unaudited)

Common Stock

Additional Paid-in Capital

Retained
Earnings/(Deficit)

Accumulated
Other
Comprehensive
Income/(Loss)

Shareholders’
Equity/(Deficit)

Noncontrolling
Interests

Total

Amount

Balance, September 29, 2024

()

Net earnings

—

Other comprehensive loss

—

()

Stock-based compensation expense

—

Exercise of stock options/vesting of RSUs

()

Sale of common stock

Cash dividends declared, $ per share

—

()

Other

—

()

Balance, March 30, 2025

()

Balance, October 1, 2023

()

$()$ $()Product and distribution costs )() ()Product and distribution costs) Product and distribution costs ()()Interest expense Interest expense )() ()Product and distribution costs Product and distribution costs ()()Interest expense Interest expense ()

(1) Gains and losses recognized in earnings relate to components excluded from the assessment of effectiveness.

$ $ $ Foreign currency - otherInterest income and other, net() Diesel fuel and other commoditiesInterest income and other, net() ()()Fair Value Hedges:

Interest rate swaps

Interest expense ()() Long-term debt (hedged item)Interest expense() ()

Table of Contents

$ Cross-currency swaps Dairy Diesel fuel and other commodities Foreign currency - other Interest rate swaps $ Other long-term assets DairyPrepaid expenses and other current assets Foreign currency - otherPrepaid expenses and other current assets Other long-term assets Non-designated Derivative Instruments:DairyPrepaid expenses and other current assets Diesel fuel and other commoditiesPrepaid expenses and other current assets Foreign currencyPrepaid expenses and other current assets Derivative LiabilitiesBalance Sheet LocationMar 30, 2025Sep 29, 2024Designated Derivative Instruments:Cross-currency swapsAccrued liabilities$ $ Other long-term liabilities DairyAccrued liabilities Foreign currency - otherAccrued liabilities Other long-term liabilities Interest rate swapsOther long-term liabilities Non-designated Derivative Instruments:Diesel fuel and other commoditiesAccrued liabilities Foreign currencyAccrued liabilities Other long-term liabilities

(1) We also hold cash and cash equivalents from various settled-to-market exchange traded futures related to coffee and dairy hedging.

$ $()$()

Additional disclosures related to cash flow gains and losses included in AOCI, as well as subsequent reclassifications to earnings, are included in Note 11, Equity.

Table of Contents

Note 4:

$ $ $ Short-term investments:Available-for-sale debt securities:Corporate debt securities U.S. government treasury securities Total available-for-sale debt securities Structured deposits Marketable equity securities Total short-term investments Prepaid expenses and other current assets:Derivative assets Long-term investments:Available-for-sale debt securities:Corporate debt securities Mortgage and other asset-backed securities State and local government obligations U.S. government treasury securities Total available-for-sale debt securities Total long-term investments Other long-term assets:Derivative assets Total assets$ $ $ $ Liabilities:Accrued liabilities:Derivative liabilities$ $ $ $ Other long-term liabilities:Derivative liabilities Total liabilities$ $ $ $

Table of Contents

$ $ $ Short-term investments:Available-for-sale debt securities:Corporate debt securities Foreign corporate bonds Mortgage and other asset-backed securities State and local government obligations U.S. government treasury securities Total available-for-sale debt securities Structured deposits Marketable equity securities Total short-term investments Prepaid expenses and other current assets:Derivative assets Long-term investments:Available-for-sale debt securities:Corporate debt securities Mortgage and other asset-backed securities State and local government obligations U.S. government treasury securities Total available-for-sale debt securities Structured deposits Total long-term investmentsOther long-term assets:Derivative assets Total assets$ $ $ $ Liabilities:Accrued liabilities:Derivative liabilities$ $ $ $ Other long-term liabilities:Derivative liabilities Total liabilities$ $ $ $

There were no material transfers between levels, and there was no significant activity within Level 3 instruments during the periods presented. The fair values of any financial instruments presented above exclude the impact of netting assets and liabilities when a legally enforceable master netting agreement exists.

Gross unrealized holding gains and losses on available-for-sale debt securities, structured deposits, and marketable equity securities were not material as of March 30, 2025 and September 29, 2024.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Assets and liabilities recognized or disclosed at fair value on the consolidated financial statements on a nonrecurring basis include items such as property, plant and equipment, right-of-use assets, goodwill and other intangible assets, equity and other investments, and other assets. These assets are measured at fair value if determined to be impaired.

Table of Contents

Note 5: $ Roasted

Other merchandise held for sale (1)

Packaging and other supplies Total$ $

As of March 30, 2025, we had committed to purchasing green coffee totaling $ million under fixed-price contracts and an estimated $ million under price-to-be-fixed contracts. A portion of our price-to-be-fixed contracts are effectively fixed through the use of futures. See Note 3, Derivative Financial Instruments, for further discussion. Price-to-be-fixed contracts are purchase commitments whereby the quality, quantity, delivery period, and other negotiated terms are agreed upon, but the date, and therefore the price, at which the base “C” coffee commodity price component will be fixed has not yet been established. For most contracts, either Starbucks or the seller has the option to “fix” the base “C” coffee commodity price prior to the delivery date. For other contracts, Starbucks and the seller may agree upon pricing parameters determined by the base “C” coffee commodity price. Until prices are fixed, we estimate the total cost of these purchase commitments. We believe, based on established relationships with our suppliers and continuous monitoring, the risk of non-delivery on these purchase commitments is remote.

Note 6:

$ Buildings Leasehold improvements Store equipment Roasting equipment Capitalized software Furniture, fixtures and other Work in progress Property, plant and equipment, gross Accumulated depreciation()()Property, plant and equipment, net$ $ $ Accrued dividends payable Accrued capital and other operating expenditures

Insurance reserves

Income taxes payable Accrued business taxes Total accrued liabilities$ $

Table of Contents

$ $ $ Occupancy costs Other expenses Total store operating expenses$ $ $ $

Note 7:

Finite-Lived Intangible Assets $()$ $ $()$ Acquired trade secrets and processes () () Trade names, trademarks and patents () () Licensing agreements () () Other finite-lived intangible assets () () Total finite-lived intangible assets$ $()$ $ $()$

Amortization expense for finite-lived intangible assets was $ million and $ million for the quarter and two quarters ended March 30, 2025, respectively, and $ million and $ million for the quarter and two quarters ended March 31, 2024, respectively.

2026 2027 2028 2029 Thereafter Total estimated future amortization expense$

Goodwill

$ $ $ $

Acquisition(1)

Other(2)

()() ()

Goodwill balance at March 30, 2025

$ $ $ $ $

(1)

Table of Contents

Note 8:

billion unsecured five-year revolving credit facility (the “2021 credit facility”), of which $ million may be used for issuances of letters of credit, is currently set to mature on . The 2021 credit facility is available for working capital, capital expenditures, and other 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 $ billion.

Borrowings under the 2021 credit facility, which was most recently amended in April 2023, will bear interest at a variable rate based on Term SOFR, and, for U.S. dollar-denominated loans under certain circumstances, a Base Rate (as defined in the 2021 credit facility), in each case plus an applicable margin. The applicable margin is based on the Company’s long-term credit ratings assigned by the Moody’s and Standard & Poor’s rating agencies. The “Base Rate” is the highest of (i) the Federal Funds Rate (as defined in the 2021 credit facility) plus %, (ii) Bank of America’s prime rate, and (iii) Term SOFR plus %. Term SOFR means the forward-looking SOFR term rate administrated by the Chicago Mercantile Exchange plus a SOFR Adjustment of %.

The 2021 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 March 30, 2025, we were in compliance with all applicable covenants. amounts were outstanding under our 2021 credit facility as of March 30, 2025 or September 29, 2024.

Short-term Debt

Under our commercial paper program, we may issue unsecured commercial paper notes up to a maximum aggregate amount outstanding at any time of $ billion, with individual maturities that may vary but not exceed days from the date of issue. Amounts outstanding under the commercial paper program are required to be backstopped by available commitments under our 2021 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. We had borrowings outstanding under our commercial paper program as of March 30, 2025 and September 29, 2024. Our total available contractual borrowing capacity for general corporate purposes was $ billion as of the end of our second quarter of fiscal 2025.

Additionally, we hold the following Japanese yen-denominated credit facilities that are available for working capital needs and capital expenditures within our Japanese market:

•A ¥ billion, or $ million, credit facility is currently set to mature on . Borrowings under this credit facility are subject to terms defined within the facility and will bear interest at a variable rate based on Tokyo Interbank Offered Rate (“TIBOR”) plus an applicable margin of %.

As of March 30, 2025 and September 29, 2024, we had borrowings outstanding under these credit facilities.

Table of Contents

Long-term Debt

2026 2027 2028 2029 Thereafter Total$

Table of Contents

Note 9:

$ $ $ Variable lease costs Short-term lease costs Total lease costs$ $ $ $

(1)

Operating lease liabilities arising from obtaining right-of-use assets(1)

Mar 30, 2025Mar 31, 2024Weighted-average remaining operating lease term years yearsWeighted-average operating lease discount rate % %

(1)

Finance lease assets are recorded in property, plant and equipment, net with the corresponding lease liabilities included in accrued liabilities and other long-term liabilities on the consolidated balance sheets. These balances were not material as of March 30, 2025 and September 29, 2024. Finance lease costs were also immaterial for the quarters ended March 30, 2025 and March 31, 2024.

2026 2027 2028 2029 Thereafter Total lease payments Less imputed interest()Total$

As of March 30, 2025, we have entered into operating leases that have not yet commenced of $ billion, primarily related to real estate leases. These leases will commence between fiscal year 2025 and fiscal year 2029 with lease terms ranging from to twenty years.

Note 10:

million and $ billion, respectively. As of September 29, 2024, the current and long-term deferred revenue related to the Nestlé up-front payment was $ million and $ billion, respectively. During each of the quarters ended March 30, 2025 and March 31, 2024, we recognized $ million of prepaid royalty revenue related to Nestlé. During each of the two quarters ended March 30, 2025 and March 31, 2024, we recognized $ million of prepaid royalty revenue related to Nestlé.

Table of Contents

Revenue deferred - card activations, card reloads and Stars earned Revenue recognized - card and Stars redemptions and breakage()

Other(1)

Stored value cards and loyalty program at March 30, 2025(2)

Quarter Ended March 31, 2024

Total

Stored value cards and loyalty program at December 31, 2023

$ Revenue deferred - card activations, card reloads and Stars earned Revenue recognized - card and Stars redemptions and breakage()

Other(1)

()

Stored value cards and loyalty program at March 31, 2024(2)

Two Quarters Ended March 30, 2025

Total

Stored value cards and loyalty program at September 29, 2024

$ Revenue deferred - card activations, card reloads and Stars earned Revenue recognized - card and Stars redemptions and breakage()

Other(1)

()

Stored value cards and loyalty program at March 30, 2025(2)

Two Quarters Ended March 31, 2024

Total

Stored value cards and loyalty program at October 1, 2023

$ Revenue deferred - card activations, card reloads and Stars earned Revenue recognized - card and Stars redemptions and breakage()

Other(1)

()

Stored value cards and loyalty program at March 31, 2024(2)

(1)

(2) billion of these amounts were current.

Table of Contents

Note 11:

)$ $ $()$()Net gains/(losses) recognized in OCI before reclassifications () Net (gains)/losses reclassified from AOCI to earnings ()() ()Other comprehensive income/(loss) attributable to Starbucks ()() Net gains/(losses) in AOCI, end of period$()$ $ $()$()March 31, 2024Net gains/(losses) in AOCI, beginning of period$()$ $ $()$()Net gains/(losses) recognized in OCI before reclassifications() ()()Net (gains)/losses reclassified from AOCI to earnings ()() ()Other comprehensive income/(loss) attributable to Starbucks ()()Other comprehensive income/(loss) attributable to NCI ()()Net gains/(losses) in AOCI, end of period$()$ $ $()$()Two Quarters EndedAvailable-for-Sale Debt SecuritiesCash Flow HedgesNet Investment HedgesTranslation Adjustment and OtherTotalMarch 30, 2025Net gains/(losses) in AOCI, beginning of period$()$ $ $()$()Net gains/(losses) recognized in OCI before reclassifications ()()Net (gains)/losses reclassified from AOCI to earnings ()() ()Other comprehensive income/(loss) attributable to Starbucks () ()()Other comprehensive income/(loss) attributable to NCI ()()Net gains/(losses) in AOCI, end of period$()$ $ $()$()March 31, 2024Net gains/(losses) in AOCI, beginning of period$()$()$ $()$()Net gains/(losses) recognized in OCI before reclassifications Net (gains)/losses reclassified from AOCI to earnings () Other comprehensive income/(loss) attributable to Starbucks Other comprehensive income/(loss) attributable to NCI Net gains/(losses) in AOCI, end of period$()$ $ $()$()

Table of Contents

)$()Interest income and other, netGains/(losses) on cash flow hedges

Please refer to Note 3, Derivative Financial Instruments for additional information.

Gains/(losses) on net investment hedges Interest expense Total before tax()()

Tax (expense)/benefit

$ $ Net of taxTwo Quarters EndedAOCI
ComponentsAmounts Reclassified from AOCIAffected Line Item in
the Statements of EarningsMar 30, 2025Mar 31, 2024Gains/(losses) on available-for-sale debt securities$()$()Interest income and other, netGains/(losses) on cash flow hedges ()

Please refer to Note 3, Derivative Financial Instruments for additional information.

Gains/(losses) on net investment hedges Interest expense ()Total before tax()()Tax (expense)/benefit$ $()Net of tax

In addition to billion shares of authorized common stock with $ par value per share, we have million shares of authorized preferred stock, of which was outstanding as of March 30, 2025.

During the two quarters ended March 30, 2025, we made share repurchases. During the two quarters ended March 31, 2024, we repurchased million shares of common stock on the open market for $ million. As of March 30, 2025, million shares remained available for repurchase under current authorizations.

During the second quarter of fiscal 2025, our Board of Directors approved a quarterly cash dividend to shareholders of $ per share to be paid on May 30, 2025 to shareholders of record as of the close of business on May 16, 2025.

Note 12:

million shares of common stock available for issuance pursuant to future equity-based compensation awards and million shares available for issuance under our employee stock purchase plan. $ $ $ Options () ()Total stock-based compensation expense$ $ $ $

Table of Contents

Granted Options exercised/RSUs vested()()Forfeited/expired ()

Options outstanding/Nonvested RSUs, March 30, 2025

Total unrecognized stock-based compensation expense, net of estimated forfeitures, as of March 30, 2025

$ $

Note 13:

$ $ $ Weighted average common shares outstanding (for basic calculation) Dilutive effect of outstanding common stock options and RSUs Weighted average common and common equivalent shares outstanding (for diluted calculation) EPS — basic$ $ $ $ EPS — diluted$ $ $ $

, which were immaterial in the periods presented.

Note 14:

Note 15:

%$ %$ %$ %

Food(2)

% % % %

Other(3)

% % % %Total$ %$ %$ %$ %

(1)“

(2)“

(3)“

Table of Contents

$ $ $ $ Depreciation and amortization expenses

Income/(loss) from equity investees

() Operating income/(loss)$ $ $ $()$ March 31, 2024Total net revenues$ $ $ $ $ Depreciation and amortization expenses

Income/(loss) from equity investees

Operating income/(loss)$ $ $ $()$ Two Quarters EndedNorth AmericaInternationalChannel DevelopmentCorporate and OtherTotalMarch 30, 2025Total net revenues$ $ $ $ $ Depreciation and amortization expenses Income from equity investees () Operating income/(loss)$ $ $ $()$ March 31, 2024Total net revenues$ $ $ $ $ Depreciation and amortization expenses Income from equity investees Operating income/(loss)$ $ $ $()$

Note 16:

million, primarily associated with partner severance costs. These costs were recorded to restructuring on our consolidated statement of earnings. As of March 30, 2025, approximately $ million of severance costs remained in accrued payroll and benefits on our consolidated balance sheet.

Table of Contents

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

CAUTIONARY STATEMENT PURSUANT TO THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Certain statements contained herein are “forward-looking” statements within the meaning of applicable securities laws and regulations. Generally, these statements can be identified by the use of words such as “aim,” “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “feel,” “forecast,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “will,” “would,” and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. By their nature, forward-looking statements involve risks, uncertainties, and other factors (many beyond our control) that could cause our actual results to differ materially from our historical experience or from our current expectations or projections. Our forward-looking statements, and the risks and uncertainties related thereto, include, but are not limited to, those described under the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of our most recently filed 10-K and 10-Q and in other reports we file with the SEC, as well as, among others:

• our ability to preserve, grow, and leverage our brands, including the risk of negative responses by consumers (such as boycotts or negative publicity campaigns), governmental actors (such as retaliatory or threatened legislative treatment or other actions), or other third parties who object to certain actions taken or not taken by the Company, whose responses could adversely affect our brand value;

• the impact of our marketing strategies, promotional and advertising plans, pricing strategies, platforms, reformulations, innovations, or customer experience initiatives or investments;

• the costs and risks associated with, and the successful execution and effects of, our existing and any future business opportunities, expansions, initiatives, strategies, investments, and plans, including our “Back to Starbucks” plan;

• our ability to align our investment efforts with our strategic goals;

• changes in consumer preferences, demand, consumption, or spending behavior, including due to shifts in demographic or health and wellness trends, reduction in discretionary spending and price increases, and our ability to anticipate or react to these changes;

• the ability of our business partners, suppliers, and third-party providers to fulfill their responsibilities and commitments;

• the potential negative effects of reported incidents involving food- or beverage-borne illnesses, tampering, adulteration, contamination, or mislabeling;

• our ability to open new stores and efficiently maintain the attractiveness of our existing stores;

• our dependence on the financial performance of our North America operating segment, and our increasing dependence on certain international markets;

• our anticipated cash requirements and operating expenses, including our anticipated total capital expenditures;

• inherent risks of operating a global business, including changing conditions in our markets, local factors affecting store openings, protectionist trade or foreign investment policies, such as tariffs and other trade controls, economic or trade sanctions, 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, or product ingredients;

• the potential impact on our supply chain and operations of adverse weather conditions, natural disasters, or significant increases in logistics costs;

• the ability of our supply chain to meet current or future business needs and our ability to scale and improve our forecasting, planning, production, and logistics management;

• a worsening in the terms and conditions upon which we engage with our manufacturers and source suppliers, whether resulting from broader local or global conditions or dynamics specific to our relationships with such parties;

• the impact of unfavorable global or regional economic conditions and related economic slowdowns or recessions, low consumer confidence, high unemployment, weak credit or capital markets, budget deficits, burdensome government debt, austerity measures, higher interest rates, higher taxes, international trade disputes, government restrictions, geopolitical instability, higher inflation, or deflation;

• failure to meet our announced guidance or market expectations and the impact thereof;

• failure to attract or retain key executive or partner talent or successfully transition executives;

• the impacts of partner investments and changes in the availability and cost of labor, including any union organizing efforts and our responses to such efforts;

• the impact of foreign currency translation, particularly a stronger U.S. dollar;

• the impact of, and our ability to respond to, substantial competition from new entrants, consolidations by competitors, and other competitive activities, such as pricing actions (including price reductions, promotions, discounting, couponing, or free goods), marketing, category expansion, product introductions, or entry or expansion in our geographic markets;

• potential impacts of climate change;

• evolving corporate governance and public disclosure regulations and expectations;

• the potential impact of activist shareholder actions or tactics;

• failure to comply with applicable laws and changing legal and regulatory requirements;

• the impact or likelihood of significant legal disputes and proceedings or government investigations;

Table of Contents

• potential negative effects of, and our ability to respond to, a material failure, inadequacy, or interruption of our information technology systems or those of our third-party business partners or service providers, or failure to comply with data protection laws; and

• our ability to adequately protect our intellectual property or adequately ensure that we are not infringing the intellectual property of others.

In addition, many of the foregoing risks and uncertainties are, or could be, exacerbated by any worsening of the global business and economic environment. A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances, and those future events or circumstances may not occur. You should not place undue reliance on the forward-looking statements, which speak only as of the date of this report. We are under no obligation to update or alter any forward-looking statements, whether as a result of new information, future events, or otherwise.

This information should be read in conjunction with the unaudited consolidated financial statements and the notes included in Item 1 of Part I of this 10-Q and the audited consolidated financial statements and notes, and Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), contained in the 10-K.

Table of Contents

Introduction and Overview

Starbucks is the premier roaster, marketer, and retailer of specialty coffee globally, with a presence in 88 markets worldwide. As of March 30, 2025, Starbucks had more than 40,700 company-operated and licensed stores, an increase of 5% 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.

We have three reportable operating segments: 1) North America, which is inclusive of the U.S. and Canada; 2) International, which is inclusive of China, Japan, Asia Pacific, Europe, Middle East, Africa, Latin America, and the Caribbean; and 3) Channel Development. Unallocated corporate expenses are reported within Corporate and Other.

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. 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:

•New store openings and store count

•Comparable store sales

•Operating margin

Comparable store sales represents the percentage change in sales in one period from the same prior year period for company-operated stores open for 13 months or longer and excludes the impact of foreign currency translation. We analyze comparable store sales on a constant currency basis as this helps identify underlying business trends, without distortion from the effects of currency movements. Stores that are temporarily closed or operating at reduced hours remain in comparable store sales while stores identified for permanent closure have been removed.

Our fiscal year ends on the Sunday closest to September 30. Fiscal 2025 and 2024 include 52 weeks. All references to store counts, including data for new store openings, are reported net of store closures, unless otherwise noted.

Starbucks results for the second quarter of fiscal 2025 showed continued early progress on our “Back to Starbucks” strategy, as we focus on future growth and stronger returns on invested capital. During the second quarter of fiscal 2025, consolidated net revenues increased 2% to $8.8 billion compared to $8.6 billion in the second quarter of fiscal 2024, primarily driven by incremental revenues from net new company-operated store openings over the past 12 months, partially offset by unfavorable foreign currency translation impacts and a decrease in global comparable store sales. During the quarter ended March 30, 2025, our global comparable store sales declined 1%, primarily driven by a 2% decline in the U.S. market, partially offset by a 2% improvement internationally. Specific to the U.S. market, the decrease in comparable store sales was driven by a 4% decrease in comparable transactions, partially offset by a 3% increase in average ticket, primarily due to annualization of pricing and fewer discounts in the current year. Consolidated operating margin contracted 590 basis points from the prior year to 6.9%, primarily driven by deleverage, additional labor, largely in support of “Back to Starbucks,” and restructuring costs related to simplifying our global support organization.

We expect that the balance of this fiscal year will bring some challenges as we navigate a dynamic macroeconomic environment, including tariffs and volatile coffee prices. In each case, we are actively monitoring and taking actions where necessary to mitigate potential financial impacts, including further diversifying and redirecting coffee shipments to minimize tariffs, and, with respect to shifting coffee prices, opportunistically building our supply and securing pricing. We are also evaluating our global store portfolio, new store pipeline, and operations, which may result in additional restructuring charges in the near term. Going forward, we will focus on greater new store returns and enhancing the coffeehouse experience for both our partners and customers, while also reducing new store build costs. Despite the challenging macroeconomic environment, we continue to feel confident in our “Back to Starbucks” strategy and will continue making intentional investments to stabilize the business and return to long-term, profitable growth.

Table of Contents

Results of Operations (in millions)

Revenues


	Quarter Ended								Two Quarters Ended
	Mar 30, 2025		Mar 31, 2024		$ Change		% Change		Mar 30, 2025		Mar 31, 2024		$ Change		% Change
Company-operated stores	$	7,285.0	$	7,052.6	$	232.4	3.3	%	$	15,070.3	$	14,807.9	$	262.4	1.8	%
Licensed stores	1,016.0		1,054.5		(38.5)		(3.7)		2,151.7		2,246.6		(94.9)		(4.2)
Other	460.6		455.9		4.7		1.0		937.4		933.8		3.6		0.4
Total net revenues	$	8,761.6	$	8,563.0	$	198.6	2.3	%	$	18,159.4	$	17,988.3	$	171.1	1.0	%

For the quarter ended March 30, 2025 compared with the quarter ended March 31, 2024

Total net revenues for the second quarter of fiscal 2025 increased $199 million, primarily due to higher revenues from company-operated stores ($232 million), partially offset by a decrease in revenues from licensed stores ($39 million).

Company-operated store revenue increased $232 million, primarily driven by incremental revenues from 1,283 net new company-operated stores, or a 6% increase, over the past 12 months ($296 million), and incremental revenue from the conversion of 113 licensed stores to company-operated stores ($30 million) following the acquisition of 23.5 Degrees Topco Limited, a U.K. licensed business partner, during the first quarter of fiscal 2025. These increases in net revenue were partially offset by a 1% decrease in comparable store sales ($49 million), attributable to a 2% decrease in comparable transactions, partially offset by a 1% increase in average ticket, as well as unfavorable foreign currency translation impacts ($48 million).

Licensed stores revenue decreased $39 million, primarily driven by lower product and equipment sales to, and royalty revenues from, our licensees in our North America segment ($40 million), unfavorable foreign currency translation impacts ($11 million), and the impact of the acquisition of 23.5 Degrees Topco Limited ($8 million). These decreases in licensed stores revenue were partially offset by an increase in product sales to, and royalty revenues from, our licensees in our International segment ($25 million).

For the two quarters ended March 30, 2025 compared with the two quarters ended March 31, 2024

Total net revenues for the first two quarters of fiscal 2025 increased $171 million, primarily due to higher revenues from company-operated stores ($262 million), partially offset by a decrease in revenues from licensed stores ($95 million).

Company-operated store revenue increased $262 million, primarily driven by incremental revenues from 1,283 net new company-operated stores, or a 6% increase, over the past 12 months ($598 million) and incremental revenue from the conversion of 113 licensed stores to company-operated stores ($57 million) following the acquisition of 23.5 Degrees Topco Limited. These increases in net revenue were partially offset by a 2% decrease in comparable store sales ($331 million), attributable to a 4% decrease in comparable transactions, partially offset by a 2% increase in average ticket, as well as unfavorable foreign currency translation impacts ($66 million).

Licensed stores revenue decreased $95 million, primarily driven by lower product and equipment sales to, and royalty revenues from, our licensees in our North America segment ($74 million), unfavorable foreign currency translation impacts ($20 million), and the impact of the acquisition of 23.5 Degrees Topco Limited ($17 million). These decreases in licensed stores revenue were partially offset by an increase in product sales to, and royalty revenues from, our licensees in our International segment ($22 million).

Table of Contents

Operating Expenses


	Quarter Ended										Two Quarters Ended
	Mar 30, 2025		Mar 31, 2024		$ Change		Mar 30, 2025		Mar 31, 2024		Mar 30, 2025		Mar 31, 2024		$ Change		Mar 30, 2025		Mar 31, 2024
							As a % of Total Net Revenues										As a % of Total Net Revenues
Product and distribution costs	$	2,737.6	$	2,648.7	$	88.9	31.2	%	30.9	%	$	5,631.3	$	5,629.2	$	2.1	31.0	%	31.3	%
Store operating expenses	4,176.0		3,724.1		451.9		47.7		43.5		8,379.1		7,575.6		803.5		46.1		42.1
Other operating expenses	138.7		132.8		5.9		1.6		1.6		291.3		283.2		8.1		1.6		1.6
Depreciation and amortization expenses	418.9		371.9		47.0		4.8		4.3		826.2		737.2		89.0		4.5		4.1
General and administrative expenses	632.3		654.6		(22.3)		7.2		7.6		1,298.0		1,302.6		(4.6)		7.1		7.2
Restructuring	116.2		—		116.2		1.3		—		116.2		—		116.2		0.6		—

Total operating expenses	8,219.7		7,532.1		687.6		93.8		88.0		16,542.1		15,527.8		1,014.3		91.1		86.3
Income from equity investees	59.1		68.0		(8.9)		0.7		0.8		105.5		123.8		(18.3)		0.6		0.7

Operating income	$	601.0	$	1,098.9	$	(497.9)	6.9	%	12.8	%	$	1,722.8	$	2,584.3	$	(861.5)	9.5	%	14.4	%
Store operating expenses as a % of company-operated stores revenue							57.3	%	52.8	%							55.6	%	51.2	%

For the quarter ended March 30, 2025 compared with the quarter ended March 31, 2024

Product and distribution costs as a percentage of total net revenues increased 30 basis points for the second quarter of fiscal 2025, primarily due to inflation and rising coffee prices (approximately 60 basis points), partially offset by supply chain efficiencies (approximately 50 basis points).

Store operating expenses as a percentage of total net revenues increased 420 basis points for the second quarter of fiscal 2025. Store operating expenses as a percentage of company-operated stores revenue increased 450 basis points, primarily due to deleverage (approximately 200 basis points) and additional labor, largely in support of “Back to Starbucks” (approximately 180 basis points).

Depreciation and amortization expenses as a percentage of total net revenues increased 50 basis points, primarily due to deleverage.

General and administrative expenses decreased $22 million, primarily due to lapping certain proxy solicitation and advisory services costs ($30 million).

Restructuring was $116 million, largely due to costs associated with simplifying our support organization, primarily severance costs, in support of our “Back to Starbucks” strategy.

The combination of these changes resulted in an overall decrease in operating margin of 590 basis points for the second quarter of fiscal 2025.

For the two quarters ended March 30, 2025 compared with the two quarters ended March 31, 2024

Product and distribution costs as a percentage of total net revenues decreased 30 basis points for the first two quarters of fiscal 2025, primarily due to supply chain efficiencies (approximately 60 basis points), partially offset by inflation and rising coffee prices (approximately 50 basis points).

Store operating expenses as a percentage of total net revenues increased 400 basis points for the first two quarters of fiscal 2025. Store operating expenses as a percentage of company-operated stores revenue increased 440 basis points, primarily due to deleverage (approximately 230 basis points) and additional labor, largely in support of “Back to Starbucks” (approximately 160 basis points).

Depreciation and amortization expenses as a percentage of total net revenues increased 40 basis points, primarily due to deleverage.

Table of Contents

General and administrative expenses decreased $5 million, primarily due to lapping certain proxy solicitation and advisory services costs ($30 million), partially offset by increased costs to support leadership transitions ($22 million).

Restructuring was $116 million, largely due to costs associated with simplifying our support organization, primarily severance costs, in support of our “Back to Starbucks” strategy.

Income from equity investees decreased $18 million, primarily due to lower income from our North American Coffee Partnership joint venture.

The combination of these changes resulted in an overall decrease in operating margin of 490 basis points for the first two quarters of fiscal 2025.

Other Income and Expenses


	Quarter Ended										Two Quarters Ended
	Mar 30, 2025		Mar 31, 2024		$ Change		Mar 30, 2025		Mar 31, 2024		Mar 30, 2025		Mar 31, 2024		$ Change		Mar 30, 2025		Mar 31, 2024
							As a % of Total Net Revenues										As a % of Total Net Revenues
Operating income	$	601.0	$	1,098.9	$	(497.9)	6.9	%	12.8	%	$	1,722.8	$	2,584.3	$	(861.5)	9.5	%	14.4	%


Interest income and other, net	28.4		34.1		(5.7)		0.3		0.4		56.2		67.9		(11.7)		0.3		0.4
Interest expense	(127.3)		(140.6)		13.3		(1.5)		(1.6)		(254.5)		(280.7)		26.2		(1.4)		(1.6)
Earnings before income taxes	502.1		992.4		(490.3)		5.7		11.6		1,524.5		2,371.5		(847.0)		8.4		13.2
Income tax expense	118.0		219.9		(101.9)		1.3		2.6		359.4		574.6		(215.2)		2.0		3.2
Net earnings including noncontrolling interests	384.1		772.5		(388.4)		4.4		9.0		1,165.1		1,796.9		(631.8)		6.4		10.0
Net earnings/(loss) attributable to noncontrolling interests	(0.1)		0.1		(0.2)		0.0		0.0		0.1		0.1		—		0.0		0.0
Net earnings attributable to Starbucks	$	384.2	$	772.4	$	(388.2)	4.4	%	9.0	%	$	1,165.0	$	1,796.8	$	(631.8)	6.4	%	10.0	%
Effective tax rate including noncontrolling interests							23.5	%	22.2	%							23.6	%	24.2	%

For the quarter ended March 30, 2025 compared with the quarter ended March 31, 2024

Interest income and other, net, decreased $6 million, primarily due to lower interest rates in the current year.

Interest expense decreased $13 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 the quarter ended March 30, 2025 was 23.5% compared to 22.2% for the same period in fiscal 2024. The increase was primarily due to lapping the election of an alternative tax approach in a certain foreign jurisdiction that resulted in a tax benefit in the second quarter of fiscal 2024 (approximately 300 basis points), partially offset by the effect of lower pre-tax earnings and the proportionate impacts from certain permanent differences and discrete items.

For the two quarters ended March 30, 2025 compared with the two quarters ended March 31, 2024

Interest income and other, net, decreased $12 million, primarily due to lower interest rates in the current year.

Interest expense decreased $26 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 the first two quarters ended March 30, 2025 was 23.6% compared to 24.2% for the same period in fiscal 2024. The decrease was primarily due to the discrete impact of a tax status change for a certain foreign entity

Table of Contents

(approximately 200 basis points), partially offset by lapping the election of an alternative tax approach in a certain foreign jurisdiction that resulted in a tax benefit in the second quarter of fiscal 2024 (approximately 130 basis points).

Table of Contents

Segment Information

Results of operations by segment (in millions):

North America


	Quarter Ended										Two Quarters Ended
	Mar 30, 2025		Mar 31, 2024		$ Change		Mar 30, 2025		Mar 31, 2024		Mar 30, 2025		Mar 31, 2024		$ Change		Mar 30, 2025		Mar 31, 2024
							As a % of North America Total Net Revenues										As a % of North America Total Net Revenues
Net revenues:
Company-operated stores	$	5,861.7	$	5,724.5	$	137.2	90.6	%	89.7	%	$	12,229.5	$	12,105.7	$	123.8	90.3	%	89.7	%
Licensed stores	610.3		654.8		(44.5)		9.4		10.3		1,313.0		1,392.7		(79.7)		9.7		10.3
Other	0.7		0.7		—		0.0		0.0		2.1		2.3		(0.2)		0.0		0.0
Total net revenues	6,472.7		6,380.0		92.7		100.0		100.0		13,544.6		13,500.7		43.9		100.0		100.0
Product and distribution costs	1,807.1		1,767.7		39.4		27.9		27.7		3,774.6		3,791.6		(17.0)		27.9		28.1
Store operating expenses	3,431.6		3,037.4		394.2		53.0		47.6		6,890.1		6,185.1		705.0		50.9		45.8
Other operating expenses	68.6		67.1		1.5		1.1		1.1		147.0		144.5		2.5		1.1		1.1
Depreciation and amortization expenses	299.2		257.1		42.1		4.6		4.0		588.1		507.5		80.6		4.3		3.8
General and administrative expenses	96.6		102.4		(5.8)		1.5		1.6		193.9		202.9		(9.0)		1.4		1.5
Restructuring	21.3		—		21.3		0.3		—		21.3		—		21.3		0.2		0.0
Total operating expenses	5,724.4		5,231.7		492.7		88.4		82.0		11,615.0		10,831.6		783.4		85.8		80.2

Operating income	$	748.3	$	1,148.3	$	(400.0)	11.6	%	18.0	%	$	1,929.6	$	2,669.1	$	(739.5)	14.2	%	19.8	%
Store operating expenses as a % of company-operated stores revenue							58.5	%	53.1	%							56.3	%	51.1	%

For the quarter ended March 30, 2025 compared with the quarter ended March 31, 2024

Revenues

North America total net revenues for the second quarter of fiscal 2025 increased $93 million, or 1%, primarily driven by net new company-operated store growth of 5%, or 504 stores, over the past 12 months ($226 million). This growth was partially offset by a net 1% decrease in comparable store sales ($70 million), driven by a 4% decrease in comparable transactions, partially offset by a 3% increase in average ticket, primarily due to annualization of prior year pricing and fewer discounts in the current year. Also contributing were lower product and equipment sales to, and royalty revenues from, our licensees ($40 million).

Operating Margin

North America operating income for the second quarter of fiscal 2025 decreased 35% to $748 million, compared to $1.1 billion in the second quarter of fiscal 2024. Operating margin contracted 640 basis points to 11.6%, primarily driven by deleverage (approximately 300 basis points) and additional labor, largely in support of “Back to Starbucks” (approximately 230 basis points).

Table of Contents

For the two quarters ended March 30, 2025 compared with the two quarters ended March 31, 2024

Revenues

North America total net revenues for the first two quarters of fiscal 2025 increased $44 million primarily driven by net new company-operated store growth 5%, or 504 stores, over the past 12 months ($456 million). This growth was partially offset by a a net 3% decrease in comparable store sales ($304 million) driven by a 6% decrease in comparable transactions, partially offset by a 3% increase in average ticket, primarily due to annualization of prior year pricing and fewer discounts in the current year. Also contributing were lower product and equipment sales to, and royalty revenues from, our licensees ($74 million).

Operating Margin

North America operating income for the first two quarters of fiscal 2025 decreased 28% to $1.9 billion, compared to $2.7 billion in the first two quarters of fiscal 2024. Operating margin contracted 560 basis points to 14.2%, primarily driven by deleverage (approximately 330 basis points) and additional labor, largely in support of “Back to Starbucks” (approximately 190 basis points).

International


	Quarter Ended										Two Quarters Ended
	Mar 30, 2025		Mar 31, 2024		$ Change		Mar 30, 2025		Mar 31, 2024		Mar 30, 2025		Mar 31, 2024		$ Change		Mar 30, 2025		Mar 31, 2024
							As a % of International Total Net Revenues										As a % of International Total Net Revenues
Net revenues:
Company-operated stores	$	1,423.3	$	1,328.1	$	95.2	76.2	%	75.6	%	$	2,840.8	$	2,702.2	$	138.6	76.0	%	75.0	%
Licensed stores	405.7		399.7		6.0		21.7		22.7		838.7		853.9		(15.2)		22.4		23.7
Other	38.1		29.5		8.6		2.0		1.7		58.9		47.5		11.4		1.6		1.3
Total net revenues	1,867.1		1,757.3		109.8		100.0		100.0		3,738.4		3,603.6		134.8		100.0		100.0
Product and distribution costs	659.8		619.8		40.0		35.3		35.3		1,306.8		1,286.4		20.4		35.0		35.7
Store operating expenses	744.4		686.7		57.7		39.9		39.1		1,489.0		1,390.5		98.5		39.8		38.6
Other operating expenses	55.1		50.0		5.1		3.0		2.8		115.7		110.1		5.6		3.1		3.1
Depreciation and amortization expenses	89.0		84.3		4.7		4.8		4.8		178.1		168.3		9.8		4.8		4.7
General and administrative expenses	84.8		82.9		1.9		4.5		4.7		177.2		173.3		3.9		4.7		4.8
Restructuring	16.8		—		16.8		0.9		—		16.8		—		16.8		0.4		—
Total operating expenses	1,649.9		1,523.7		126.2		88.4		86.7		3,283.6		3,128.6		155.0		87.8		86.8
Income/(loss) from equity investees	(0.2)		0.2		(0.4)		0.0		0.0		(0.7)		0.3		(1.0)		0.0		0.0
Operating income	$	217.0	$	233.8	$	(16.8)	11.6	%	13.3	%	$	454.1	$	475.3	$	(21.2)	12.1	%	13.2	%
Store operating expenses as a % of company-operated stores revenue							52.3	%	51.7	%							52.4	%	51.5	%

For the quarter ended March 30, 2025 compared with the quarter ended March 31, 2024

Revenues

International total net revenues for the second quarter of fiscal 2025 increased $110 million, or 6%, primarily due to net new company-operated store growth of 8%, or 779 stores, over the past 12 months ($70 million) and higher product sales to, and royalty revenues from, our licensees ($25 million), primarily due to the opening of 497 net new licensed stores over the past 12 months. Also contributing to the increase in revenues was the incremental net revenue from the conversion of 113 licensed

Table of Contents

stores to company-operated stores ($22 million) following the acquisition of 23.5 Degrees Topco Limited, a U.K. licensed business partner, during the first quarter of fiscal 2025, in addition to a 2% increase in comparable stores sales ($21 million), driven by a 3% increase in comparable transactions, partially offset by a 1% decrease in average ticket. These increases were partially offset by unfavorable foreign currency translation impacts ($39 million).

Operating Margin

International operating income for the second quarter of fiscal 2025 decreased 7% to $217 million, compared to $234 million in the second quarter of fiscal 2024. Operating margin contracted 170 basis points to 11.6%, primarily due to increased promotional activity (approximately 200 basis points) and restructuring costs (approximately 90 basis points), partially offset by leverage (approximately 170 basis points).

For the two quarters ended March 30, 2025 compared with the two quarters ended March 31, 2024

Revenues

International total net revenues for the first two quarters of fiscal 2025 increased $135 million, or 4%, primarily due to net new company-operated store growth of 8%, or 779 stores, over the past 12 months ($142 million), and the incremental net revenue from the conversion of 113 licensed stores to company-operated stores ($41 million) following the acquisition of 23.5 Degrees Topco Limited during the first quarter of fiscal 2025. Also contributing to the increase in revenues were higher product sales to, and royalty revenues from, our licensees ($22 million), primarily due to the opening of 497 net new licensed stores over the past 12 months. These increases were partially offset by unfavorable foreign currency translation impacts ($55 million), as well as a 1% decrease in comparable store sales ($27 million), driven by a 2% decrease in average ticket, partially offset by a 1% increase in comparable transactions.

Operating Margin

International operating income for the first two quarters of fiscal 2025 decreased 4% to $454 million, compared to $475 million in the first two quarters of fiscal 2024. Operating margin contracted 110 basis points to 12.1%, primarily due to increased promotional activity (approximately 190 basis points), partially offset by leverage (approximately 80 basis points).

Channel Development


	Quarter Ended										Two Quarters Ended
	Mar 30, 2025		Mar 31, 2024		$ Change		Mar 30, 2025		Mar 31, 2024		Mar 30, 2025		Mar 31, 2024		$ Change		Mar 30, 2025		Mar 31, 2024
							As a % of Channel Development Total Net Revenues										As a % of Channel Development Total Net Revenues
Net revenues	$	409.0	$	418.2	$	(9.2)					$	845.3	$	866.2	$	(20.9)
Product and distribution costs	257.7		252.6		5.1		63.0	%	60.4	%	517.5		531.5		(14.0)		61.2	%	61.4	%
Other operating expenses	15.0		15.2		(0.2)		3.7		3.6		28.4		28.0		0.4		3.4		3.2
Depreciation and amortization expenses	0.0		—		0.0		0.0		—		0.0		—		0.0		—		—
General and administrative expenses	1.2		1.9		(0.7)		0.3		0.5		3.1		4.2		(1.1)		0.4		0.5
Restructuring	0.9		—		0.9		0.2		—		0.9		—		0.9		0.1		—
Total operating expenses	274.8		269.7		5.1		67.2		64.5		549.9		563.7		(13.8)		65.1		65.1
Income from equity investees	59.3		67.8		(8.5)		14.5		16.2		106.2		123.5		(17.3)		12.6		14.3

Operating income	$	193.5	$	216.3	$	(22.8)	47.3	%	51.7	%	$	401.6	$	426.0	$	(24.4)	47.5	%	49.2	%

For the quarter ended March 30, 2025 compared with the quarter ended March 31, 2024

Table of Contents

Revenues

Channel Development total net revenues for the second quarter of fiscal 2025 decreased $9 million, or 2%, primarily due to a decline in revenue in the Global Coffee Alliance ($11 million), partially offset by higher revenue in our global ready-to-drink business ($5 million).

Operating Margin

Channel Development operating income for the second quarter of fiscal 2025 decreased 11% to $194 million, compared to $216 million in the second quarter of fiscal 2024. Operating margin contracted 440 basis points to 47.3%, primarily driven by higher product costs related to the Global Coffee Alliance (approximately 390 basis points) and a decline in our North American Coffee Partnership joint venture income (approximately 170 basis points), partially offset by mix shift (approximately 160 basis points).

For the two quarters ended March 30, 2025 compared with the two quarters ended March 31, 2024

Revenues

Channel Development total net revenues for the first two quarters of fiscal 2025 decreased $21 million, or 2%, primarily due to a decline in revenue in the Global Coffee Alliance ($18 million) and decreased ingredient sales to our North American Coffee Partnership joint venture ($10 million), partially offset by higher revenue in our global ready-to-drink business ($12 million).

Operating Margin

Channel Development operating income for the first two quarters of fiscal 2025 decreased 6% to $402 million, compared to $426 million in the first two quarters of fiscal 2024. Operating margin contracted 170 basis points to 47.5%, primarily driven by a decline in our North American Coffee Partnership joint venture income.

Corporate and Other


	Quarter Ended								Two Quarters Ended
	Mar 30, 2025		Mar 31, 2024		$ Change		% Change		Mar 30, 2025		Mar 31, 2024		$ Change		% Change
Net revenues:


Other	$	12.8	$	7.5	$	5.3	70.7	%	$	31.1	$	17.8	$	13.3	74.7	%
Total net revenues	12.8		7.5		5.3		70.7		31.1		17.8		13.3		74.7
Product and distribution costs	13.0		8.6		4.4		51.2		32.4		19.7		12.7		64.5

Other operating expenses	0.0		0.5		(0.5)		nm		0.2		0.6		(0.4)		(66.7)
Depreciation and amortization expenses	30.7		30.5		0.2		0.7		60.0		61.4		(1.4)		(2.3)
General and administrative expenses	449.7		467.4		(17.7)		(3.8)		923.8		922.2		1.6		0.2
Restructuring	77.2		—		77.2		nm		77.2		—		77.2		nm
Total operating expenses	570.6		507.0		63.6		12.5		1,093.6		1,003.9		89.7		8.9

Operating loss	$	(557.8)	$	(499.5)	$	(58.3)	11.7	%	$	(1,062.5)	$	(986.1)	$	(76.4)	7.7	%

Corporate and Other primarily consists of our unallocated corporate expenses. 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.

For the quarter ended March 30, 2025 compared with the quarter ended March 31, 2024

Corporate and Other operating loss increased 12% to $558 million for the second quarter of fiscal 2025 compared to $500 million for the second quarter of fiscal 2024, largely due to costs associated with restructuring our support organization, primarily severance costs, in support of our “Back to Starbucks” strategy.

For the two quarters ended March 30, 2025 compared with the two quarters ended March 31, 2024

Corporate and Other operating loss increased 8% to $1.1 billion for the first two quarters of fiscal 2025 compared to $986 million for the first two quarters of fiscal 2024, largely due to costs associated with restructuring our support organization, primarily severance costs, in support of our “Back to Starbucks” strategy.

Table of Contents

Quarterly Store Data

Our store data for the periods presented is as follows:


	Net stores opened/(closed) and transferred during the period
	Quarter Ended		Two Quarters Ended		Stores open as of
	Mar 30, 2025	Mar 31, 2024	Mar 30, 2025	Mar 31, 2024	Mar 30, 2025	Mar 31, 2024
North America
Company-operated stores	89	112	170	199	11,331	10,827
Licensed stores	1	22	33	56	7,296	7,238
Total North America	90	134	203	255	18,627	18,065
International
Company-operated stores(1)	91	132	317	318	10,174	9,282
Licensed stores(1)	32	98	70	340	11,988	11,604
Total International	123	230	387	658	22,162	20,886

(1)Net stores opened/(closed) and transferred during the period, for the two quarters ended March 30, 2025, includes 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.

Financial Condition, Liquidity, and Capital Resources

Cash and Investment Overview

Our cash and investments were $3.2 billion as of March 30, 2025 and $3.8 billion as of September 29, 2024. 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 and government treasury securities (domestic and foreign), as well as principal-protected structured deposits. As of March 30, 2025, approximately $2.0 billion of cash and short-term investments were held in foreign subsidiaries.

Borrowing Capacity

Revolving Credit Facility

Our $3.0 billion unsecured five-year revolving credit facility (the “2021 credit facility”), of which $150.0 million may be used for issuances of letters of credit, is currently set to mature on September 16, 2026. The 2021 credit facility is available for working capital, capital expenditures, and other 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 2021 credit facility, which was most recently amended in April 2023, will bear interest at a variable rate based on Term SOFR, and, for U.S. dollar-denominated loans under certain circumstances, a Base Rate (as defined in the 2021 credit facility), in each case plus an applicable margin. The applicable margin is based on the Company’s long-term credit ratings assigned by the Moody’s and Standard & Poor’s rating agencies. The “Base Rate” is the highest of (i) the Federal Funds Rate (as defined in the 2021 credit facility) plus 0.500%, (ii) Bank of America’s prime rate, and (iii) Term SOFR plus 1.000%. Term SOFR means the forward-looking SOFR term rate administrated by the Chicago Mercantile Exchange plus a SOFR Adjustment of 0.100%.

The 2021 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 March 30, 2025, we were in compliance with all applicable covenants. No amounts were outstanding under our 2021 credit facility as of March 30, 2025 or September 29, 2024.

Commercial Paper

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 2021 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

Table of Contents

dividends on our common stock, and share repurchases. We had no borrowings outstanding under our commercial paper program as of March 30, 2025 and September 29, 2024. Our total available contractual borrowing capacity for general corporate purposes was $3.0 billion as of the end of our second quarter of fiscal 2025.

Credit Facilities in Japan

Additionally, we hold the following Japanese yen-denominated credit facilities that are available for working capital needs and capital expenditures within our Japanese market.

•A ¥5.0 billion, or $33.1 million, credit facility is currently set to mature on December 30, 2025. Borrowings under this credit facility are subject to terms defined within the facility and will bear interest at a variable rate based on TIBOR plus an applicable margin of 0.400%.

•A ¥10.0 billion, or $66.2 million, credit facility is currently set to mature on March 27, 2026. Borrowings under this credit facility are subject to terms defined within the facility and will bear interest at a variable rate based on TIBOR plus an applicable margin of 0.300%.

As of March 30, 2025 and September 29, 2024, we had no borrowings outstanding under these credit facilities.

See Note 8, Debt, to the consolidated financial statements included in Item 1 of Part I of this 10-Q for details of the components of our long-term debt.

Our ability to incur new liens and conduct sale and leaseback transactions on certain material properties is subject to compliance with terms of the indentures under which the long-term notes were issued. As of March 30, 2025, we were in compliance with all applicable covenants.

Use of Cash

We expect to use our available cash and investments, including, but not limited to, additional potential future borrowings under the credit facilities, commercial paper program, and the issuance of debt to support and invest in our core businesses, including investing in new ways to serve our customers and supporting our store partners, repaying maturing debts, returning cash to shareholders through common stock cash dividend payments and discretionary share repurchases, and investing in new business opportunities related to our core and developing businesses. Furthermore, we may use our available cash resources to make proportionate capital contributions to our investees. We may also seek strategic acquisitions to leverage existing capabilities and further build our business. Acquisitions may include increasing our ownership interests in our investees. Any decisions to increase such ownership interests will be driven by valuation and fit with our ownership strategy.

We believe that net future cash flows generated from operations and existing cash and investments both domestically and internationally, combined with our ability to leverage our balance sheet through the issuance of debt, will be sufficient to finance capital requirements for our core businesses as well as shareholder distributions for at least the next 12 months. We are currently not aware of any trends or demands, commitments, events, or uncertainties that will result in, or that are reasonably likely to result in, our liquidity increasing or decreasing in any material way that will impact our capital needs during or beyond the next 12 months. We have borrowed funds and continue to believe we have the ability to do so at reasonable interest rates; however, additional borrowings would result in increased interest expense in the future. In this regard, we may incur additional debt, within targeted levels, as part of our plans to fund our capital programs, including cash returns to shareholders through future dividends and discretionary share repurchases, refinancing debt maturities, as well as investing in new business opportunities. If necessary, we may pursue additional sources of financing, including both short-term and long-term borrowings and debt issuances.

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 the second quarter of fiscal 2025, our Board of Directors approved a quarterly cash dividend to shareholders of $0.61 per share to be paid on May 30, 2025 to shareholders of record as of the close of business on May 16, 2025.

During the two quarters ended March 30, 2025, we made no common stock share repurchases. As of March 30, 2025, 29.8 million shares remained available for repurchase under current authorizations.

Other than normal operating expenses, cash requirements for the remainder of fiscal 2025 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 2025 are expected to be reasonably consistent with fiscal 2024.

Table of Contents

In the MD&A included in the 10-K, we disclosed that we had $35.6 billion of current and long-term material cash requirements as of September 29, 2024. There have been no material changes to our material cash requirements during the period covered by this 10-Q outside of the normal course of our business.

Cash Flows

Net cash provided by operating activities was $2.4 billion for the first two quarters of fiscal 2025, compared to $2.9 billion for the same period in fiscal 2024. The change was primarily due to a decrease in net earnings of $632 million and a net increase of $346 million in inventories, which was primarily driven by green coffee, partially offset by a net decrease of $391 million in accounts payable, primarily due to payment timing.

Net cash used in investing activities totaled $1.5 billion for the first two quarters of fiscal 2025, compared to $1.3 billion for the same period in fiscal 2024. The change was primarily due to the acquisition of 23.5 Degrees Topco Limited and a net decrease of $56 million in cash provided by investment activity, primarily structured deposit investments.

Net cash used in financing activities for the first two quarters of fiscal 2025 totaled $1.4 billion, compared to $2.4 billion for the same period in fiscal 2024. The change was primarily due to no current year issuances or repayments of long-term debt and no current year share repurchases of our common stock compared to the prior year.

Commodity Prices, Availability and General Risk Conditions

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 commodities, including recent increases in green coffee prices, 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 Part 1, Item 1 of the 10-K, as well as Risk Factors in Part I, Item 1A of the 10-K.

Seasonality and Quarterly Results

Our business is subject to moderate seasonal fluctuations, of which our fiscal second quarter typically experiences lower revenues and operating income. Additionally, as our stored value cards (“Starbucks Cards”) are issued to, and loaded by, customers during the holiday season, we tend to have higher cash flows from operations during the first quarter of the fiscal year. However, since revenues from Starbucks Cards are recognized upon redemption and not when cash is loaded onto the Starbucks Cards, the impact of seasonal fluctuations on the consolidated statements of earnings is much less pronounced. As a result of moderate seasonal fluctuations, results for any quarter are not necessarily indicative of the results that may be achieved for the full fiscal year.

Critical Accounting Estimates

The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions, and estimates that affect the amounts reported. Note 1, Summary of Significant Accounting Policies and Estimates, to the consolidated financial statements included in Item 1 of Part I of this 10-Q and in the Notes to Consolidated Financial Statements in Part II, Item 8 of the 10-K describe the significant accounting policies and methods used in the preparation of the Company’s consolidated financial statements. There have been no material changes to the Company’s critical accounting estimates since the 10-K.

RECENT ACCOUNTING PRONOUNCEMENTS

See Note 1, Summary of Significant Accounting Policies and Estimates, to the consolidated financial statements included in Item 1 of Part I of this 10-Q, for a detailed description of recent accounting pronouncements.

Item 3.Quantitative and Qualitative Disclosures About Market Risk

There has been no material change in the commodity price risk, foreign currency exchange risk, equity security price risk, or interest rate risk discussed in Item 7A of the 10-K.

Table of Contents

Item 4. Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that material information required to be disclosed in our periodic reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Our disclosure controls and procedures are also designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer as appropriate, to allow timely decisions regarding required disclosure.

During the second quarter of fiscal 2025, we carried out an evaluation, under the supervision and with the participation of our management, including our chief executive officer and our chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based upon that evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective, as of the end of the period covered by this report (March 30, 2025).

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during our most recently completed fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Table of Contents

PART II — OTHER INFORMATION

Item 1.Legal Proceedings

See Note 14, Commitments and Contingencies, to the consolidated financial statements included in Item 1 of Part I of this 10-Q for information regarding certain legal proceedings in which we are involved.

Item 1A.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.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

Shares under our ongoing share repurchase program may be repurchased in open market transactions, including pursuant to a trading plan adopted in accordance with Rule 10b5-1 of the Exchange Act, or through privately negotiated transactions. The timing, manner, price, and amount of repurchases will be determined at our discretion and the share repurchase program may be suspended, terminated, or modified at any time for any reason. During the second fiscal quarter ended March 30, 2025, there was no share repurchase activity.

Item 3.Defaults upon Senior Securities

None.

Item 4.Mine Safety Disclosures

Not applicable.

Item 5.Other Information

Insider Adoption or Termination of Trading Arrangements:

During the fiscal quarter ended March 30, 2025, none of our directors or officers informed us of the or of a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Regulation S-K, Item 408.

Table of Contents

Item 6.Exhibits


		Incorporated by Reference
Exhibit No.	Exhibit Description	Form	File No.	Date of Filing	Exhibit Number	Filed Herewith
3.1	Restated Articles of Incorporation of Starbucks Corporation	10-Q	000-20322	4/28/2015	3.1
3.2	Amended and Restated Bylaws of Starbucks Corporation (As amended and restated through March 17, 2021)	8-K	000-20322	3/19/2021	3.1
10.1	Offer Letter, dated February 27, 2025, by and between Starbucks Corporation and Cathy R. Smith	8-K	000-20322	3/4/2025	10.1
31.1	Certification of Principal Executive Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	—	—	—	—	X
31.2	Certification of Principal Financial Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	—	—	—	—	X
32*	Certifications of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	—	—	—	—	—
101	The following financial statements from the Company’s 10-Q for the fiscal quarter ended March 30, 2025, formatted in iXBRL: (i) Consolidated Statements of Earnings, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Cash Flows, (v) Consolidated Statements of Equity, and (vi) Notes to Consolidated Financial Statements	—	—	—	—	X
104	Cover Page Interactive Data File (formatted in iXBRL and contained in Exhibit 101)	—	—	—	—	X

* Furnished herewith.

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

April 29, 2025


			STARBUCKS CORPORATION

			By:						/s/ Cathy R. Smith
									Cathy R. Smith
									executive vice president, chief financial officer
									Signing on behalf of the registrant and as principal financial officer

STARBUCKS CORP - Quarter Report: 2025 March (Form 10-Q)

Similar companies