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What changed in Starbucks's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Starbucks's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+344 added−446 removedSource: 10-K (2025-11-14) vs 10-K (2024-11-20)

Top changes in Starbucks's 2025 10-K

344 paragraphs added · 446 removed · 208 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

42 edited+25 added−23 removed50 unchanged
Biggest changeIn a limited number of international markets, we also use traditional franchising and include these stores in the results of operations from our other licensed stores. 8 Table of Contents Licensed store data for the fiscal year-ended September 29, 2024: Stores Open as of Stores Open as of Oct 1, 2023 Opened Closed Transfers Net Sep 29, 2024 North America: U.S. 6,701 232 (158) 2 76 6,777 Canada 481 26 (21) — 5 486 Total North America 7,182 258 (179) 2 81 7,263 International: Korea 1,870 144 (34) — 110 1,980 Latin America 1,649 139 (83) — 56 1,705 U.K. 911 87 (22) — 65 976 Turkey 676 46 — — 46 722 Taiwan 563 24 (16) — 8 571 Indonesia 581 30 (8) — 22 603 Thailand 474 40 (1) — 39 513 Philippines 447 33 (1) — 32 479 All Other 4,093 426 (150) — 276 4,369 Total International 11,264 969 (315) — 654 11,918 Total licensed 18,446 1,227 (494) 2 735 19,181 Other Revenues Other revenues primarily are recorded in our Channel Development segment and include sales of packaged coffee, tea, and ready-to-drink beverages to customers outside of our company-operated and licensed stores, as well as royalties received from Nestlé under the Global Coffee Alliance and other collaborative partnerships.
Biggest changeIn a limited number of international markets, we also use traditional franchising and include these stores in the results of operations from our other licensed stores. 8 Table of Contents Licensed store data for the fiscal year-ended September 28, 2025: Stores Open as of Stores Open as of Sep 29, 2024 Opened Closed Transfers (1) Net Sep 28, 2025 North America: U.S. 6,777 238 (202) — 36 6,813 Canada 486 14 (20) — (6) 480 Total North America 7,263 252 (222) — 30 7,293 International: Korea 1,980 134 (37) — 97 2,077 Latin America 1,705 115 (7) — 108 1,813 U.K. 976 56 (19) (113) (76) 900 Turkey 722 45 (5) — 40 762 Taiwan 571 33 (12) — 21 592 Indonesia 603 8 (14) — (6) 597 Thailand 513 39 (2) — 37 550 Philippines 479 43 (2) — 41 520 All Other 4,369 276 (274) 1 3 4,372 Total International 11,918 749 (372) (112) 265 12,183 Total licensed 19,181 1,001 (594) (112) 295 19,476 (1) Includes 113 licensed stores converted to company-operated stores in the first quarter of fiscal 2025 following the acquisition of 23.5 Degrees Topco Limited.
Our Audit and Compliance Committee works closely with the Risk Management Committee, led by Starbucks chief financial officer (“cfo”) and chief legal officer, to monitor and mitigate current and emerging labor and human capital management risks.
Our Audit and Compliance Committee works closely with the Risk Steering Committee, led by Starbucks chief financial officer (“cfo”) and chief legal officer, to monitor and mitigate current and emerging labor and human capital management risks.
However, trademarks are generally valid and may be renewed indefinitely as long as they are in use and/or their registrations are properly maintained. We own numerous copyrights for items such as product packaging, promotional materials, in-store graphics, and training materials. We also hold patents on certain products, systems, and designs, which have an average remaining duration of approximately thirteen years.
However, trademarks are generally valid and may be renewed indefinitely as long as they are in use and/or their registrations are properly maintained. We own numerous copyrights for items such as product packaging, promotional materials, in-store graphics, and training materials. We also hold patents on certain products, systems, and designs, which have an average remaining duration of approximately fifteen years.
Supply and price can be affected by multiple factors in the producing countries, including weather, water supply quality and availability throughout the coffee production chain, natural disasters, crop disease and pests, general increases in farm inputs and costs of production, inventory levels, and political and economic conditions. Climate change may further exacerbate many of these factors.
Supply and price can be affected by multiple factors in the producing countries, including weather and extreme weather events, water supply quality and availability throughout the coffee production chain, natural disasters, crop disease and pests, general increases in farm inputs and costs of production, inventory levels, and political and economic conditions. Climate change may further exacerbate many of these factors.
Licensed Stores Revenues from our licensed stores accounted for 12% of total net revenues in fiscal 2024. Licensed stores generally have a lower gross margin and a higher operating margin than company-operated stores. Under the licensed model, Starbucks receives a margin on branded products and supplies sold to the licensed store operator along with a royalty on retail sales.
Licensed Stores Revenues from our licensed stores accounted for 12% of total net revenues in fiscal 2025. Licensed stores generally have a lower gross margin and a higher operating margin than company-operated stores. Under the licensed model, Starbucks receives a margin on branded products and supplies sold to the licensed store operator along with a royalty on retail sales.
Mr. Niccol spent more than 25 years in leadership, marketing, and operations roles for some of the world’s most respected brands. Mr.
Niccol spent more than 25 years in leadership, marketing, and operations roles for some of the world’s most respected restaurant brands. Mr.
In addition, changes to such laws, regulations, rules, reporting obligations, and related compliance obligations could result in significant costs but are not expected to have a material effect on our capital expenditures, results of operations, and competitive position as compared to prior periods. 10 Table of Contents Available Information Starbucks Annual Report on Form 10-K reports, along with all other reports and amendments filed with or furnished to the Securities and Exchange Commission (the “SEC”), are publicly available free of charge on the Investor Relations section of our website at investor.starbucks.com as soon as reasonably practicable after these materials are filed with or furnished to the SEC.
In addition, changes to such laws, regulations, rules, reporting obligations, and related compliance obligations could result in significant costs but are not expected to have a material effect on our capital expenditures, results of operations, and competitive position as compared to prior periods. 10 Table of Contents Available Information Starbucks Annual Report on Form 10-K reports, along with all other reports and amendments filed with or furnished to the SEC, are publicly available free of charge on the Investor Relations section of our website at investor.starbucks.com as soon as reasonably practicable after these materials are filed with or furnished to the SEC.
Formed in 1985, Starbucks Corporation’s common stock trades on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “SBUX.” We purchase and roast high-quality coffees that we sell, along with handcrafted coffee, tea, and other beverages and a variety of high-quality food items through company-operated stores.
Formed in 1985, Starbucks Corporation’s common stock trades on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “SBUX.” We purchase and roast high-quality coffees that we sell, along with handcrafted coffee, tea, and other beverages and a variety of high-quality food items through company-operated stores (“stores” or “coffeehouses”).
Therefore, one of our core strategies is to invest in and support our partners to differentiate our brand, products, and services in the competitive specialty coffee market, including the following areas of focus: Oversight and Management We recognize the diversity of customers, partners, and communities and believe in creating an inclusive and equitable environment that represents a broad spectrum of backgrounds and cultures.
Therefore, one of our core strategies is to invest in, and support, our partners to differentiate our brand, products, and services in the competitive specialty coffee market, including the following areas of focus: Oversight and Management We believe in creating an inclusive and equitable environment that represents a broad spectrum of backgrounds and cultures that is reflective of our customers, partners, and communities.
In addition, by leveraging experiences gained through our stores and elsewhere, we continue to drive beverage, equipment, process, and technology innovation, including in our industry-leading digital platform. We strive to regularly offer consumers new, innovative coffee and other products in a variety of forms, across new categories, diverse channels, and alternative store formats.
In addition, by leveraging experiences gained through our stores and elsewhere, we continue to drive beverage, equipment, process, and technology innovation, including in our industry-leading digital platform. We strive to regularly offer consumers new, innovative coffee and other products in a variety of forms, across new categories and diverse channels.
Working under these principles, our Partner Resources Organization is tasked with managing employment-related matters, including recruiting and hiring, onboarding and training, compensation planning, performance management, and professional development. Our Board of Directors (the “Board”) and Board committees provide oversight on certain human capital matters, including our Inclusion and Diversity initiatives.
Working under these principles, our Partner Resources Organization is tasked with managing employment-related matters, including recruiting and hiring, onboarding and training, compensation planning, performance management, and professional development. Our Board of Directors (the “Board”) and Board committees provide oversight on certain human capital matters.
Pay Equity To be an employer of choice and maintain the strength of our workforce, we consistently assess the current business environment and labor market to refine our compensation and benefits programs and other resources available to our partners. Starbucks is committed to pay equity.
Pay Equity To be an employer of choice and maintain the strength of our workforce, we consistently assess the current business environment and labor market to refine our compensation and benefits programs and other resources available to our partners.
Brady Brewer joined Starbucks in 2001 and has served as chief executive officer, Starbucks International since April 2024, where he is responsible for the teams across Asia Pacific, Europe, Middle East, Africa, Japan, Latin America, and the Caribbean, as well as Global Channel Development and the Company’s international licensed partners.
Brady Brewer joined Starbucks in 2001 and has served as chief executive officer, Starbucks International since April 2024, where he is responsible for the teams across Asia Pacific, Europe, Middle East, Africa, Japan, Latin America, and the Caribbean, as well as Global Coffee Operations and the Company’s international licensed partners.
Revenues from our reportable operating segments as a percentage of total net revenues for fiscal 2024 were as follows: North America (75%), International (20%), and Channel Development (5%). Our North America and International segments include both company-operated and licensed stores. Our North America segment is our most mature business and has achieved significant scale.
Revenues from our reportable operating segments as a percentage of total net revenues for fiscal 2025 were as follows: North America (74%), International (21%), and Channel Development (5%). Our North America and International segments include both company-operated and licensed stores. Our North America segment is our most mature business and has achieved significant scale.
Item 1. Business General In this Annual Report on Form 10-K (“10-K” or “Report”) for the fiscal year ended September 29, 2024 (“fiscal 2024”), Starbucks Corporation (together with its subsidiaries) is referred to as “Starbucks,” the “Company,” “we,” “us,” or “our.” Starbucks is the premier roaster, marketer, and retailer of specialty coffee in the world, operating in 87 markets.
Item 1. Business General In this Annual Report on Form 10-K (“10-K” or “Report”) for the fiscal year ended September 28, 2025 (“fiscal 2025”), Starbucks Corporation (together with its subsidiaries) is referred to as “Starbucks,” the “Company,” “we,” “us,” or “our.” Starbucks is the premier roaster, marketer, and retailer of specialty coffee in the world, operating in 89 markets.
Total purchase commitments, together with existing inventory, are expected to provide an adequate supply of green coffee through fiscal 2025. We depend upon our relationships with coffee producers, outside trading companies, and exporters for our supply of green coffee.
Total purchase commitments, together with existing inventory, are expected to provide an adequate supply of green coffee through fiscal 2026. 9 Table of Contents We depend upon our relationships with coffee producers, outside trading companies, and exporters for our supply of green coffee.
Outside of the U.S., we have provided other innovative benefits to help address market-specific needs, such as providing interest-free loans to our U.K. partners to help cover rental deposits, mental health services in Canada, and, in China, an extra 14th Month Pay initiative, giving retail partners an additional month’s salary as a bonus on top of the 13th month pay that is customary in China, as well as a monthly housing subsidy for full-time Starbucks baristas and shift supervisors, and comprehensive health insurance coverage for parents of partners.
Outside of the U.S., we have provided other innovative benefits to help address market-specific needs, such as providing interest-free loans to our U.K. partners to help cover rental deposits, mental health services in Canada, and, in China, an extra 14th Month Pay initiative, giving retail partners an additional month’s salary as a bonus on top of the 13th month pay that is customary in China, as well as a monthly housing subsidy for full-time Starbucks baristas and shift supervisors, and comprehensive health insurance coverage for parents of partners. 4 Table of Contents Role-based Support To help our partners succeed in their roles, we emphasize ongoing training and development opportunities.
A large portion of our Channel Development business operates under a licensed model of the Global Coffee Alliance with Nestlé, while our global ready-to-drink businesses operate under collaborative relationships with PepsiCo, Inc., Tingyi-Ashi Beverages Holding Co., Ltd., Arla Foods amba, Nestlé, and others. 6 Table of Contents Revenue Components We generate the majority of our revenues through company-operated stores and licensed stores.
A large portion of our Channel Development business operates under a licensed model of the Global Coffee Alliance with Nestlé, while our global ready-to-drink businesses operate under collaborative relationships with PepsiCo, Inc., Nestlé, and others. 6 Table of Contents Revenue Components We generate the majority of our revenues through company-operated stores and licensed stores.
We also purchase a broad range of paper and plastic products, such as cups and cutlery, from several companies to support the needs of our retail stores as well as our manufacturing and distribution operations. We are also expanding our use of reusable packaging to reduce landfill waste.
We also purchase a broad range of paper and plastic products, such as cups and cutlery, from several companies to support the needs of our retail stores as well as our manufacturing and distribution operations.
The Starbucks Experience is built upon superior customer service, convenience, and a seamless digital experience as well as safe, clean, and well-maintained stores that reflect the personalities of the communities in which they operate, thereby building a high degree of customer loyalty.
The Starbucks Experience is built upon superior customer service through the Green Apron Service Model, convenience, and a seamless digital experience as well as warm and welcoming stores that reflect the personalities of the communities in which they operate, thereby building a high degree of customer loyalty.
Company-operated Stores Revenue from company-operated stores accounted for 82% of total net revenues during fiscal 2024.
Company-operated Stores Revenue from company-operated stores accounted for 83% of total net revenues during fiscal 2025.
Our Environmental, Partner, and Community Impact Committee annually reviews and assesses the effectiveness of the Company’s environmental and social 3 Table of Contents strategies, policies, practices, goals, programs, disclosure, and risks, including review of the Company’s annual global climate and social impact report.
The Board, through its committees, annually reviews and assesses the effectiveness of the Company’s 3 Table of Contents environmental and social strategies, policies, practices, goals, programs, disclosure, and risks, including review of the Company’s annual global impact report.
Brands, Inc., from 2015 to 2018, after having served as its President (2013 to 2014) and chief marketing and innovation officer (2011 to 2012). Mr. Niccol also served in leadership roles at Pizza Hut, another division of Yum! Brands from 2005 to 2011. Mr.
Brands, Inc., from 2015 to 2018, after having served as its President (2013 to 2014) and Chief Marketing and Innovation Officer (2011 to 2012). Mr. Niccol also served in leadership roles at Pizza Hut, another division of Yum! Brands from 2005 to 2011. Mr. Niccol currently serves on the Board of Directors of Walmart Inc., a NYSE-listed omni-channel retailer.
Approximately 5% of Starbucks partners in U.S. company-operated stores are represented by unions. We believe our efforts in managing our workforce have been effective, evidenced by low turnover, a strong culture, and active employee participation.
Approximately 158,000 employees were employed outside of the U.S., with approximately 153,000 in company-operated stores and the remainder in regional support operations. Partners in approximately 6% of Starbucks U.S. company-operated stores are represented by unions. We believe our efforts in managing our workforce have been effective, evidenced by low turnover, a strong culture, and active employee participation.
Our management and cross-functional teams also work closely to evaluate human capital management issues such as partner retention, workplace safety, harassment, and bullying, as well as to implement measures to mitigate these issues.
Our management and cross-functional teams also work closely to evaluate human capital management issues such as partner retention, workplace safety, harassment, and bullying, as well as to implement measures to mitigate these issues. Belonging at Starbucks At Starbucks, we are committed to creating environments where everyone is welcome and belongs.
Company-operated and Licensed Store Summary as of September 29, 2024: North America As a % of Total North America Stores International As a % of Total International Stores Total As a % of Total Stores Company-operated stores 11,161 61 % 9,857 45 % 21,018 52 % Licensed stores 7,263 39 % 11,918 55 % 19,181 48 % Total 18,424 100 % 21,775 100 % 40,199 100 % The mix of company-operated versus licensed stores in a given market generally varies based on several factors, including our ability to access desirable local retail space, the complexity, profitability, and expected ultimate size of the market for Starbucks, and our ability to leverage the support infrastructure within a geographic region.
Company-operated and Licensed Store Summary as of September 28, 2025: North America As a % of Total North America Stores International As a % of Total International Stores Total As a % of Total Stores Company-operated stores 11,018 60 % 10,496 46 % 21,514 52 % Licensed stores 7,293 40 % 12,183 54 % 19,476 48 % Total 18,311 100 % 22,679 100 % 40,990 100 % The mix of company-operated versus licensed stores in a given market generally varies based on several factors, including our ability to access desirable local retail space, the complexity, profitability, and expected ultimate size of the market for Starbucks, and our ability to leverage the support infrastructure within a geographic region.
Price is also impacted by trading activities in the arabica coffee futures market, including hedge funds and commodity index funds.
Price is also impacted by geopolitical conditions, including new and existing tariffs on coffee imports and other trade controls, and by trading activities in the arabica coffee futures market, including hedge funds and commodity index funds.
The price of coffee is subject to significant volatility. Although most coffee trades in the commodity market, high-altitude arabica coffee of the quality sought by Starbucks tends to trade on a negotiated basis at a premium above the “C” coffee commodity price. Both the premium and the commodity price depend upon the supply and demand at the time of purchase.
The price of coffee is subject to volatility and has steadily increased over the past five years with significant increases over the last two years. Although most coffee trades in the commodity market, high-altitude arabica coffee of the quality sought by Starbucks tends to trade on a negotiated basis at a premium above the “C” coffee commodity price.
Role-based Support To help our partners succeed in their roles, we emphasize continuous training and development opportunities. These include, but are not limited to, safety and security protocols, updates on new products and service offerings, and deployment of technologies.
These include, but are not limited to, role-based training for our retail hourly partners, safety and security protocols, updates on new products and service offerings, and deployment of technologies.
Kelly served as vice president, Partner Resources, supporting partners in our global markets. Brad Lerman joined Starbucks in April 2023 as executive vice president and general counsel and has served as executive vice president and chief legal officer since April 2024. In this role, he leads the Company’s Legal and Corporate Affairs organization. Prior to Starbucks, Mr.
Kelly served as vice president, Partner Resources, supporting partners in our global markets. Pilar Ramos joined Starbucks in November 2025 as executive vice president and chief legal officer. In this role, she leads the Company’s Law & Corporate Affairs organization. Prior to Starbucks, Ms.
We believe, based on the established relationship and historical performance of our suppliers, that the risk of non-delivery on such purchase commitments is remote. 9 Table of Contents To help ensure the future supply of high-quality green coffee and to reinforce our leadership role in the coffee industry, Starbucks operates ten farmer support centers, including our China Farmer Support Center located in the Yunnan Province of this high-growth market.
To help ensure the future supply of high-quality green coffee and to reinforce our leadership role in the coffee industry, Starbucks operates ten farmer support centers, including our China Farmer Support Center located in the Yunnan Province of this high-growth market.
In the U.S., Starbucks employed approximately 211,000 people, with approximately 201,000 in company-operated stores and the remainder in corporate support, store development, roasting, manufacturing, warehousing, and distribution operations. Approximately 150,000 employees were employed outside of the U.S., with approximately 144,000 in company-operated stores and the remainder in regional support operations.
As of September 28, 2025, Starbucks employed approximately 381,000 people worldwide. In the U.S., Starbucks employed approximately 223,000 people, with approximately 214,000 in company-operated stores and the remainder in corporate support, store development, roasting, manufacturing, warehousing, and distribution operations.
Lerman currently serves on the Board of Directors of McKesson Corporation, a NYSE-listed health care, pharmaceutical, and medical supply company. Segment Financial Information Segment information is prepared on the same basis that our ceo, who is our Chief Operating Decision Maker, manages the segments, evaluates financial results, and makes key operating decisions.
Segment Financial Information Segment information is prepared on the same basis that our ceo, who is our Chief Operating Decision Maker, manages the segments, evaluates financial results, and makes key operating decisions.
This work is grounded in the belief that we are at our best when we create inclusive, supportive, and welcoming environments, where we uplift one another with dignity, respect, and kindness. And we are hard at work uplifting our communities and building environments in our stores that are welcoming and safe.
This work is grounded in the belief that we are at our best when we create inclusive, supportive, and welcoming environments, where we uplift one another with dignity, respect, and kindness. We believe the strength of our workforce is one of the significant contributors to our success as a global brand that leads with purpose.
We have consistently made enhancements in wages in order to attract talent to support our growth strategy and to elevate the customer experience. To foster a stronger sense of ownership and align the interests of partners with shareholders, restricted stock units are provided to eligible non-executive partners under our broad-based stock incentive programs.
To foster a stronger sense of ownership and align the interests of partners with shareholders, restricted stock units are provided to eligible non-executive partners under our broad-based stock incentive programs. Furthermore, we offer competitive pay and a collection of benefits that are best in class.
We are continuing the expansion of our stores, particularly drive-thru formats that provide a higher degree of access and convenience, as well as other store formats that cater to a variety of customer needs. 7 Table of Contents Retail sales mix by product type for company-operated stores: Fiscal Year Ended Sep 29, 2024 Oct 1, 2023 Oct 2, 2022 Beverages 74 % 74 % 74 % Food 23 % 22 % 22 % Other (1) 3 % 4 % 4 % Total 100 % 100 % 100 % (1) “Other” primarily consists of serveware, packaged and single-serve coffees and teas, and ready-to-drink beverages, among other items.
We will continue to expand our coffeehouse portfolio to meet customers where they are with formats that provide a warm and welcoming environment, enable multiple opportunities to connect and gather, and provide attractive returns on invested capital. 7 Table of Contents Retail sales mix by product type for company-operated stores: Fiscal Year Ended Sep 28, 2025 Sep 29, 2024 Oct 1, 2023 Beverages 73 % 74 % 74 % Food 23 % 23 % 22 % Other (1) 4 % 3 % 4 % Total 100 % 100 % 100 % (1) “Other” primarily consists of serveware, packaged and single-serve coffees and teas, and ready-to-drink beverages, among other items.
To do this, we reach a broader pool of candidates and talent by prioritizing inclusivity in our recruitment practices, in partner engagement, and by continuing to foster inclusive leadership. Total Rewards We have demonstrated a history of investing in our workforce by offering competitive salaries and wages by continuously assessing the current business environment and labor market.
Total Rewards We have demonstrated a history of investing in our workforce by offering competitive salaries and wages by continuously assessing the current business environment and labor market. We have consistently made enhancements in wages in order to attract talent to support our growth strategy and to elevate the customer experience.
Information about our Executive Officers Name Age Position Brian Niccol 50 chairman and chief executive officer Rachel Ruggeri 55 executive vice president, chief financial officer Brady Brewer 51 chief executive officer, Starbucks International Sara Kelly 45 executive vice president, chief partner officer Brad Lerman 68 executive vice president, chief legal officer Brian Niccol joined Starbucks as its chairman and chief executive officer in September 2024.
Smith 62 executive vice president, chief financial officer Mike Grams 55 executive vice president, chief operating officer Brady Brewer 52 chief executive officer, Starbucks International Sara Kelly 46 executive vice president, chief partner officer Pilar Ramos 53 executive vice president, chief legal officer Brian Niccol joined Starbucks as chairman and chief executive officer in September 2024. Mr.
Further, we have formulated pay-equity principles, which provide equal footing, transparency, and accountability as best practices that help address known, systemic barriers to global pay equity. As of September 29, 2024, Starbucks employed approximately 361,000 people worldwide.
Starbucks is committed to fair pay principles to ensure partners are paid appropriately and equitably for their roles and the work they do, regardless of race, gender, or other protected categories. Further, we have formulated pay-equity principles, which provide equal footing, transparency, and accountability as best practices that help address known, systemic barriers to global pay equity.
The following list summarizes key benefits provided in the U.S., which is our largest and most mature market: • Comprehensive health insurance coverage is offered to partners working an average of 20 hours or more each week. • 100% upfront tuition coverage through the Starbucks College Achievement Plan for partners to earn a first-time bachelor’s degree online at Arizona State University is offered to partners working an average of 20 hours or more each week. • Our Future Roast 401(k) savings plan helps partners save for their financial goal through convenient payroll deductions.
Through the Starbucks College Achievement Plan (SCAP), Starbucks covers 100% of tuition for a first-time online bachelor’s degree from Arizona State University for partners working an average of 20 hours or more each week. • Grow their savings.
Company-operated store data for the fiscal year-ended September 29, 2024: Stores Open as of Stores Open as of Oct 1, 2023 Opened Closed Transfers Net Sep 29, 2024 North America: U.S. 9,645 611 (96) (2) 513 10,158 Canada 977 37 (17) — 20 997 Siren Retail 6 — — — — 6 Total North America 10,628 648 (113) (2) 533 11,161 International: China 6,804 855 (65) — 790 7,594 Japan 1,733 90 (14) — 76 1,809 U.K. 355 32 (9) — 23 378 All Other 67 4 — — 4 71 Siren Retail 5 — — — — 5 Total International 8,964 981 (88) — 893 9,857 Total company-operated 19,592 1,629 (201) (2) 1,426 21,018 Starbucks company-operated stores are typically located in high-traffic, high-visibility locations.
Company-operated store data for the fiscal year-ended September 28, 2025: Stores Open as of Stores Open as of Sep 29, 2024 Opened Closed (1) Transfers (2) Net Sep 28, 2025 North America: U.S. 10,158 509 (620) — (111) 10,047 Canada 997 45 (75) — (30) 967 Siren Retail 6 — (2) — (2) 4 Total North America 11,161 554 (697) — (143) 11,018 International: China 7,594 569 (154) — 415 8,009 Japan 1,809 87 (12) (1) 74 1,883 U.K. 378 44 (11) 113 146 524 All Other 71 7 (3) — 4 75 Siren Retail 5 — — — — 5 Total International 9,857 707 (180) 112 639 10,496 Total company-operated 21,018 1,261 (877) 112 496 21,514 (1) Includes 627 stores closed in the fourth quarter of fiscal 2025 as part of our “Back to Starbucks” restructuring plan.
Practices”), the Company’s third-party verification program and the cornerstone of our approach to ethical sourcing of coffee with over 98% of our coffee having been historically verified through C.A.F.E. Practices as ethically sourced. Human Capital Management We invest in the well-being – the mental, physical, and financial health – of every partner through our practices, policies, and benefits.
Refer to Note 18 , Restructuring, included in Item 8 of Part II of this 10-K, for further discussion. Human Capital Management We invest in the well-being – the mental, physical, and financial health – of every partner through our practices, policies, and benefits.
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Starbucks has always been a different kind of company – one deep with purpose, where we work together to create a positive impact in the world.
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In the fourth quarter of fiscal 2024, we announced our “ Back to Starbucks ” strategy, which was implemented with the goal to bring new and existing customers to our stores and business, and return to growth.
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With coffee at our core, we pursue ambitious goals for our partners (employees), our communities, and our planet, which we believe also contributes to the long-term sustainability of creating a thriving business powered by thriving people for a thriving planet and communities.
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The strategy includes supporting our green apron partners, enhancing the customer experience, reestablishing ourselves as the community coffeehouse, and strengthening the brand through product development, marketing, in-store and digital experience. This strategic reset provides us with the opportunity to assess the business and refocus our efforts, including capital allocation priorities, efficiency efforts, and store growth initiatives.
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Our work to uplift one another extends well beyond our partners to the communities where we do business around the world. We are committed to responsible and ethical sourcing led by Coffee and Farmer Equity Practices (“C.A.F.E.
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In the fourth quarter of fiscal 2025, we announced a restructuring plan involving the closure of coffeehouses, and the further transformation of our support organization, as part of the Company’s “Back to Starbucks” strategy.
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We believe the strength of our workforce is one of the significant contributors to our success as a global brand that leads with purpose.
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We assessed our existing store portfolio with respect to both whether coffeehouses had a viable path to offering the physical environment consistent with the brand and a clear path to financial performance and we closed, or plan to close, the coffeehouses that did not meet these criteria.
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Diversity, Equity, Inclusion, and Belonging As we create the future of Starbucks, we are continuing to work to improve the partner experience so our partners can thrive at work, individually, and together.
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In 2023, led by Starbucks partners, we reaffirmed this commitment by cementing “Belonging” as one of our company values. We are dedicated to being an inclusive, accessible and diverse company, with a deep commitment to opportunity for every one of our partners by making Starbucks the best job in retail and a great place to build a career.
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Core to this is taking steps to ensure that Starbucks is an inclusive, diverse, equitable, and accessible company—a place where all are welcome and where our partners know they belong. Under the leadership of our senior vice president of Talent and Inclusion and our executive leadership team, we remain committed to accountability at every level of the Company.
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Starbucks programs and benefits are open to every partner and designed to strengthen a culture of inclusion that values diverse perspectives and experiences – from strong partner networks to a focus on hiring internally for 90% of retail leadership roles. Our hiring and recruiting practices are competitive, fair and inclusive.
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We prioritize transparency with our partners, Inclusion and Diversity Executive Council, Partner Networks, Inclusion and Diversity Business Council, community leaders, customers, and stakeholders. At Starbucks, we are committed to creating environments where everyone is welcome and belongs. In 2024, we reaffirmed this commitment by cementing “Belonging” as one of our company values.
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They help us hire the strongest candidate for every job, every time. We offer industry-leading benefits, competitive pay, and opportunities for learning and development. When our partners feel good about their future – at Starbucks or beyond – they take care of our customers. Investing in them and prioritizing their experience creates value for everyone.
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These values have long been part of our culture, and we are working to build a more inclusive, equitable, accessible, and diverse company, to make substantial progress in the representation of our partners and to expand opportunities for our partners.
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Partners in the U.S., which is our largest and most mature market, can: • Grow their careers with us. We established a goal to fill 90% of retail leadership roles internally, creating a way for our hourly partners to build a career at Starbucks. • Get a college degree, on us.
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To further this: • we worked to reach a broader pool of candidates, prioritizing inclusivity in our recruitment, in partner engagement, and by continuing to foster inclusive leadership; • we established and expanded our mentorship program to make valuable guidance and networking opportunities available to all partners; and • we remained focused on addressing barriers impeding equal pay for equal work.
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In fiscal 2025, more than 230,000 partners received a Bean Stock grant giving them an ownership stake in Starbucks. • Obtain comprehensive healthcare coverage. We offer industry-leading health and wellbeing benefits for partners working an average of 20 hours or more each week. • Extend parental leave.
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At the end of fiscal 2024, our U.S. partner base is made up 70.9% female and 28.4% male. Additionally, in the U.S. diverse partners represent more than 51.9% of our retail team and more than 37.9% of our corporate roles. We are expanding workforce diversity to bring new perspectives and experiences that improve our business and workplace.
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Starbucks covers up to 18 weeks of fully paid leave for birth parents, and up to 12 weeks of fully paid leave for non-birth parents for partners working an average of 20 hours or more each week.
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Furthermore, we offer comprehensive, locally relevant and innovative benefits to all eligible partners.
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We periodically address a wide variety of topics such as achievable goal setting, giving and receiving constructive feedback, and effective engagement with communities and customers through the rollout of the Green Apron Service Model, a new foundational operating model that establishes repeatable, consistent, and scalable standards, across U.S company-operated coffeehouses.
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Partners can contribute pre-tax or Roth after-tax dollars, and Starbucks matches 5% of eligible contributions with immediate vesting in those matching contributions. 4 Table of Contents • 100% paid parental leave is available to new parents that welcome a child through birth, adoption, or foster placement and work an average of 20 hours or more each week. • A Partner and Family Sick Time program is provided and allows partners to accrue paid sick time based on hours worked and use that time for themselves or family members in need of care. • We view mental health as a fundamental part of our humanity and provide a comprehensive suite of related programs and benefits.
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It is designed to create deeper connections between partners and customers by enabling partners to deliver consistent, high-quality experiences with warmth and care. The model includes new routines and tools that give partners more time to focus on craft and connection, supported by technology that improves order flow and speed of service.
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These include a free subscription to Headspace, an online application that enables guided meditation, and 20 free mental health therapy or coaching sessions annually with Lyra.
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Information about our Executive Officers Name Age Position Brian Niccol 51 chairman and chief executive officer Cathy R.
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Training provided through our Pour Over sessions, which are a series of inspiring talks with thought leaders to help partners understand how to bring the Starbucks Experience to life, include a wide variety of topics such as achievable goal setting, giving and receiving constructive feedback, and effective engagement with customers and communities.
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Cathy R. Smith joined Starbucks in March 2025 as executive vice president, chief financial officer, after having served as Executive Vice President, Chief Financial Officer and Treasurer of Nordstrom, Inc., a department store chain, since 2023. From 2020 to 2023, Ms. Smith served as Chief Financial and Administrative Officer for Bright Health Group, Inc., a health insurance company.
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To help further promote an inclusive culture and to better serve our customers, we encourage U.S.-based partners to enroll in the To Be Welcoming courses we created in partnership with Arizona State University to address different forms of bias and discrimination.
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From 2015 to 2020, Ms. Smith served as the Chief Financial Officer for Target Corporation, a retail company. Previously, Ms.
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We’ve achieved and maintained racial and gender pay equity for partners in the U.S. who are performing similar work, and we’re working toward achieving gender pay equity for Starbucks partners who are performing similar work in all of our company-operated markets globally.
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Smith served as Chief Financial Officer for Express Scripts Holding Company, a pharmacy benefit manager company, from 2014 to 2015, for Walmart International, a retail company, from 2010 to 2014, and for GameStop Corporation, an electronics retail company, from 2009 to 2010. Ms.
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Niccol currently serves on the Board of Directors of Walmart Inc., a NYSE-listed omni-channel retailer. 5 Table of Contents Rachel Ruggeri joined Starbucks in 2001 as a member of the accounting team and was named executive vice president and chief financial officer in 2021.
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Smith currently serves on the board of directors for PPG Industries, Inc., a manufacturer and distributor of paintings and coatings, and Baxter International, Inc., a healthcare company. Previously, Ms. Smith served as a director for Dick’s Sporting Goods, Inc. Ms.
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In August 2024, she served as interim chief executive officer during Starbucks recent chief executive officer transition. In her role as chief financial officer, Ms. Ruggeri is responsible for the global finance function for Starbucks, which includes developing and executing the financial strategies that enable the long-term growth of the Company.
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Smith holds an undergraduate degree from the University of California, Santa Barbara and an MBA from the University of Southern California. 5 Table of Contents Mike Grams joined Starbucks in February 2025 as executive vice president, North America chief coffeehouse officer, and has served as executive vice president, chief operating officer since June 2025. Prior to joining Starbucks, Mr.
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Prior to her promotion in 2021, she served as senior vice president of Americas with responsibility for the retail portfolio across the segment, including company-operated and licensed stores from 2020 to 2021.
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Grams spent nearly thirty years at Taco Bell Corp. where he held various leadership positions, including President and Chief Operating Officer from 2020 to December 2024, Global Chief Operating Officer and General Manager, North America from 2017 to 2020 and Chief Operating Officer and Chief Development Officer from 2015 to 2019.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur international operations are also subject to additional inherent risks of conducting business abroad, such as: • changes or uncertainties in economic, legal, regulatory, social, and political conditions in our markets, as well as negative effects on U.S. businesses due to increasing anti-American sentiment in certain markets; • restrictive actions of foreign or U.S. governmental authorities affecting trade and foreign investment, especially during periods of heightened tension between the U.S. and such foreign governmental authorities, including protective measures such as export and customs duties and tariffs, government intervention favoring local competitors, and restrictions on the level of foreign ownership; • delays in store openings for reasons beyond our control, competition with locally relevant competitors, or a lack of desirable real estate locations available for lease at reasonable rates, any of which could keep us from meeting annual store opening targets and, in turn, negatively impact net revenues, operating income, and earnings per share. • difficulty in staffing, developing, and managing foreign operations and supply chain logistics, including ensuring the consistency of product quality and service, due to governmental actions affecting supply chain logistics, distance, language, and cultural differences, as well as challenges in recruiting and retaining high-quality employees in local markets; • economic or trade sanctions affecting our ability to source products or conduct business in one or more of the markets in which we operate; • in developing economies, the growth rate in the portion of the population achieving sufficient levels of disposable income may not meet our projections; • interpretation and application of laws and regulations, including those relating to taxes, tariffs, labor, merchandise, anti-bribery, privacy, and environmental, social, and governance issues; • local laws, policies, and conditions that make it more expensive and complex to negotiate with, retain, or terminate employees; • labor strikes or work stoppages resulting from geopolitical instability or social unrest affecting one or more of the markets in which we operate; • local regulations, health guidelines, and safety protocols affecting our operations; • the enforceability of intellectual property and contract rights; • foreign currency exchange rate fluctuations or requirements to transact in specific currencies; • limitations on the repatriation of funds and foreign currency exchange restrictions due to current or new U.S. and international regulations; and 18 Table of Contents • import or other business licensing requirements.
Biggest changeOur international operations are also subject to additional inherent risks of conducting business abroad, such as: • Uncertainty in economic, legal, regulatory, social, and political conditions, including rising anti-American sentiment in certain markets; • Governmental trade and investment restrictions, such as tariffs, export duties, ownership limits, and favoritism toward local competitors; • Economic or trade sanctions limiting product sourcing or business operations; • Delays in store openings due to external factors, competition, or limited access to affordable real estate, potentially impacting financial performance; • Operational and supply chain challenges abroad, including staffing, logistics, product consistency, and cultural or language barriers; • Slower-than-expected growth in disposable income in developing economies; • Complex and varying interpretations of laws and regulations, including those related to taxes, labor, privacy, and responsible business matters; • Local employment laws increasing the cost and complexity of hiring and termination; • Labor disruptions due to geopolitical instability or social unrest; • Health and safety regulations affecting store operations; • Challenges in enforcing intellectual property and contract rights; • Foreign currency fluctuations and restrictions on currency use or fund repatriation; and • Licensing and import requirements that may hinder business operations.
Our operating results have been, and will continue to be, subject to a number of macroeconomic and other factors, many of which are largely outside our control.
Our operating results have been, and will continue to be, subject to a number of other macroeconomic and other factors, many of which are largely outside our control.
Failure to meet our announced guidance or market expectations going forward, particularly with respect to our operational and financial results, shareholder returns, and expectations regarding the success of our Back to Starbucks plan and related guidance, whether due to our assumptions not being met or the impact of various risks and uncertainties, will likely result in a decline and/or increased volatility in the market price of our stock.
Failure to meet announced guidance or market expectations going forward, particularly with respect to our operational and financial results, shareholder returns, and expectations regarding the success of our Back to Starbucks plan and related guidance, whether due to our assumptions not being met or the impact of various risks and uncertainties, will likely result in either or both a decline in or increased volatility in the market price of our stock.
The loss of any of our executive officers, including our chief executive officer or other key senior management personnel, could harm our business. Our success also depends substantially on the contributions and abilities of our retail store employees upon whom we rely to give customers a superior in-store experience and elevate our brand.
The loss of any of our executive officers, including our chief executive officer or other key senior management personnel, could harm our business. Our success also depends substantially on the contributions and abilities of our retail store employees we rely on to give customers a superior in-store experience and elevate our brand.
Our ability to attract and retain corporate, retail, and other personnel is also acutely impacted in certain international and domestic markets where the competition for a relatively small number of qualified 21 Table of Contents employees is intense or in markets where large high-tech companies are able to offer more competitive salaries and benefits.
Our ability to attract and retain corporate, retail, and other personnel is also acutely impacted in certain international and domestic markets where the competition for a relatively small number of qualified employees is intense or in markets where large high-tech companies are able to offer more competitive salaries and benefits.
Item 1A. Risk Factors 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, and the consolidated financial statements and related notes.
Risk Factors 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.
Our ability to do so has been and may continue to be impacted by challenges in the labor market (which has experienced, and may continue to experience, wage inflation and labor shortages), our position with respect to unions and the unionization of partners, increased employee turnover, changes in availability of our workforce and a shift toward remote or hybrid work arrangements.
Our ability to do so has been and may continue to be impacted by challenges in the labor market (which has experienced, and may continue to experience, wage inflation and labor shortages), our position with respect to unions and the unionization of partners, increased employee turnover, changes in availability of our workforce, and shifts in remote or hybrid work arrangements.
Moreover, many of the foregoing risks are particularly acute in developing markets, which are important to our long-term growth prospects. An inability to effectively manage the risks associated with our international operations could adversely affect our business and financial results. Our reliance on key business partners may adversely affect our business and operations.
Moreover, many of the foregoing risks are particularly acute in developing markets, which are important to our long-term growth prospects. An inability to effectively manage the risks associated with our international operations could adversely affect our business performance and financial results. 14 Table of Contents Our reliance on key business partners may adversely affect our business and operations.
Such job actions and work stoppages have the potential to negatively impact our operations, third-party providers upon whom we rely to deliver product, our sales and customer flow in impacted locations, our costs, and can also have a negative impact on our reputation and brand.
Such work stoppages and other disruptions have the potential to negatively impact our operations, third-party providers upon whom we rely to deliver product, our sales and customer flow in impacted locations, our costs, and can also have a negative impact on our reputation and brand.
Additionally, our position with respect to unions and the unionization of partners could negatively impact how our brand is perceived and could have material adverse effects on our business, including on our financial results.
Additionally, while we respect the rights of partners to organize, our position with respect to unions and the unionization of partners could negatively impact how our brand is perceived and could have material adverse effects on our business, including on our financial results.
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.
Risks Related to Cybersecurity, Data Privacy, and Information Technology 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.
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. The availability and prices of coffee beans and other commodities are subject to significant volatility.
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. The availability and price of coffee beans and other commodities are highly volatile.
The risks described below are not the only risks facing the Company. 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.
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.
Our global business strategy, including our plans for new stores, branded products, and other initiatives, relies significantly on a variety of business partners, including licensees, joint venture partners, third-party manufacturers, distributors, and retailers, particularly for our entire global Channel Development business.
Our global business strategy, including our plans for new stores, branded products, and other initiatives, relies significantly on a variety of business partners, including licensees, joint venture partners, third-party manufacturers, distributors, and retailers, particularly for our entire global Channel Development business. These partners are often authorized to use our logos and deliver branded products directly to customers.
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. We have been, and in the future may be, subject to litigation and other legal proceedings that may adversely affect our business.
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. 19 Table of Contents We are, and may continue to be, subject to litigation and legal proceedings that could adversely affect our business.
They also present the potential to disrupt our current operational model by affecting our ability to fully implement operational changes to enhance our efficiency and adapt to changing business needs. Moreover, we have experienced job actions in some company-operated stores.
They also present the potential to disrupt our current operational model by affecting our ability to fully implement operational changes to enhance our efficiency and adapt to changing business needs. Moreover, we have experienced work stoppages and other disruptions caused by union activities or organizing efforts in some company-operated stores.
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.
Risks Related to Macroeconomic Conditions Our financial condition and results of operations have been, and may continue to be, adversely affected by a number of macroeconomic and other factors, many of which are largely outside our control. As a retailer reliant on discretionary spending, our financial results are sensitive to macroeconomic conditions.
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.
Failure to meet market expectations for our financial performance or any announced guidance 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. 16 Table of Contents We have in the past failed, and may in the future fail, to meet announced guidance or market expectations, which has adversely affected, and could in the future adversely affect, the market price of our stock.
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.
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.
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 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. Our brand names, trademarks, and other intellectual property are critical assets that support brand awareness and product development across domestic and international markets.
The law places limitations on unilateral actions taken with respect to employees who are represented by unions because, in certain circumstances, the law requires the employer to notify and to bargain with the union prior to making certain operational or other changes that may affect employee wages, hours, or other terms and conditions of employment.
These risks could also present the potential to disrupt our current operational model by affecting our ability to fully implement operational changes to enhance our efficiency and adapt to changing business needs. 17 Table of Contents The law places limitations on unilateral actions taken with respect to employees who are represented by unions because, in certain circumstances, the law requires the employer to notify and to bargain with the union prior to making certain operational or other changes that may affect employee wages, hours, or other terms and conditions of employment.
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. Our continued success depends on our ability to attract and retain customers.
Any resulting impairment charges could materially affect our financial 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. Our success depends on attracting and retaining customers.
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.
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.
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 effectively managing growth, which may have an adverse impact on our business and financial results.
Risks Related to Our Business We may not be successful in implementing important strategic initiatives (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.
Unfavorable economic conditions could also adversely affect our suppliers and licensees, who in turn could experience cash flow problems, more costly or unavailable financing, credit defaults, and other financial hardships. This could lead to supplier or licensee insolvency, increase our bad debt expense, or cause us to increase the levels of unsecured credit that we provide to suppliers and licensees.
Furthermore, unfavorable economic conditions could also adversely affect our suppliers and licensees, who in turn could experience cash flow problems, more costly or unavailable financing, credit defaults, and other financial hardships.
Starting in September 2021, Starbucks partners at a number of company-operated stores sought union representation through elections conducted by the National Labor Relations Board. Unions have secured representation rights at hundreds of our more than 10,000 U.S. company-operated stores, with potentially more to follow, and Starbucks is engaged in collective bargaining for initial collective bargaining agreements for these stores.
Unions have secured representation rights at around 6% of our more than 10,000 U.S. company-operated stores, with potentially more to follow, and Starbucks has been engaged in collective bargaining for initial collective bargaining agreements for these stores.
Additionally, if we are unable to respond to consumer demand for healthy beverages and foods, or our competitors respond more effectively, this could have a negative effect on our business.
If we are unable to respond to consumer demand for healthy beverages and foods, or our competitors respond more effectively, this could have a negative effect on our business. However, our competitive strategies may not always succeed and could have unintended consequences. Declines in consumer demand—due to shifting preferences, economic pressures, or changes in routines—could also negatively affect our business.
See Note 16 , Commitments and Contingencies, to the consolidated financial statements included in Item 8 of Part II of this 10-K for information regarding certain legal proceedings in which we are involved. 25 Table of Contents 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.
See Note 16 , Commitments and Contingencies, to the consolidated financial statements included in Item 8 of Part II of this 10-K for information regarding certain legal proceedings in which we are involved.
Reported incidents involving food- or beverage-borne illnesses, tampering, adulteration, contamination, or mislabeling, whether or not accurate, could harm our business.
Additionally, inconsistent use or inadequate protection of our brand and intellectual property could erode consumer trust and materially affect our financial results. Reported incidents involving food- or beverage-borne illnesses, tampering, adulteration, contamination, or mislabeling, whether or not accurate, could harm our business.
In addition, we incur substantial startup expenses each time we open a new store, and it takes time to ramp up the sales and profitability of a new store, during which ramp-up period costs may be higher as we train new partners and build up a customer base.
Store development costs have risen due to construction labor inflation and increased material and equipment expenses. Each new store involves substantial startup costs and a ramp-up period during which profitability may be delayed as we train partners and build a customer base.
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.
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.
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.
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.
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. We actively engage in discussions with our shareholders regarding further strengthening our Company and creating long-term shareholder value. This ongoing dialogue can include certain divisive activist tactics, which can take many forms.
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. We regularly engage with shareholders to strengthen the Company and enhance long-term value. However, activist campaigns can result in significant costs, including legal expenses and diversion of management and Board attention.
In addition, we cannot ensure that licensees and other third parties who hold licenses to our intellectual property will not take actions that adversely affect the value of our intellectual property.
Additionally, licensees and other third parties who hold licenses to our intellectual property may take actions that diminish the value of our intellectual property, further exposing us to reputational and financial risk.
These risks could adversely affect our business and operating results. 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.
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. Our policies and procedures are designed to ensure compliance with all applicable laws, regulations, and reporting requirements, including those imposed by the SEC, Nasdaq, and foreign jurisdictions.
Additionally, our food, beverage, and other products are sourced from a wide variety of domestic and international business partners in our supply chain operations and, in certain cases, are produced or sourced by our licensees directly. We rely on these suppliers to provide high-quality products and to comply with applicable laws.
We rely on a broad network of domestic and international suppliers to provide high-quality products in compliance with applicable laws, and in certain cases, products are sourced by our licensees directly. As we update our fresh and prepared food offerings, sourcing from regions with limited infrastructure or political instability may present additional challenges.
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.
Our business is subject to evolving corporate governance and public disclosure regulations and expectations, including with respect to responsible business matters, that could expose us to numerous risks. We are subject to evolving and increasingly complex laws and regulations from various authorities and regulatory bodies. These rules—often inconsistent across jurisdictions—can increase compliance uncertainty and administrative costs.
Changes in applicable environmental laws and regulations, including expanded or additional regulations and associated costs to limit carbon dioxide and other greenhouse gas emissions, to discourage the use of plastic, or to limit or impose additional costs on commercial water use, may result in increased compliance costs, capital expenditures, incremental investments, and other financial obligations for us and our business partners, which could affect our profitability.
Failure to comply with such laws and regulations could result in the imposition of civil or criminal liability. Environmental regulations are evolving, with new or expanded rules targeting carbon emissions, plastic use, and commercial water consumption. These changes may lead to higher compliance costs, capital expenditures, and other financial obligations for us and our partners, potentially affecting profitability.
These risks include, but are not limited to, the following: 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 may not be successful in our marketing strategies, promotional and advertising plans, and pricing strategies.
Risks Related to Brand Relevance and Brand Execution Our success depends substantially on the value of our brand, and failure to preserve its 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.
We rely on a combination of trademarks, copyrights, service marks, trade secrets, patents, and other intellectual property rights to protect our brand and branded products. We have registered certain trademarks and have other trademark registrations pending in the U.S. and certain foreign jurisdictions.
We protect these assets through a combination of trademarks, copyrights, service marks, trade secrets, patents, and other intellectual property rights. While we have registered certain trademarks in the U.S. and abroad, not all of our trademarks are registered in every market where we operate or may operate in the future, and some may never be registered.
Such changes have impacted, and could continue to impact, customer routines, employer “work-from-home” policies, and consumer behavior, including consumers’ ability or willingness to spend discretionary income on our products. 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.
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.
However, the product quality and service they deliver may still be diminished by any number of factors beyond our control, including financial constraints or solvency issues, adherence to sanitation protocols and guidance, labor shortages, and other factors. We do not have direct control over our business partners and may not have visibility into their practices.
To maintain consistent customer experience, we provide training and oversight to certain partners; however, factors beyond our control—such as financial instability, labor shortages, or noncompliance with sanitation protocols—may affect the quality of their service and products. We do not have direct control over these partners and may lack visibility into their operations.
In China, the Personal Information Protection Law (“PIPL”) has established personal information processing rules, data subject rights, and obligations for personal information processors, among other things. In addition to the PIPL, China’s Data Security Law regulates data processing activities associated with personal and non-personal data. Noncompliance with these laws may result in significant civil and criminal penalties.
China’s Personal Information Protection Law (PIPL) and Data Security Law similarly regulate personal and non-personal data processing activities and establish data subject rights and obligations for personal information processors, with civil and criminal liabilities for violations.
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.
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.
Privacy and data protection laws, such as those referenced above, may impact Starbucks operations and new business models, such as Starbucks Digital Solutions, which rely on Starbucks functioning as controller of customer personal information in licensed markets. As such, Starbucks may be primarily responsible for compliance with privacy and data protection laws in the markets served by participating licensees.
Some such laws include private rights of action. These state laws require ongoing investment in compliance infrastructure. Privacy and data protection laws, such as those referenced above, may also affect emerging business models, such as Starbucks Digital Solutions, which rely on Starbucks acting as a data controller in licensed markets.
The specialty coffee market is intensely competitive, including with respect to product quality, innovation, service, convenience (such as delivery service and mobile ordering), and price, and we face significant and increasing competition in all of these areas in each of our channels and markets. Accordingly, we do not have leadership positions in all channels and markets.
The specialty coffee market is highly competitive across product quality, innovation, service, convenience (e.g., delivery and mobile ordering), and price. We face increasing competition in all channels and markets and do not hold leadership positions in every segment. In the U.S., large quick-service competitors offering coffee, tea, and other competitive products may reduce customer traffic and transaction value.
Risks Related to Environmental, Social, and Governance Matters Climate change may have an adverse impact on our business. We recognize that there are inherent climate-related risks wherever business is conducted.
Risks Related to Responsible Business Matters Climate change may have an adverse impact on our business. We recognize that climate-related risks are inherent to global business operations. Climate change can affect the supply and pricing of coffee and other non-coffee inputs due to weather volatility, water scarcity, and other environmental factors in producing regions.
Complex local, state, national, foreign, and international laws and regulations apply to the collection, use, retention, protection, disclosure, transfer, and other processing of personal data.
We are subject to a complex and rapidly evolving landscape of local, national, and international laws and regulations governing the collection, use, retention, protection, disclosure, transfer, and other processing of personal data. These laws and regulations are frequently amended, reinterpreted, and increasingly enforced, often resulting in heightened compliance obligations, litigation risk, and operational costs.
Other newly enacted and proposed privacy and data protection laws in other jurisdictions served by Starbucks and its licensees may impose similar requirements, including restrictions on cross-border data transfers and stringent safeguards on personal and non-personal data. Such laws may impact our business operations and increase the cost and expense of compliance.
Other jurisdictions served by Starbucks and its licensees are enacting or proposing comparable laws, including restrictions on cross-border data transfers and enhanced data safeguards, which may increase compliance costs and affect business operations. In the U.S., the California Consumer Privacy Act (CCPA) and numerous other state privacy laws impose disclosure obligations and grant consumers rights over their personal data.
Similarly, increases in the cost of, or lack of availability of, whether due to supply shortages, or delays or interruptions in the processing of, plant-based alternatives could have a material adverse impact on our profitability. 19 Table of Contents Our supply chain may be unable to fully support current and future business needs.
Price increases or supply disruptions—whether due to shortages, processing delays, tariffs, or other factors—could materially affect our profitability, particularly in international markets. Our supply chain may be unable to fully support current and future business needs. Even without acute disruptions, our supply chain may not fully meet current or future business needs.
Many of our information technology systems (whether cloud-based or hosted in proprietary servers), including those used for our point-of-sale, web and mobile platforms, online and mobile payment systems, delivery services, rewards programs, and administrative functions, contain personal, financial, or other information that is entrusted to us by our customers, business partners, and employees.
Our information technology systems and those of our third-party service providers, business partners, and licensees—including those supporting point-of-sale, mobile platforms, payment systems, delivery, rewards, and administrative functions—store personal, financial, and confidential data from customers, employees, business partners, and licensees, as well as proprietary business information.
Similar to many other retail companies and because of the prominence of our brand, we have in the past experienced, and we expect to continue to experience, cyber-attacks, including phishing, and other attempts to breach, or gain unauthorized access to, our systems and databases.
Like other prominent retail companies, we have experienced cyber-attacks (e.g., phishing) and other attempts to breach or gain unauthorized access to our systems, as have our third-party service providers, business partners, and licensees. We expect such threats to continue and evolve, especially with the rapid evolution and increased adoption of artificial intelligence.
Any material interruption in our supply chain (such as material disruption of roasted coffee supply), whether due to the casualty loss of any of our roasting plants, interruptions in service by our third-party logistic service providers or common carriers that ship goods within our distribution channels, trade restrictions (such as increased tariffs or quotas, embargoes, or customs restrictions), pandemics, social or labor unrest, labor shortages, natural disasters, or political disputes and military conflicts that cause a material disruption in our supply chain could have a negative material impact on our business and our profitability.
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. Any material disruption to our supply chain—such as the loss of a roasting plant, logistics interruptions, trade restrictions, pandemics, labor shortages, natural disasters, or geopolitical conflicts—could materially impact our business and profitability.
Further, the insolvency of any of our licensees could result in disrupted operations or our exit from a particular market, and negatively impact our reputation. Economic conditions in the U.S. and international markets have adversely affected, and could continue to adversely affect, our business and financial results.
This could lead to supplier or licensee insolvency, increase our bad debt expense, or cause us to increase the levels of unsecured credit that we provide to suppliers and licensees. Additionally, the insolvency of any of our licensees could result in disrupted operations or our exit from a particular market and negatively impact our reputation.
Furthermore, we continue to expand convenience-led formats, which depend heavily on our mobile ordering capabilities. Any failure, inadequacy, or interruption of these systems could harm our ability to effectively operate and grow our business and could adversely affect our financial results.
Our growth initiatives—particularly those involving digital engagement and convenience-led formats—depend heavily on the reliability and performance of these systems. Any failure, inadequacy, inefficiency, or interruption could disrupt operations and adversely affect financial results. Our contractual and operational safeguards may not be effective in preventing the failure of these systems or services to operate effectively and be available.
We have in the past failed, and may in the future fail, to meet our announced guidance or market expectations, which has adversely affected, and could in the future adversely affect, the market price of our stock. Our guidance is based on certain assumptions, which may or may not prove to be correct.
Any guidance we provide is based on certain assumptions, which may or may not prove to be correct.
Any one or more of the factors listed below or described elsewhere in this risk factors section could have a material adverse impact on our business, financial condition, or results of operations: • increases in real estate costs in certain domestic and international markets; • disruptions to our supply chain; • changes in climate, including changes to the frequency or severity of extreme weather events, that impact the price and availability or cost of goods and services, energy, and other materials throughout our supply chain; • changes in governmental rules and approaches to taxation; • adverse outcomes of litigation; • inflationary pressures and changes in prevailing interest rates; • severe weather or other natural or man-made disasters affecting a large market or several closely located markets that may temporarily or for extended periods of time affect our retail business in such markets; • government shutdowns or the risk of government shutdowns, as well as the impact or expected impact of elections, both in the U.S. and in other markets around the world; • especially in our largest markets, including the U.S. and China, labor discord or disruption, geopolitical events, war, terrorism (including incidents targeting us), political instability, acts of public violence, boycotts, increasing anti- 20 Table of Contents American sentiment in certain markets, or hostilities, social unrest, or health pandemics that lead to avoidance of public places or restrictions on public gatherings such as in our stores; and • fluctuations in foreign currency exchange rates.
Any one or more of the factors listed below could have a material adverse impact on our business, financial condition, or results of operations: • Rising real estate costs in certain domestic and international markets; • Supply chain disruptions; • Climate change and extreme weather affecting input costs and availability; • Changes in tax laws and government regulations, such as the One Big Beautiful Bill Act, enacted in the U.S. in July 2025; • Adverse litigation outcomes; • Inflation and interest rate fluctuations; • Natural or man-made disasters disrupting major markets; • Government shutdowns and election-related impacts globally, including regime change and political and civil unrest; • Terminations of, or changes in, existing trade agreements among the countries in which we operate; • Tariffs imposed on commodities or goods, including recent tariffs imposed or threatened to be imposed by the U.S. on other countries, and any retaliation measures taken by such countries; • Labor unrest, geopolitical instability, terrorism, anti-American sentiment, or public health crises—especially in key markets; and • Foreign currency exchange rate volatility.
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.
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.
The supply and price of coffee we purchase can also be affected by multiple factors in the producing countries, such as weather, water supply quality and availability throughout the coffee production chain, natural disasters, crop disease and pests, general increases in farm input costs and costs of production, inventory levels, political and economic conditions, and the actions of certain organizations and associations that have historically attempted to influence prices of green coffee through agreements establishing export quotas or by restricting coffee supplies.
Coffee supply and pricing are influenced by factors in producing countries, including weather and extreme weather events, water availability, natural disasters, crop disease, input costs, inventory levels, political and economic conditions, and actions by organizations seeking to influence global prices. Climate change may intensify these risks—for example, droughts or frosts in Brazil have in the past driven price increases.
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.
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 11 Table of Contents marketing environment. Decisions to collaborate or refrain from collaborating with certain parties may impact our brand image and, consequently, our financial performance.
Risks Related to Operating a Global Business We are highly dependent on the financial performance of our North America operating segment. Our financial performance is highly dependent on our North America operating segment, which comprised approximately 75% of consolidated total net revenues in fiscal year 2024.
If costs exceed projections, closures last longer than planned, or remodeled stores underperform, we may not achieve expected returns, which could negatively impact our financial results. Risks Related to Operating a Global Business We are highly dependent on the financial performance of our North America operating segment.
The growth of our business relies on the ability of our licensee partners to implement our growth platforms and product innovations.
Our growth depends on the ability of licensee partners to execute our strategies and implement our growth platforms and product innovations. Success also relies on negotiating, maintaining, and enforcing commercial agreements, and on partner performance under those agreements. International licensees may face legal or financial constraints that limit expansion.
This premium depends upon, among other factors, the supply and demand at the time of purchase, and the amount of the premium can vary significantly. Increases in the “C” coffee commodity price increase the price of high-quality arabica coffee and impact our ability to enter into fixed-price purchase commitments.
We purchase, roast, and sell high-quality arabica coffee, which typically trades at a premium above the “C” commodity price. This premium varies based on supply and demand and can significantly impact our ability to secure fixed-price contracts. We often enter supply agreements with defined quality, quantity, and delivery terms, but with pricing tied to future “C” market rates.
A widespread Starbucks product recall could result in significant losses due to the costs of a recall, the destruction of product inventory, and lost sales due to the unavailability of product for a period of time, and could also subject us to product liability claims and negative publicity, all of which could materially harm our business.
Confirmed food-safety issues may also result in product recalls. A widespread product recall could lead to significant financial losses from recall costs, inventory destruction, lost sales, and reputational damage. Declines in customer traffic due to safety concerns, negative publicity, or store closures could adversely affect our operations.
Our customers may have less money for discretionary purchases and may stop or reduce their purchases of our products or switch to our or our competitors’ lower-priced products as a result of various factors, including job loss, inflation, changes in prevailing interest rates, higher taxes, reduced access to credit, changes in federal economic policy, a global health pandemic, international trade disputes, or geopolitical instability.
A prolonged downturn or slow recovery may reduce consumer spending, leading to lower demand or shifts to lower-priced products. Factors such as job loss, inflation, interest rate changes, taxation, credit access, public health crises, trade disputes, and geopolitical instability can all impact consumer behavior, including spending and routines, potentially affecting demand for our products.
Our failure to comply with applicable laws and regulations or other obligations to which we may be subject relating to personal data, or to protect personal data from unauthorized access, use, or other processing, could result in enforcement actions and regulatory investigations against us, claims for damages by customers and other affected individuals or parties, or fines and damage to our brand reputation, any of which could have a material adverse effect on our operations, financial performance, and business.
Claims we have failed to comply with applicable privacy and data protection laws or to adequately safeguard personal data, even if unfounded, may result in regulatory investigations, enforcement actions, litigation (including class actions), reputational harm, and financial penalties, any of which could materially affect our operations and financial performance.
Failures by our licensees or business providers to comply with the laws or regulations of their markets, or to otherwise meet the standards consumers associate with our brand, may negatively impact our business.
We source products from a broad network of domestic and international business partners, and in some cases, licensees source products independently. We do not monitor the quality of non-Starbucks products served by authorized foodservice operators. Failures by business partners to comply with applicable laws or meet brand standards may negatively impact our business.
Removed
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.
Added
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.
Removed
Risks Related to Our Business • 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.
Added
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.
Removed
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. 11 Table of Contents 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.
Added
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.
Removed
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.
Added
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.
Removed
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.
Added
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.
Removed
Risks Related to Competition • We face intense competition in each of our channels and markets, which could lead to reduced profitability.
Added
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 brand, marketing, promotional, advertising, and pricing strategies.
Removed
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.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeItem 1C. Cybersecurity Risk Management and Strategy Starbucks has implemented a cybersecurity program that leverages industry-standard cybersecurity frameworks to assess, identify, and manage cybersecurity risk. Our cybersecurity program is integrated with the Enterprise Risk Management (“ERM”) framework and governance processes utilized by management and our Board to oversee our various top enterprise risks.
Biggest changeItem 1C. Cybersecurity Risk Management and Strategy Starbucks has implemented a cybersecurity program that leverages industry-standard cybersecurity frameworks, such as the National Institute of Standards and Technology Cybersecurity Framework, to assess, identify, and manage cybersecurity risk.
We also implement a variety of tools to monitor our systems and network activity, and we conduct various simulated attacks and penetration tests to assess the effectiveness of these tools. 28 Table of Contents We maintain an incident response plan that guides us in identifying, evaluating, responding to, and recovering from cybersecurity incidents.
We also implement a variety of tools to monitor our systems and network activity, and we conduct various simulated attacks and penetration tests to assess the effectiveness of these tools. We maintain an incident response plan that guides us in identifying, evaluating, responding to, and recovering from cybersecurity incidents.
For further discussion of the risks related to cybersecurity, see the risk factors discussed under “Risks Related to Cybersecurity and Data Privacy” in our Risk Factors in Item 1A of this Form 10-K.
For further discussion of the risks related to cybersecurity, see the risk factors discussed under “Risks Related to Cybersecurity, Data Privacy, and Information Technology” in our Risk Factors in Item 1A of this Form 10-K.
The ciso meets regularly with leaders of our various information technology management teams and with the Risk Management Committee (a management-level committee, which is co-managed by our cfo and chief legal officer), to review and discuss our cybersecurity and other information technology risks and opportunities.
The ciso meets regularly with leaders of our various information technology management teams and with the Risk Management Committee (a cross-functional management-level 22 Table of Contents committee, which is co-managed by our cfo and chief legal officer and meets at least quarterly), to review and discuss our cybersecurity and other information technology risks and opportunities.
Governance Our cybersecurity program is led by our senior vice president, chief information security officer (“ciso”), who is responsible for identifying, assessing, and managing our collective information security and technology risks. Our ciso has more than 20 years of experience in the information security and technology fields.
Governance Our cybersecurity program is led by our senior vice president, chief information security officer (“ciso”), who is responsible for identifying, assessing, and managing our collective information security and technology risks. Our ciso has more than 20 years of experience in the information security and technology fields, including various leadership roles in several large companies across multiple industries.
The plan provides for the creation of a cross-functional, tailored incident response team, led by dedicated incident responders, that may include both Company personnel and third-party service providers, as appropriate. The incident response plan includes incident classification and escalation protocols, as well as processes to assess and comply with applicable legal obligations.
The plan provides for the creation of a cross-functional, tailored incident response team, led by dedicated incident responders, that may include both Company personnel and third-party service providers, as appropriate.
We periodically test the effectiveness of the plan, and review and update it as appropriate. We also maintain insurance coverage that, subject to its terms and conditions, is intended to help us mitigate certain costs associated with cybersecurity incidents.
We also maintain insurance coverage that, subject to its terms and conditions, is intended to help us mitigate certain costs associated with cybersecurity incidents.
The ciso is informed about the prevention, detection, mitigation, and remediation of cybersecurity incidents through management of, and participation in, the cybersecurity program described above, including through reports prepared by our internal cybersecurity team and the operation of our incident response plan.
Those roles have included leading various cybersecurity capabilities and managing information security, business intelligence, and data analytics teams. The ciso is informed about the prevention, detection, mitigation, and remediation of cybersecurity incidents through management of, and participation in, the cybersecurity program described above, including through reports prepared by our internal cybersecurity team and the operation of our incident response plan.
The Audit Committee oversees our cybersecurity and technology risks, and the Impact Committee oversees our data privacy risks, all of which are integrated into our overall ERM program. The Audit Committee actively reviews and discusses our cybersecurity and technology risk management programs and regularly reports out to the full Board on our relevant strengths and opportunities.
The Audit Committee actively reviews and discusses our cybersecurity and technology risk management programs and regularly reports out to the full Board on our relevant strengths and opportunities. The Audit Committee also reviews our data privacy risk management programs and reports out to the full Board on our relevant strengths and opportunities.
We train our employees through annual cybersecurity awareness training, phishing simulations, and periodic communications about timely cybersecurity topics and threats.
We train our employees through annual cybersecurity awareness training, which includes information about how to report cybersecurity concerns and incidents, as well as phishing simulations and periodic communications about timely cybersecurity topics and threats.
Our internal audit function periodically evaluates our cybersecurity program and selected aspects of it. We have implemented various processes and tools to identify cybersecurity threats, detect potential attacks, and protect our data and information technology. We periodically evaluate evolving cybersecurity risks and legal and compliance requirements, and we make ongoing strategic investments to address those evolving risks and requirements.
We have implemented various processes and tools to identify cybersecurity threats, detect potential attacks, and protect our data and information technology. We periodically evaluate evolving cybersecurity risks and legal and compliance requirements, and we make ongoing strategic investments to address those evolving risks and requirements. We also participate in multiple cybersecurity forums that share threat intelligence and best practices.
Our Board has ultimate cybersecurity and data privacy risk oversight responsibility for the Company and administers this responsibility both directly and with assistance from the Audit and Compliance Committee (“Audit Committee”) and the Environmental, Partner, and Community Impact Committee (the “Impact Committee”).
Our Board has ultimate cybersecurity and data privacy risk oversight responsibility for the Company and administers this responsibility both directly and with assistance from the Audit and Compliance Committee (“Audit Committee”). The Audit Committee oversees our cybersecurity and technology risks, along with our data privacy risks, all of which are integrated into our overall ERM program.
The Impact Committee reviews our data privacy risk management programs and reports out to the full Board on our relevant strengths and opportunities. The Audit Committee receives quarterly updates from the ciso or other members of the ciso’s team with responsibility for oversight of our key cybersecurity program components.
The Audit Committee receives quarterly updates from the ciso or other members of the ciso’s team with responsibility for oversight of our key cybersecurity program components.
Removed
The ciso reports to our executive vice president, chief technology officer, who has spent more than 25 years of service in various leadership roles in information technology across multiple Fortune 500 companies.
Added
Our cybersecurity program is integrated with the Enterprise Risk Management (“ERM”) framework and governance processes utilized by management and our Board to oversee our various top enterprise risks. Our internal audit function periodically evaluates our cybersecurity program and selected aspects of it.
Removed
The Impact Committee receives annual updates from our vice president, data privacy, on our data privacy practices, emerging risks, and evolving global privacy laws and regulations. 29 Table of Contents
Added
The incident response plan includes incident classification and escalation protocols, including a process for informing senior management and the Board, as appropriate, as well as processes to assess and comply with applicable legal obligations. We periodically test the effectiveness of the plan, and review and update it, as appropriate.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAs of September 29, 2024, Starbucks h ad 21,018 company-operated stores, almost all of which are leased. We also lease space in various locations worldwide for regional, district, and other administrative offices, training facilities, and storag e. In addition to the locations listed above, we hold inventory at various locations managed by third-party warehouses.
Biggest changeAs of September 28, 2025, Starbucks had 21,514 company-operated stores, almost all of which are leased. We also lease space in various locations worldwide for regional, district, and other administrative offices, training facilities, and storag e. In addition to the locations listed above, we hold inventory at various locations managed by third-party warehouses.
Properties The material properties used by Starbucks in connection with its roasting, manufacturing, warehousing, distribution, and corporate administrative operations, serving all segments, are as follows: Location Approximate Size in Square Feet Purpose York, PA 1,957,000 Roasting, warehousing and distribution Seattle, WA 1,294,000 Corporate administrative Minden, NV (Carson Valley) 1,080,000 Roasting, warehousing and distribution Auburn, WA 750,000 Warehousing and distribution Lebanon, TN 680,000 Warehousing and distribution Kunshan, China 630,000 Roasting, warehousing and distribution Kent, WA 510,000 Roasting and distribution Shanghai, China 225,000 Corporate administrative We own most of our roasting facilities and lease the majority of our warehousing and distribution locations.
Properties The material properties used by Starbucks in connection with its roasting, manufacturing, warehousing, distribution, and corporate administrative operations, serving all segments, are as follows: Location Approximate Size in Square Feet Purpose York, PA 1,957,000 Roasting, warehousing and distribution Seattle, WA 1,294,000 Corporate administrative Minden, NV (Carson Valley) 1,080,000 Roasting, warehousing and distribution Auburn, WA 750,000 Warehousing and distribution Lebanon, TN 680,000 Warehousing and distribution Kunshan, China 630,000 Roasting, warehousing and distribution Kent, WA 510,000 Roasting and distribution Shanghai, China 221,000 Corporate administrative We own most of our roasting facilities and lease the majority of our warehousing and distribution locations.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeItem 5. Market for the Registrant’s Common Equity, Related Shareholder Matters, and Issuer Purchases of Equity Securities SHAREHOLDER INFORMATION MARKET INFORMATION AND DIVIDEND POLICY Starbucks common stock is traded on Nasdaq, under the symbol “SBUX.” As of November 13, 2024, we had approximately 17,000 shareholders of record.
Biggest changeItem 5. Market for the Registrant’s Common Equity, Related Shareholder Matters, and Issuer Purchases of Equity Securities SHAREHOLDER INFORMATION As of November 7, 2025, we had approximately 16,000 shareholders of record. This does not include persons whose stock is in nominee or “street name” accounts through brokers.
During the fiscal fourth quarter ended September 29, 2024, there was no share repurchase activity . 31 Table of Contents Performance Comparison Graph The following graph shall not be deemed “filed” for purposes of section 18 of the Exchange Act, or otherwise subject to the liabilities under that section and shall not be deemed to be incorporated by reference into any filing of Starbucks Corporation under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
During the fiscal fourth quarter ended September 28, 2025, there was no share repurchase activity. 24 Table of Contents Performance Comparison Graph The following graph shall not be deemed “filed” for purposes of section 18 of the Exchange Act, or otherwise subject to the liabilities under that section and shall not be deemed to be incorporated by reference into any filing of Starbucks Corporation under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
All indices shown in the graph have been reset to a base of 100 as of September 29, 2019, and assume an investment of $100 on that date and the reinvestment of dividends paid since that date. The stock price performance shown in the graph is not necessarily indicative of future price performance.
All indices shown in the graph have been reset to a base of 100 as of September 27, 2020, and assume an investment of $100 on that date and the reinvestment of dividends paid since that date. The stock price performance shown in the graph is not necessarily indicative of future stock price performance.
The following graph depicts the total return to shareholders from September 29, 2019, through September 29, 2024, relative to the performance of the Standard & Poor’s 500 Index, the Nasdaq Composite Index and the Standard & Poor’s 500 Consumer Discretionary Sector, a peer group that includes Starbucks.
The following graph depicts the total return to shareholders from September 27, 2020, through September 28, 2025, relative to the performance of the Standard & Poor’s 500 Index, the Nasdaq Composite Index and the Standard & Poor’s 500 Consumer Discretionary Sector, a peer group that includes Starbucks.
This does not include persons whose stock is in nominee or “street name” accounts through brokers. Future decisions to pay comparable cash dividends to those paid in the past continue to be at the discretion of the Board and will be dependent on our operating performance, financial condition, capital expenditure requirements and other factors that the Board considers relevant.
MARKET INFORMATION AND DIVIDEND POLICY Starbucks common stock is traded on Nasdaq, under the symbol “SBUX.” Future decisions to pay comparable cash dividends to those paid in the past continue to be at the discretion of the Board and will be dependent on our operating performance, financial condition, capital expenditure requirements and other factors that the Board considers relevant.
Sep 29, 2019 Sep 27, 2020 Oct 3, 2021 Oct 2, 2022 Oct 1, 2023 Sep 29, 2024 Starbucks Corporation $ 100.00 $ 97.36 $ 132.65 $ 101.19 $ 111.93 $ 122.41 S&P 500 100.00 115.15 149.70 126.54 153.89 209.84 Nasdaq Composite 100.00 140.96 183.61 135.42 170.76 236.74 S&P Consumer Discretionary 100.00 128.89 153.57 121.48 138.22 177.00 32 Table of Contents
Sep 27, 2020 Oct 3, 2021 Oct 2, 2022 Oct 1, 2023 Sep 29, 2024 Sep 28, 2025 Starbucks Corporation $ 100.00 $ 136.25 $ 103.93 $ 114.96 $ 125.74 $ 110.47 S&P 500 100.00 130.01 109.89 133.65 182.23 214.30 Nasdaq Composite 100.00 130.26 96.06 121.14 167.95 210.64 S&P Consumer Discretionary 100.00 119.15 94.25 107.23 137.32 165.21 25 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

77 edited+29 added−20 removed59 unchanged
Biggest changeOperating margin contracted 90 basis points to 19.8%, primarily due to investments in store partner wages and benefits (approximately 150 basis points), deleverage (approximately 150 basis points), and increased promotional activity (approximately 100 basis points), partially offset by pricing (approximately 220 basis points) and in-store operational efficiencies (approximately 150 basis points). 39 Table of Contents International Fiscal Year Ended Sep 29, 2024 Oct 1, 2023 Sep 29, 2024 Oct 1, 2023 As a % of International Total Net Revenues Net revenues: Company-operated stores $ 5,507.2 $ 5,556.9 75.0 % 74.2 % Licensed stores 1,757.7 1,853.6 24.0 24.8 Other 74.0 77.1 1.0 1.0 Total net revenues 7,338.9 7,487.6 100.0 100.0 Product and distribution costs 2,575.2 2,608.4 35.1 34.8 Store operating expenses 2,819.4 2,761.1 38.4 36.9 Other operating expenses 225.1 219.0 3.1 2.9 Depreciation and amortization expenses 338.3 335.1 4.6 4.5 General and administrative expenses 338.8 335.8 4.6 4.5 Total operating expenses 6,296.8 6,259.4 85.8 83.6 Income from equity investees 3.6 2.7 0.0 0.0 Operating income $ 1,045.7 $ 1,230.9 14.2 % 16.4 % Store operating expenses as a % of related revenues 51.2 % 49.7 % Revenues International total net revenues for fiscal 2024 decreased $149 million, or 2%, primarily due to unfavorable foreign currency translation impacts ($252 million), as well as a 4% decline in comparable store sales ($210 million), driven by a 4% decline in average ticket.
Biggest changeOperating margi n contracted 830 basis points to 11.5%, primarily driven by deleverage (approximately 310 basis points) restructuring costs ass ociated with the closure of coffeehouses and simplification of our support organization (approximately 240 basis points) and investments in support of “Back to Starbucks,” which were largely in labor hours (approximately 180 basis points). 32 Table of Contents International Fiscal Year Ended Sep 28, 2025 Sep 29, 2024 Sep 28, 2025 Sep 29, 2024 As a % of International Total Net Revenues Net revenues: Company-operated stores $ 5,951.8 $ 5,507.2 76.1 % 75.0 % Licensed stores 1,774.8 1,757.7 22.7 24.0 Other 93.3 74.0 1.2 1.0 Total net revenues 7,819.9 7,338.9 100.0 100.0 Product and distribution costs 2,749.8 2,575.2 35.2 35.1 Store operating expenses 3,085.6 2,819.4 39.5 38.4 Other operating expenses 242.0 225.1 3.1 3.1 Depreciation and amortization expenses 363.9 338.3 4.7 4.6 General and administrative expenses 344.3 338.8 4.4 4.6 Restructuring and impairments 82.5 — 1.1 — Total operating expenses 6,868.1 6,296.8 87.8 85.8 Income/ (loss) from equity investees (1.8) 3.6 0.0 0.0 Operating income $ 950.0 $ 1,045.7 12.1 % 14.2 % Store operating expenses as a % of related revenues 51.8 % 51.2 % Revenues International total net revenues for fiscal 2025 increased $481 million, or 7%, primarily due to net new company-operated store growth of 5%, or 526 stores, over the past 12 months ($264 million) and the incremental net revenue from the conversion of 113 licensed stores to company-operated stores ($95 million) following the acquisition of 23.5 Degrees Topco Limited during the first quarter of fiscal 2025.
To the extent we prevail in matters for which a liability has been established or are required to pay amounts in excess of our established liability, our effective income tax rate in a given financial statement period could be materially affected. 47 Table of Contents Property, Plant and Equipment and Other Finite-Lived Assets We evaluate property, plant and equipment, operating lease right-of-use (“ROU”) assets and other finite-lived assets for impairment when facts and circumstances indicate that the carrying values of such assets may not be recoverable.
To the extent we prevail in matters for which a liability has been established or are required to pay amounts in excess of our established liability, our effective income tax rate in a given financial statement period could be materially affected. 40 Table of Contents Property, Plant and Equipment and Other Finite-Lived Assets We evaluate property, plant and equipment, operating lease right-of-use (“ROU”) assets and other finite-lived assets for impairment when facts and circumstances indicate that the carrying values of such assets may not be recoverable.
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.
Amounts outstanding under the commercial paper program are required to be backstopped by available commitments under our 2025 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.
(2) Purchase obligations include agreements to purchase goods or services that are enforceable and legally binding on Starbucks and that specify all significant terms. Green coffee purchase commitments comprise 86% of total purchase obligations. (3) Other obligations include other long-term liabilities primarily consisting of long-term asset retirement obligations, income taxes payable, equity investment capital commitments, and finance lease obligations.
(2) Purchase obligations include agreements to purchase goods or services that are enforceable and legally binding on Starbucks and that specify all significant terms. Green coffee purchase commitments comprise 88% of total purchase obligations. (3) Other obligations include other long-term liabilities primarily consisting of long-term asset retirement obligations, income taxes payable, equity investment capital commitments, and finance lease obligations.
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 September 29, 2024, we had no borrowings outstanding under these credit facilities.
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 September 28, 2025 and September 29, 2024, we had no borrowings outstanding under these credit facilities.
We believe that our significant accounting estimates involve a higher degree of judgment and/or complexity for the reasons discussed below. 46 Table of Contents Income Taxes We recognize deferred tax assets and liabilities based on the differences between the financial statement carrying amounts and the respective tax bases of our assets and liabilities.
We believe that our significant accounting estimates involve a higher degree of judgment and/or complexity for the reasons discussed below. 39 Table of Contents Income Taxes We recognize deferred tax assets and liabilities based on the differences between the financial statement carrying amounts and the respective tax bases of our assets and liabilities.
These estimates, as well as the selection of comparable companies and valuation multiples used in the market approaches, are highly subjective, and our ability to realize the future cash flows used in our fair value calculations is affected by factors such as the success of strategic initiatives, changes in economic conditions, changes in our operating performance, and changes in our business strategies, including retail initiatives and international expansion.
These estimates, as well as the selection of comparable companies and valuation multiples used in the market approaches, are highly subjective, and our ability to realize the future cash flows used in our fair value calculations 41 Table of Contents is affected by factors such as the success of strategic initiatives, changes in economic conditions, changes in our operating performance, and changes in our business strategies, including retail initiatives and international expansion.
We continue to believe the fair value of each of our reporting units is significantly in excess of its carrying value, and absent a sustained multi-year global decline in our business in key markets such as the U.S. and China, we do not anticipate incurring significant 48 Table of Contents goodwill impairment in the next 12 months.
We continue to believe the fair value of each of our reporting units is significantly in excess of its carrying value, and absent a sustained multi-year global decline in our business in key markets such as the U.S. and China, we do not anticipate incurring significant goodwill impairment in the next 12 months.
Acquisitions and Divestitures See Note 2 , Acquisitions, Divestitures and Strategic Alliance, to the consolidated financial statements included in Item 8 of Part II of this 10-K for information regarding acquisitions and divestitures.
Acquisitions and Divestitures See Note 2 , Acquisitions and Divestitures, to the consolidated financial statements included in Item 8 of Part II of this 10-K for information regarding acquisitions and divestitures.
The information provided below relates only to the hedging instruments and does not represent the corresponding changes in the underlying hedged items (in millions) : Increase/(Decrease) to Net Earnings Increase/(Decrease) to OCI 10% Increase in Underlying Rate 10% Decrease in Underlying Rate 10% Increase in Underlying Rate 10% Decrease in Underlying Rate Commodity hedges $ 2 $ (2) $ 21 $ (21) Foreign Currency Exchange Risk The majority of our revenue, expense, and capital purchasing activities are transacted in U.S. dollars.
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) : Increase/(Decrease) to Net Earnings Increase/(Decrease) to OCI 10% Increase in Underlying Rate 10% Decrease in Underlying Rate 10% Increase in Underlying Rate 10% Decrease in Underlying Rate Commodity hedges — — 39 (39) Foreign Currency Exchange Risk The majority of our revenue, expense, and capital purchasing activities are transacted in U.S. dollars.
We use a combination of pricing features embedded within supply contracts, such as fixed-price and price-to-be-fixed contracts and financial derivatives, to manage our commodity price risk exposure. The following table summarizes the potential impact as of September 29, 2024, to Starbucks future net earnings and other comprehensive income (“OCI”) from changes in commodity prices.
We use a combination of pricing features embedded within supply contracts, such as fixed-price and price-to-be-fixed contracts and financial derivatives, to manage our commodity price risk exposure. The following table summarizes the potential impact as of September 28, 2025, to Starbucks future net earnings and other comprehensive income (“OCI”) from changes in commodity prices.
All references to store counts, including data for new store openings, are reported net of related store closures, unless otherwise noted. Fiscal years 2024, 2023, and 2022 included 52 weeks. The discussion of our financial condition and results of operations for the fiscal year ended October 2, 2022, included in Item 7.
All references to store counts, including data for new store openings, are reported net of related store closures, unless otherwise noted. Fiscal years 2025, 2024, and 2023 included 52 weeks. The discussion of our financial condition and results of operations for the fiscal year ended October 1, 2023, included in Item 7.
The information provided below relates only to the hedging instruments and does not represent the corresponding changes in the underlying hedged items ( in millions ): Increase/(Decrease) to Net Earnings Increase/(Decrease) to OCI 10% Increase in Underlying Rate 10% Decrease in Underlying Rate 10% Increase in Underlying Rate 10% Decrease in Underlying Rate Foreign currency hedges $ 24 $ (24) $ 489 $ (489) Equity Security Price Risk We have minimal exposure to price fluctuations on equity mutual funds and equity exchange-traded funds within our marketable equity securities portfolio.
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 ): Increase/(Decrease) to Net Earnings Increase/(Decrease) to OCI 10% Increase in Underlying Rate 10% Decrease in Underlying Rate 10% Increase in Underlying Rate 10% Decrease in Underlying Rate Foreign currency hedges $ 22 $ (22) $ 490 $ (490) Equity Security Price Risk We have minimal exposure to price fluctuations on equity mutual funds and equity exchange-traded funds within our marketable equity securities portfolio.
See Note 3 , Derivative Financial Instruments 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, 2024.
See Note 3 , Derivative Financial Instruments, 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 28, 2025.
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 September 29, 2024, we were in compliance with all applicable covenants.
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 September 28, 2025, we were in compliance with all applicable covenants.
We performed a sensitivity analysis based on a 100 basis point change in the underlying interest rate of our available-for-sale securities as of September 29, 2024, and determined that such a change would not have a significant impact on the fair value of these instruments.
We performed a sensitivity analysis based on a 100 basis point change in the underlying interest rate of our available-for-sale securities as of September 28, 2025, and determined that such a change would not have a significant impact on the fair value of these instruments.
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. 45 Table of Contents The following table summarizes the potential impact as of September 29, 2024, 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 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. 38 Table of Contents The following table summarizes the potential impact as of September 28, 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.
We performed a sensitivity analysis based on a 10% change in the underlying equity prices of our investments as of September 29, 2024, and determined that such a change would not have a significant impact on the fair value of these instruments.
We performed a sensitivity analysis based on a 10% change in the underlying equity prices of our investments as of September 28, 2025, and determined that such a change would not have a significant impact on the fair value of these instruments.
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 $34.5 million, credit facility is currently set to mature on December 30, 2024.
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 $33.4 million, credit facility is currently set to mature on December 30, 2025.
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 enters into the arrangements, as well as the translation risk of certain balance sheet items.
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 is party to the arrangements, as well as the translation risk of certain balance sheet items and net investments in foreign operations.
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 0.400%. • A ¥10.0 billion, or $69.1 million, credit facility is currently set to mature on March 27, 2025.
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 0.400%. • A ¥10.0 billion, or $66.8 million, credit facility is currently set to mature on March 27, 2026.
The possibility exists that foreign earnings declared as indefinitely reinvested may be repatriated as our plans are based on our estimated working and other capital needs in jurisdictions where our earnings are generated.
Foreign earnings declared as indefinitely reinvested may be repatriated as our plans are based on our estimated working and other capital needs in jurisdictions where our earnings are generated.
See Note 14 , Income Taxes, to the consolidated financial statements included in Item 8 of Part II of this 10-K, for further discussion. 43 Table of Contents During each of the first three quarters of fiscal 2023, we declared a cash dividend to shareholders of $0.53 per share.
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 each of the first three quarters of fiscal 2024, we declared a cash dividend to shareholders of $0.57 per share.
We also monitor and limit the amount of associated counterparty credit risk, which we consider to be low. We use interest rate swap agreements and treasury locks to primarily hedge against changes in benchmark interest rates related to anticipated debt issuances.
Risk limits are set annually, and speculative trading activities are prohibited. We also monitor and limit the amount of associated counterparty credit risk, which we consider to be low. We use interest rate swap agreements and treasury locks to primarily hedge against changes in benchmark interest rates related to anticipated debt issuances.
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 October 1, 2023.
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 September 29, 2024.
The following table summarizes the impact of a change in interest rates as of September 29, 2024, on the fair value of Starbucks debt (in millions) : Fair Value Decrease in Fair Value for a 100 Basis Point Increase in Underlying Rate Long-term debt (1) $ 14,647 $ (943) (1) Amount disclosed is net of $15 million change in the fair value of our designated interest rate swaps.
The following table summarizes the impact of a change in interest rates as of September 28, 2025, on the fair value of Starbucks debt (in millions) : Fair Value Decrease in Fair Value for a 100 Basis Point Increase in Underlying Rate Long-term debt (1) $ 14,968 $ (873) (1) Amount disclosed is net of $12 million change in the fair value of our designated interest rate swaps.
Cash used in financing activities was $3.7 billion for fiscal 2024, compared to $3.0 billion for fiscal 2023.
Cash used in financing activities was $2.3 billion for fiscal 2025, compared to $3.7 billion for fiscal 2024.
Dividends are generally paid in the quarter following the declaration date. Cash returned to shareholders through dividends in fiscal 2024 and 2023 totaled $2.6 billion and $2.4 billion, respectively. 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.
Dividends are generally paid in the quarter following the declaration date. Cash returned to shareholders through dividends in fiscal 2025 and 2024 totaled $2.8 billion and $2.6 billion , respectively. 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.
Our investment portfolio primarily includes highly liquid available-for-sale securities, including corporate debt securities, government treasury securities (domestic and foreign), and commercial paper as well as principal-protected structured deposits. As of September 29, 2024, approximately $2.1 billion of cash and short-term investments were held in foreign subsidiaries.
Our investment portfolio primarily includes highly liquid available-for-sale securities, including corporate debt securities and U.S. government treasury securities, as well as principal-protected structured deposits. As of September 28, 2025, approximately $1.6 billion of cash and short-term investments were held in foreign subsidiaries.
During the fourth quarter of fiscal 2023, and for each of the first three quarters of fiscal 2024, we declared a cash dividend of $0.57 per share. During the fourth quarter of fiscal 2024, we declared a cash dividend of $0.61 per share to be paid on November 29, 2024, with an expected payout of approximately $691.4 million.
During the fourth quarter of fiscal 2024, and for each of the first three quarters of fiscal 2025, we declared a cash dividend of $0.61 per share. During the fourth quarter of fiscal 2025, we declared a cash dividend of $0.62 per share to be paid on November 28, 2025 , with an expected payout of approximately $704.8 million .
Our fiscal 2024 annual goodwill impairment testing was completed in the third fiscal quarter. Where a quantitative assessment was performed, the estimated fair value of our reporting units exceeded carrying value by approximately $124 billion.
Our fiscal 2025 annual goodwill impairment testing was completed in the third fiscal quarter. Using the most recent quantitative assessment performed, the estimated fair value of our reporting units exceeded carrying value by approximately $ 120 billion.
The decrease was primarily driven by contraction in operating margin as compared to the prior year. • Capital expenditures were $2.8 billion in fiscal 2024 and $2.3 billion in fiscal 2023. • We returned $3.8 billion and $3.4 billion to our shareholders in fiscal 2024 and fiscal 2023, respectively, through dividends and share repurchases.
The decrease was primarily driven by contraction in operating margin, including restructuring and impairment costs in support of our “Back to Starbucks” strategy, as compared to the prior year. • Capital expenditures were $2.3 billion in fiscal 2025 and $2.8 billion in fiscal 2024. • We returned $2.8 billion and $3.8 billion to our shareholders in fiscal 2025 and fiscal 2024, respectively, through dividends and share repurchases.
As of September 29, 2024, we were in compliance with all applicable covenants. No amounts were outstanding under our 2021 credit facility as of September 29, 2024, or October 1, 2023. 42 Table of Contents Our total available contractual borrowing capacity for general corporate purposes was $3.0 billion as of the end of fiscal 2024.
No amounts were outstanding under our 2025 credit facility as of September 28, 2025, or our 2021 credit facility as of September 29, 2024. 35 Table of Contents Our total available contractual borrowing capacity for general corporate purposes was $3.0 billion as of the end of fiscal 2025.
Under this policy, market-based risks are quantified and evaluated for potential mitigation strategies, such as entering into hedging transactions. The market price risk management policy governs how hedging instruments may be used to mitigate risk. Risk limits are set annually, and speculative trading activities are prohibited.
We manage our exposure to various market-based risks according to a market price risk management policy. Under this policy, market-based risks are quantified and evaluated for potential mitigation strategies, such as entering into hedging transactions. The market price risk management policy governs how hedging instruments may be used to mitigate risk.
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 to $1.9 billion for fiscal 2024, or 5%, compared to $1.8 billion in fiscal 2023.
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.
As of September 29, 2024, and October 1, 2023, we had no amounts outstanding under our commercial paper program.
As of September 28, 2025, and September 29, 2024, we had no borrowings outstanding under our commercial paper program.
Other operating expenses increased $26 million, primarily due to support costs for our growing licensed markets. Depreciation and amortization expenses as a percentage of total net revenues increased 40 basis points, primarily due to deleverage.
Other operating expenses increased $19 million, primarily due to support costs for our licensed markets. Depreciation and amortization expenses as a percentage of total net revenues increased 30 basis points, primarily due to deleverage. General and administrative expenses increased $94 million , primarily due to the Leadership Experience 2025 ($81 million).
These estimates are subjective and our ability to realize future cash flows and asset fair values is affected by factors such as ongoing maintenance and improvement of the assets, changes in economic conditions, and changes in operating performance. In fiscal 2022, we announced our Reinvention Plan in the U.S. market to increase efficiency while elevating the partner and customer experience.
These estimates are subjective and our ability to realize future cash flows and asset fair values is affected by factors such as ongoing maintenance and improvement of the assets, changes in economic conditions, and changes in operating performance.
The combination of these changes resulted in an overall decrease in operating margin of 130 basis points in fiscal 2024 when compared to fiscal 2023. 37 Table of Contents Other Income and Expenses Fiscal Year Ended Sep 29, 2024 Oct 1, 2023 Sep 29, 2024 Oct 1, 2023 As a % of Total Net Revenues Operating income $ 5,408.8 $ 5,870.8 15.0 % 16.3 % Interest income and other, net 122.8 81.2 0.3 0.2 Interest expense (562.0) (550.1) (1.6) (1.5) Earnings before income taxes 4,969.6 5,401.9 13.7 15.0 Income tax expense 1,207.3 1,277.2 3.3 3.6 Net earnings including noncontrolling interests 3,762.3 4,124.7 10.4 11.5 Net earnings/(loss) attributable to noncontrolling interests 1.4 0.2 0.0 0.0 Net earnings attributable to Starbucks $ 3,760.9 $ 4,124.5 10.4 % 11.5 % Effective tax rate including noncontrolling interests 24.3 % 23.6 % Interest income and other, net increased $42 million, and i nterest expens e increased $12 million, both primarily due to higher interest rates in the current year.
The combination of these changes resulted in an overall decrease in operating margin of 710 basis points i n fiscal 2025 when compared to fiscal 2024. 30 Table of Contents Other Income and Expenses Fiscal Year Ended Sep 28, 2025 Sep 29, 2024 Sep 28, 2025 Sep 29, 2024 As a % of Total Net Revenues Operating income $ 2,936.6 $ 5,408.8 7.9 % 15.0 % Interest income and other, net 113.3 122.8 0.3 0.3 Interest expense (542.6) (562.0) (1.5) (1.6) Earnings before income taxes 2,507.3 4,969.6 6.7 13.7 Income tax expense 650.6 1,207.3 1.7 3.3 Net earnings including noncontrolling interests 1,856.7 3,762.3 5.0 10.4 Net earnings/(loss) attributable to noncontrolling interests 0.3 1.4 0.0 0.0 Net earnings attributable to Starbucks $ 1,856.4 $ 3,760.9 5.0 % 10.4 % Effective tax rate including noncontrolling interests 25.9 % 24.3 % Interest income and other, net decreased $10 million, primarily due to lower cash balances and lower interest rates in the current year.
Operating Margin Channel Development operating income for fiscal 2024 decreased 4% to $926 million, compared to $968 million in fiscal 2023.
Operating Margin Channel Development operating income for fiscal 2025 decreas ed 4% to $885 million, compared to $926 million in fiscal 2024.
See Note 14 , Income Taxes, to the consolidated financial statements included in Item 8 of Part II of this 10-K, for further discussion. 38 Table of Contents Segment Information Results of operations by segment (in millions) : North America Fiscal Year Ended Sep 29, 2024 Oct 1, 2023 Sep 29, 2024 Oct 1, 2023 As a % of North America Total Net Revenues Net revenues: Company-operated stores $ 24,258.7 $ 23,905.4 89.8 % 90.0 % Licensed stores 2,747.4 2,659.1 10.2 10.0 Other 3.4 5.1 0.0 0.0 Total net revenues 27,009.5 26,569.6 100.0 100.0 Product and distribution costs 7,478.0 7,530.4 27.7 28.3 Store operating expenses 12,467.1 11,959.2 46.2 45.0 Other operating expenses 280.9 263.8 1.0 1.0 Depreciation and amortization expenses 1,052.4 910.1 3.9 3.4 General and administrative expenses 375.8 389.7 1.4 1.5 Restructuring and impairments — 20.7 — 0.1 Total operating expenses 21,654.2 21,073.9 80.2 79.3 Operating income $ 5,355.3 $ 5,495.7 19.8 % 20.7 % Store operating expenses as a % of related revenues 51.4 % 50.0 % Revenues North America total net revenues for fiscal 2024 increased $440 million, or 2%, primarily driven by net new company-operated store growth of 5%, or 533 stores, over the past 12 months ($788 million) and higher product and equipment sales to, and royalty revenues from, our licensees ($80 million).
See Note 14 , Income Taxes, to the consolidated financial statements included i n Item 8 of Part II of this 10-K, for further discussion. 31 Table of Contents Segment Information Results of operations by segment (in millions) : North America Fiscal Year Ended Sep 28, 2025 Sep 29, 2024 Sep 28, 2025 Sep 29, 2024 As a % of North America Total Net Revenues Net revenues: Company-operated stores $ 24,793.0 $ 24,258.7 90.6 % 89.8 % Licensed stores 2,575.6 2,747.4 9.4 10.2 Other 4.5 3.4 0.0 0.0 Total net revenues 27,373.1 27,009.5 100.0 100.0 Product and distribution costs 7,628.7 7,478.0 27.9 27.7 Store operating expenses 13,973.3 12,467.1 51.0 46.2 Other operating expenses 281.6 280.9 1.0 1.0 Depreciation and amortization expenses 1,196.3 1,052.4 4.4 3.9 General and administrative expenses 483.3 375.8 1.8 1.4 Restructuring and impairments 653.2 — 2.4 — Total operating expenses 24,216.4 21,654.2 88.5 80.2 Operating income $ 3,156.7 $ 5,355.3 11.5 % 19.8 % Store operating expenses as a % of related revenues 56.4 % 51.4 % Revenues North America total net revenues for fiscal 2025 increased $364 million, or 1%, primarily driven by net new company-operated store growth of 4%, or 441 stores over the past 12 months ($980 million), prior to the 584 restructuring closures late in the fourth quarter of fiscal 2025.
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.
Borrowings under the 2025 credit facility will bear interest at a fluctuating rate based on the Term Secured Overnight Financing Rate (“Term SOFR”), and, for U.S. dollar-denominated loans under certain circumstances, a Base Rate (as defined in the 2025 credit facility), in each case plus an applicable rate.
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 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.
RESULTS OF OPERATIONS — FISCAL 2024 COMPARED TO FISCAL 2023 Consolidated results of operations (in millions) : Revenues Fiscal Year Ended Sep 29, 2024 Oct 1, 2023 % Change Net revenues: Company-operated stores $ 29,765.9 $ 29,462.3 1.0 % Licensed stores 4,505.1 4,512.7 (0.2) Other 1,905.2 2,000.6 (4.8) Total net revenues $ 36,176.2 $ 35,975.6 0.6 % Total net revenues increased $201 million, or 1%, over fiscal 2023, primarily due to higher revenues from company-operated stores ($304 million).
RESULTS OF OPERATIONS — FISCAL 2025 COMPARED TO FISCAL 2024 Consolidated results of operations (in millions) : Revenues Fiscal Year Ended Sep 28, 2025 Sep 29, 2024 % Change Net revenues: Company-operated stores $ 30,744.8 $ 29,765.9 3.3 % Licensed stores 4,350.4 4,505.1 (3.4) Other 2,089.2 1,905.2 9.7 Total net revenues $ 37,184.4 $ 36,176.2 2.8 % Total net revenues increased $1 billion, or 3%, over fiscal 2024, primarily due to higher revenues from company-operated stores ($979 million) and other revenues ($184 million), partially offset by a decline in revenues from licensed stores ($155 million).
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.
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.
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.
See Note 9 , Debt, to the consolidated financial statements included in Item 8 of Part II of this 10-K for details of the components of our long-term debt.
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. Asset impairment charges are discussed in Note 1 , Summary of Significant Accounting Policies and Estimates, to the consolidated financial statements included in Item 8 of Part II of this 10-K.
Refer to Note 18 , Restructuring, included in Item 8 of Part II of this 10-K, for further discussion. Asset impairment charges are discussed in Note 1 , Summary of Significant Accounting Policies and Estimates, to the consolidated financial statements included in Item 8 of Part II of this 10-K.
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.
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.
This growth was partially offset by a 2% decline in comparable store sales ($420 million) driven by a 5% decrease in comparable transactions, partially offset by a 4% increase in average ticket, primarily due to annualization of pricing. Operating Margin North America operating income for fiscal 2024 decreased 3% to $5.4 billion, compared to $5.5 billion in fiscal 2023.
This growth was partially offset by a 2% decline in comparable store sales ( $419 million ) driven by a 4% decline in comparable transactions, partially offset by a 2% increase in average ticket, primarily due to annualization of prior year pricing.
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).
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 $8 million, primarily driven by lower product and equipment sales to, and royalty revenues from, our licensees in our International segment ($69 million) and unfavorable foreign currency translation impacts ($27 million), partially offset by higher product and equipment sales to, and royalty revenues from, our licensees in our North America segment ($80 million).
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).
The change was primarily due to an increase in repayments of debt and an increase in cash returned to shareholders through dividends and share repurchases, partially offset by an increase in net proceeds from issuances of debt. 44 Table of Contents 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.
The change was primarily due to no current year share repurchases of our common stock compared to the prior year. 37 Table of Contents 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.
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.
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.
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.
The 2025 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 28, 2025, we were in compliance with all applicable covenants.
Other revenues decreased $95 million, primarily due to a decline in revenue in the Global Coffee Alliance ($125 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. 36 Table of Contents Operating Expenses Fiscal Year Ended Sep 29, 2024 Oct 1, 2023 Sep 29, 2024 Oct 1, 2023 As a % of Total Net Revenues Product and distribution costs $ 11,180.6 $ 11,409.1 30.9 % 31.7 % Store operating expenses 15,286.5 14,720.3 42.3 40.9 Other operating expenses 565.6 539.4 1.6 1.5 Depreciation and amortization expenses 1,512.6 1,362.6 4.2 3.8 General and administrative expenses 2,523.3 2,441.3 7.0 6.8 Restructuring and impairments — 21.8 — 0.1 Total operating expenses 31,068.6 30,494.5 85.9 84.8 Income from equity investees 301.2 298.4 0.8 0.8 Gain from sale of assets — 91.3 — 0.3 Operating income $ 5,408.8 $ 5,870.8 15.0 % 16.3 % Store operating expenses as a % of related revenues 51.4 % 50.0 % Product and distribution costs as a percentage of total net revenues decreased 80 basis points, primarily due to the impact of increased sales from pricing (approximately 70 basis points) and a reduction in supply chain costs (approximately 60 basis points).
Other reven ues increased $184 million, primarily due to an increase in revenue in the Global Coffee Alliance ($99 million) and increased sales of cocoa butter to third parties ($66 million). 29 Table of Contents Operating Expenses Fiscal Year Ended Sep 28, 2025 Sep 29, 2024 Sep 28, 2025 Sep 29, 2024 As a % of Total Net Revenues Product and distribution costs $ 11,658.2 $ 11,180.6 31.4 % 30.9 % Store operating expenses 17,058.9 15,286.5 45.9 42.3 Other operating expenses 584.6 565.6 1.6 1.6 Depreciation and amortization expenses 1,684.7 1,512.6 4.5 4.2 General and administrative expenses 2,617.2 2,523.3 7.0 7.0 Restructuring and impairments 892.0 — 2.4 — Total operating expenses 34,495.6 31,068.6 92.8 85.9 Income from equity investees 247.8 301.2 0.7 0.8 Operating income $ 2,936.6 $ 5,408.8 7.9 % 15.0 % Store operating expenses as a % of related revenues 55.5 % 51.4 % Product and distribution costs as a percentage of total net revenues increased 50 basis points , primarily due to inflation (approximately 80 basis points).
The following table summarizes current and long-term material cash requirements as of September 29, 2024, which we expect to fund primarily with operating cash flows ( in millions ): Material Cash Requirements Total Less than 1 Year 1 - 3 Years 3 - 5 Years More than 5 Years Operating lease obligations (1) $ 11,942.3 $ 1,808.5 $ 3,202.2 $ 2,433.1 $ 4,498.5 Debt obligations Principal payments 15,700.0 1,250.0 3,000.0 2,350.0 9,100.0 Interest payments 6,359.4 588.3 968.9 798.6 4,003.6 Purchase obligations (2) 1,296.0 1,010.0 245.9 40.1 — Other obligations (3) 350.8 116.3 101.0 37.3 96.2 Total $ 35,648.5 $ 4,773.1 $ 7,518.0 $ 5,659.1 $ 17,698.3 (1) Amounts include direct lease obligations, excluding any taxes, insurance, and other related expenses.
The following table summarizes current and long-term material cash requirements as of September 28, 2025, which we expect to fund primarily with operating cash flows ( in millions ): Material Cash Requirements Total Less than 1 Year 1 - 3 Years 3 - 5 Years More than 5 Years Operating lease obligations (1) $ 12,389.2 $ 1,940.6 $ 3,305.7 $ 2,550.7 $ 4,592.2 Debt obligations Principal payments 16,200.0 1,500.0 2,850.0 3,000.0 8,850.0 Interest payments 6,264.1 603.4 1,033.4 816.2 3,811.1 Purchase obligations (2) 1,350.8 1,185.4 165.4 — — Other obligations (3) 308.3 117.0 49.0 40.1 102.2 Total $ 36,512.4 $ 5,346.4 $ 7,403.5 $ 6,407.0 $ 17,355.5 (1) Amounts include direct lease obligations, excluding any taxes, insurance, and other related expenses.
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.
This growth was partially offset by a 2% decline in comparable store sales. Comparable transactions declined 4% , partially offset by average ticket growth of 2% , primarily driven by annualization of pricing in the current year. Also contributing were lower product and equipment sales to, and royalty revenues from, our licensees.
Our income tax expense and deferred tax assets and liabilities for unrecognized tax benefits reflect management’s best assessment of estimated current and future taxes to be paid.
If these amounts are distributed to the U.S., in the form of dividends or otherwise, we may be subject to additional foreign withholding taxes and U.S. state income taxes, which could be material. Our income tax expense and deferred tax assets and liabilities for unrecognized tax benefits reflect management’s best assessment of estimated current and future taxes to be paid.
Operating margin contracted 220 basis points to 14.2%, primarily due to increased promotional activity (approximately 170 basis points) and investments in store partner wages and benefits (approximately 120 basis points), partially offset by in-store operational efficiencies (approximately 100 basis points). 40 Table of Contents Channel Development Fiscal Year Ended Sep 29, 2024 Oct 1, 2023 Sep 29, 2024 Oct 1, 2023 As a % of Channel Development Total Net Revenues Net revenues $ 1,769.8 $ 1,893.8 Product and distribution costs 1,075.4 1,250.1 60.8 % 66.0 % Other operating expenses 58.4 54.6 3.3 2.9 Depreciation and amortization expenses — 0.1 0.0 0.0 General and administrative expenses 7.7 8.4 0.4 0.4 Total operating expenses 1,141.5 1,313.2 64.5 69.3 Income from equity investees 297.6 295.7 16.8 15.6 Gain from sale of assets — 91.3 — 4.8 Operating income $ 925.9 $ 967.6 52.3 % 51.1 % Revenues Channel Development total net revenues for fiscal 2024 decreased $124 million, or 7%, compared to fiscal 2023, primarily due to a decline in revenue in the Global Coffee Alliance ($125 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.
Operating margin contracted 210 basis points, to 12.1% , primarily due to increased promotional activity (approximately 170 basis points) and restructuring and impairment costs associated with the closure of coffeehouses and simplification of our support organization (approximately 110 basis points). 33 Table of Contents Channel Development Fiscal Year Ended Sep 28, 2025 Sep 29, 2024 Sep 28, 2025 Sep 29, 2024 As a % of Channel Development Total Net Revenues Net revenues $ 1,871.7 $ 1,769.8 Product and distribution costs 1,168.3 1,075.4 62.4 % 60.8 % Other operating expenses 60.2 58.4 3.2 3.3 General and administrative expenses 5.8 7.7 0.3 0.4 Restructuring and impairments 1.9 — 0.1 — Total operating expenses 1,236.2 1,141.5 66.0 64.5 Income from equity investees 249.6 297.6 13.3 16.8 Operating income $ 885.1 $ 925.9 47.3 % 52.3 % Revenues Channel Development total net revenues for fiscal 2025 increased $102 million, or 6%, compared to fiscal 2024, primarily due to an increase in revenue in the Global Coffee Alliance ($99 million).
For both the North America segment and U.S. market, revenue increased 2% in fiscal 2024 compared to fiscal 2023, primarily driven by net new company-operated store growth over the past 12 months and higher product and equipment sales to, and royalty revenues from, our licensees. This growth was partially offset by a 2% decline in comparable store sales.
For both the North America segment and U.S. market, revenue increased 1% in fiscal 2025 compared to fiscal 2024, primarily driven by net new company-operated store growth of 4% , or 441 stores, over the past 12 months, prior to the 584 North America restructuring closures late in the fourth quarter of fiscal 2025.
Cash Flows 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.
Cash Flows Cash provided by operating activities was $4.7 billion for fiscal 2025, compared to $6.1 billion for fiscal 2024. The change was primarily due to the decrease in net earnings of $1.9 billion and a net increase of $451.2 million in inventories, which was primarily driven by green and roasted coffee, largely due to elevated coffee prices.
FINANCIAL RISK MANAGEMENT Market risk is defined as the risk of losses due to changes in commodity prices, foreign currency exchange rates, equity security prices, and interest rates. We manage our exposure to various market-based risks according to a market price risk management policy.
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. FINANCIAL RISK MANAGEMENT Market risk is defined as the risk of losses due to changes in commodity prices, foreign currency exchange rates, equity security prices, and interest rates.
Other than normal operating expenses, cash requirements for 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.
During the fiscal year ended September 28, 2025, we made no common stock share repurchases. As of September 28, 2025, 29.8 million shares remained available for repurchase under current authorizations. Other than normal operating expenses, cash requirements for fiscal 2026 are expected to consist primarily of capital expenditures in our new and existing stores, our supply chain, and corporate facilities.
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.
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.
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%.
The “Base Rate” of interest is the highest of (i) the Federal Funds Rate plus 0.50%, (ii) Bank of America’s prime rate, (iii) Term SOFR plus 1.00% and (iv) 1.00%.
The price and availability of these commodities directly impact our results of operations, and we expect commodity prices, particularly coffee, 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 this 10-K.
The price and availability of these commodities, 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.
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). 41 Table of Contents Corporate and Other Fiscal Year Ended Sep 29, 2024 Oct 1, 2023 % Change Net revenues: Other $ 58.0 $ 24.6 135.8 % Total net revenues 58.0 24.6 135.8 Product and distribution costs 52.0 20.2 157.4 Other operating expenses 1.2 2.0 (40.0) Depreciation and amortization expenses 121.9 117.3 3.9 General and administrative expenses 1,801.0 1,707.4 5.5 Restructuring and impairments — 1.1 nm Total operating expenses 1,976.1 1,848.0 6.9 Operating loss $ (1,918.1) $ (1,823.4) 5.2 % Corporate and Other primarily consists of our unallocated corporate expenses.
Operating margin contracted 500 basis points to 47.3% , primarily driven by a decline in our North American Coffee Partnership joint venture income (approximately 350 basis points) and higher global product costs (approximately 90 basis points). 34 Table of Contents Corporate and Other Fiscal Year Ended Sep 28, 2025 Sep 29, 2024 % Change Net revenues: Other $ 119.7 $ 58.0 106.4 % Total net revenues 119.7 58.0 106.4 Product and distribution costs 111.4 52.0 114.2 Other operating expenses 0.8 1.2 (33.3) Depreciation and amortization expenses 124.5 121.9 2.1 General and administrative expenses 1,783.8 1,801.0 (1.0) Restructuring and impairments 154.4 — nm Total operating expenses 2,174.9 1,976.1 10.1 Operating loss $ (2,055.2) $ (1,918.1) 7.1 % Corporate and Other primarily consists of our unallocated corporate expenses and sales of cocoa butter to third parties.
Throughout this MD&A, we commonly discuss the following key operating metrics: • New store openings and store count • Comparable store sales • Operating margin 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.
Throughout this MD&A, we commonly discuss the following key operating metrics: • New store openings and store count • Comparable store sales • Operating margin 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 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). FINANCIAL CONDITION, LIQUIDITY, AND CAPITAL RESOURCES Cash and Investment Overview Our cash and investments were $3.8 billion and $4.2 billion as of September 29, 2024, and October 1, 2023, respectively.
FINANCIAL CONDITION, LIQUIDITY, AND CAPITAL RESOURCES Cash and Investment Overview Our cash and investments were $3.7 billion and $3.8 billion as of September 28, 2025, and September 29, 2024, respectively.
Revenue for our Channel Development segment decreased 7% in fiscal 2024 compared with fiscal 2023, primarily driven by a decline 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.
Revenue for our Channel Development segment increased 6% in fiscal 2025 compared with fiscal 2024, primarily driven by an increase in revenue in the Global Coffee Alliance.
Borrowing Capacity Credit Facilities and Commercial Paper 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.
Borrowing Capacity Credit Facilities and Commercial Paper Revolving Credit Facility 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”).
Store operating expenses as a percentage of total net revenues increased 140 basis points.
Store operating expenses as a percentage of total net revenu es increased 360 basis points . Store operating expenses as a percentage of company-operated store revenues increased 410 basis points , primarily due to deleverage (approximately 200 basis points), additional labor (approximately 160 basis points), and increased marketing (approximately 90 basis points).
Also contributing to the decline in international total net revenues were lower product and equipment sales to, and royalty revenues from, our licensees ($69 million), largely driven by continued disruptions due to multiple international conflicts, partially offset by the performance of 654 net new licensed store openings over the past 12 months.
Also contributing to the increase in revenues were higher product sales to, and royalty revenues from, our licensees ($79 million), primarily due to the opening of 378 net new licensed store over the past 12 months. Operating Margin International operating income for fiscal 2025 decrease d 9% to $950 million, compared to $1.0 billion in fiscal 2024.
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. 35 Table of Contents Financial Highlights • Total net revenues increased 1% to $36.2 billion in fiscal 2024 compared to $36.0 billion in fiscal 2023. • Consolidated operating income decreased to $5.4 billion in fiscal 2024 compared to $5.9 billion in fiscal 2023.
These actions, while driving more efficiency, accountability, and agility as a company, will lay the foundation for the future of Starbucks. 28 Table of Contents Financial Highlights • Total net revenues increased 3% to $37.2 billion in fiscal 2025 compared to $36.2 billion in fiscal 2024. • Consolidated operating inco me decreased to $2.9 billion in fiscal 2025 compared to $5.4 billion in fiscal 2024.
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 used in investing activities was $2.7 billion for fiscal 2024, compared to $2.3 billion for fiscal 2023.
Cash used in investing activities was $2.5 billion for fiscal 2025, compared to $2.7 billion for fiscal 2024. The change was primarily due to a net decrease in capital expenditures of $472.0 million driven by a reduction in retail store investments and renovations in North America. These increases were partially offset by the acquisition of 23.5 Degrees Topco Limited.
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).
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.
During fiscal 2024, we paid approximately $18 million for foreign withholding taxes related to repatriating the earnings of certain foreign subsidiaries.
During fiscal 2025, we revised our indefinite reinvestment assertions from prior years' cumulative earnings from certain foreign subsidiaries, and in the fourth quarter of fiscal 2025, we repatriated approximately $900 million of cash from foreign subsidiaries, upon which approximately $90 million in related withholding taxes were recorded and paid.
Removed
Comparable transactions for both the North America segment and the U.S. market declined 5%, partially offset by average ticket growth for both the North America segment and the U.S. market of 4%, primarily driven by annualization of pricing.
Added
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.
Removed
These decreases were partially offset by net new company-operated and licensed store openings over the past 12 months.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeQuantitative and Qualitative Disclosures About Market Risk The information required by this item is incorporated by reference to the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Commodity Prices, Availability, and General Risk Conditions” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Risk Management” in Item 7 of this Report. 49 Table of Contents
Biggest changeQuantitative and Qualitative Disclosures About Market Risk The information required by this item is incorporated by reference to the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Commodity Prices, Availability, and General Risk Conditions” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Risk Management” in Item 7 of this Report. 42 Table of Contents

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