AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-3: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 6/6 · 29/10/2026
Moat50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 3/4 · Trademark licensing, actual international licensee revenue growth and retained China brand ownership demonstrate a monetizable intangible asset. This supports a current advantage without establishing dominance or other moat mechanisms.
durability · 2/4 · Licensing across periods and substantial active membership support persistence. Consecutive fiscal 2024 and 2025 traffic declines and investments that failed to improve customer behavior constrain demonstrated durability.
customer dependency · 1/4 · Active membership demonstrates engagement, but traffic declines show fragile demand rather than dependence. No material customer switching friction is established; the limited Shop subscription channel expressly permits pausing or cancellation.
erosion resilience · 2/4 · Recovering comparable transactions and existing international licensee growth demonstrate resilience after weakness. North American licensee declines and continued three-quarter margin pressure show that recovery remains uneven.
Pricing power44
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · Fiscal 2024 and 2025 ticket increases partly reflected prior pricing while transactions declined. Fiscal 2026 comparable transactions rose 3.6% and ticket 2.3%, but price and mix are not separated. These observed outcomes support mixed pricing power without attributing traffic declines solely to pricing.
retention · 2/4 · Fiscal 2025 active U.S. Rewards membership of 34.2 million, up 1%, and subsequent transaction recovery support repeat engagement indirectly. Earlier traffic declines prevent a strong assessment; cohort retention is undisclosed.
margin resilience · 1/4 · Operating income fell materially through fiscal 2025. Fiscal 2026 three-quarter operating margin remained below the prior year despite comparable-sales recovery. Quarterly improvement partly reflected China conversion and tariff refunds; pricing has not demonstrated robust protection against cost pressure.
contractual freedom · 2/4 · Shop subscription terms explicitly allow price changes with advance notice and an option to cancel, establishing bounded repricing freedom. Starbucks also discloses limited ability to pass increased costs to licensees. These mixed disclosures support assessment, while cafe-wide and licensed-store contractual pricing authority remains unestablished.
Predictability100
5 consecutive published annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 100.00
- Revenue growth volatility (pp)
- 4.86
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 3.08
- observedAnnualPeriods
- 5.00
Financial strength18
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or reported pretax profit plus reported gross interest expense. Reported EBIT is distinct from GAAP operating income and gross interest. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 20.25
- netDebtEbitGrade
- 12.45
- interestCoverageGrade
- 40.11
- currentRatioGrade
- 0.00
- Debt / FCF (x)
- 6.58
- Net debt / operating income (x)
- 4.38
- Interest coverage (x)
- 5.41
- Current ratio (x)
- 0.72
Capital allocation99
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or EBIT calculated from reported pretax profit plus reported gross interest expense; the issuer-reported EBIT is distinct from GAAP operating income and gross interest; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. ROIC remains undefined for nonpositive invested capital; the explicit asset-return alternative does not change the ROIC chart. Missing financial inputs alone never trigger an alternative. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 114.80
- 3-year average dilution (%)
- -0.50
- 3-year average SBC / revenue (%)
- 0.85
- cashConversionGrade
- 96.85
Management50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Fiscal 2026 three-quarter operating cash flow of $3.604 billion covered $887.8 million of capital spending and $2.118 billion of dividends. Debt repayments were $2.816 billion alongside $2.544 billion of divestiture proceeds, with no repurchases. These actions support discipline, offset by earlier ineffective investments and substantial restructuring; transaction value creation is not established.
incentive alignment · 2/4 · Multiyear performance equity and actual fiscal 2025 bonuses at 54.8% of target demonstrate performance sensitivity. Full individual-performance payouts and adjusted financial metrics temper alignment. Turnaround grants were approved in June 2025 but are eligible to vest after fiscal 2027; no achieved vesting is established, and ownership amounts are missing.
execution · 2/4 · Comparable transaction recovery, international licensee growth and completion of the China transaction demonstrate progress. Execution is assessed indirectly from operating outcomes and a completed transaction, balanced against earlier unsuccessful investments and persistent cost pressure. Management causality and future turnaround success remain unproven.
governance · 2/4 · Independent committees, a lead independent director, annual majority-vote elections and an auditor opinion of effective financial controls support oversight. The combined chair and CEO role limits separation. March 2026 votes establish shareholder decisions, including approval of a supermajority-reform request, but do not prove its implementation or exceptional oversight effectiveness.
Evidence
We also sell a variety of coffee and tea products and license our trademarks through other channels, such as licensed stores as well as grocery and foodservice through our Global Coffee Alliance with Nestlé S.A.
2025 Form 10-K, Item 1 Business: trademark licensing and Global Coffee Alliance · Filed 14/11/2025
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.
2025 Form 10-K, International revenues: licensee product sales and royalties · Filed 14/11/2025
38
Table of Contents
In the third quarter of fiscal 2026, the transaction closed, and under the terms of the agreement, funds managed by Boyu Capital acquired a 60% stake in Starbucks China retail operations, while Starbucks retained a 40% ownership interest and continues to own and license the brand and intellectual property to the joint venture.
2026 third-quarter Form 10-Q, China transaction completion and retained brand ownership · Filed 29/07/2026
Licensed stores revenue increased $162 million, primarily driven by higher product sales to, and royalty revenues from, our existing licensees in our International segment ($182 million) and our newly-formed China joint venture ($53 million) following the conversion of Starbucks retail operations in China to our licensed joint venture model.
2026 third-quarter Form 10-Q, licensed-store revenue changes · Filed 29/07/2026
U.S. Starbucks Rewards Members
(90-day active)
34.2M
+1%
year-over-year
PATH FORWARD: “BACK TO STARBUCKS”
We are focused on bringing customers back to our coffeehouses and returning to growth.
2026 proxy, Company Overview: fiscal 2025 active U.S. Rewards membership · Filed 26/01/2026
Company-operated stores revenue increased $628 million, primarily driven by a 5.9% increase in comparable store sales ($1.2 billion) attributable to a 3.6% increase in comparable transactions and a 2.3% increase in average ticket.
2026 third-quarter Form 10-Q, company-operated revenue: comparable sales, transactions and ticket · Filed 29/07/2026
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).
2024 Form 10-K, revenues: comparable transactions and pricing · Filed 20/11/2024
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.
2025 Form 10-K, revenues: comparable transactions and prior-year pricing · Filed 14/11/2025
Our performance was lower-than-expected as a result of a pronounced customer traffic decline, reflecting our targeted and accelerated investments not improving customer behaviors as intended, as well as the macroeconomic and competitive environment in China that further pressured our results.
2024 Form 10-K, performance discussion: unsuccessful investments and China competitive pressure · Filed 20/11/2024
This was partially offset by lower equipment sales to our licensees globally ($52 million) and a decrease in product sales to, and royalty revenues from, our licensees in our North America segment ($21 million).
2026 third-quarter Form 10-Q, licensed revenues: North American decline and equipment sales · Filed 29/07/2026
The specialty coffee market is highly competitive across product quality, innovation, service, convenience (e.g., delivery and mobile ordering), and price.
2025 Form 10-K, competition passage: dimensions of specialty-coffee competition · Filed 14/11/2025
40 Table of Contents Operating Expenses Quarter Ended Three Quarters Ended Jun 28, 2026 Jun 29, 2025 $ Change Jun 28, 2026 Jun 29, 2025 Jun 28, 2026 Jun 29, 2025 $ Change Jun 28, 2026 Jun 29, 2025 As a % of Total Net Revenues As a % of Total Net Revenues Product and distribution costs $ 2,828.6 $ 2,955.5 $ (126.9) 30.3 % 31.3 % $ 9,310.7 $ 8,586.8 $ 723.9 32.4 % 31.1 % Store operating expenses 4,197.4 4,344.8 (147.4) 45.0 45.9 13,158.3 12,723.9 434.4 45.7 46.1 Other operating expenses 131.9 151.6 (19.7) 1.4 1.6 393.6 442.8 (49.2) 1.4 1.6 Depreciation and amortization expenses 361.6 427.6 (66.0) 3.9 4.5 1,125.8 1,254.0 (128.2) 3.9 4.5 General and administrative expenses 598.8 677.2 (78.4) 6.4 7.2 1,855.7 1,975.2 (119.5) 6.5 7.2 Restructuring and impairments 302.6 20.8 281.8 3.2 0.2 415.8 137.0 278.8 1.4 0.5 Total operating expenses 8,420.9 8,577.5 (156.6) 90.3 90.7 26,259.9 25,119.7 1,140.2 91.3 91.0 Income from equity investees 78.6 57.1 21.5 0.8 0.6 189.9 162.7 27.2 0.7 0.6 Operating income $ 980.4 $ 935.6 $ 44.8 10.5 % 9.9 % $ 2,699.3 $ 2,658.4 $ 40.9 9.4 % 9.6 % Store operating expenses as a % of company-operated stores revenue 55.9 % 55.6 % 56.0 % 55.6 % For the quarter ended June 28, 2026, compared with the quarter ended June 29, 2025 Product and distribution costs as a percentage of total net revenues decreased 100 basis points for the third quarter of fiscal 2026, primarily due to the conversion of Starbucks retail operations in China to our licensed joint venture model in the third quarter of fiscal 2026 (approximately 130 basis points), lower inflation paired with tariff refunds (approximately 80 basis points), partially offset by mix shift (approximately 110 basis points).
2026 third-quarter Form 10-Q, operating expenses and margins: quarterly and three-quarter results · Filed 29/07/2026
We supply strategic products, including coffee, to our licensees, and we may have limited ability to pass along increased costs.
2025 Form 10-K, supply risk: limited ability to pass increased costs to licensees · Filed 14/11/2025
(in millions) North America International Channel Development Corporate and Other Total Fiscal 2025 Total net revenues $ 27,373.1 $ 7,819.9 $ 1,871.7 $ 119.7 $ 37,184.4 Product and distribution costs 7,628.7 2,749.8 1,168.3 111.4 11,658.2 Store operating expenses 13,973.3 3,085.6 — — 17,058.9 Other operating expenses 281.6 242.0 60.2 0.8 584.6 Depreciation and amortization expenses 1,196.3 363.9 — 124.5 1,684.7 General and administrative expenses 483.3 344.3 5.8 1,783.8 2,617.2 Restructuring and impairments 653.2 82.5 1.9 154.4 892.0 Total operating expenses 24,216.4 6,868.1 1,236.2 2,174.9 34,495.6 Income from equity method investees — (1.8) 249.6 — 247.8 Operating income/(loss) $ 3,156.7 $ 950.0 $ 885.1 $ (2,055.2) $ 2,936.6 Interest income and other, net 113.3 Interest expense (542.6) Earnings before income taxes $ 2,507.3 79 Table of Contents (in millions) North America International Channel Development Corporate and Other Total Fiscal 2024 Total net revenues $ 27,009.5 $ 7,338.9 $ 1,769.8 $ 58.0 $ 36,176.2 Product and distribution costs 7,478.0 2,575.2 1,075.4 52.0 11,180.6 Store operating expenses 12,467.1 2,819.4 — — 15,286.5 Other operating expenses 280.9 225.1 58.4 1.2 565.6 Depreciation and amortization expenses 1,052.4 338.3 — 121.9 1,512.6 General and administrative expenses 375.8 338.8 7.7 1,801.0 2,523.3 Total operating expenses 21,654.2 6,296.8 1,141.5 1,976.1 31,068.6 Income from equity method investees — 3.6 297.6 — 301.2 Operating income/(loss) $ 5,355.3 $ 1,045.7 $ 925.9 $ (1,918.1) $ 5,408.8 Interest income and other, net 122.8 Interest expense (562.0) Earnings before income taxes $ 4,969.6 (in millions) North America International Channel Development Corporate and Other Total Fiscal 2023 Total net revenues $ 26,569.6 $ 7,487.6 $ 1,893.8 $ 24.6 $ 35,975.6 Product and distribution costs 7,530.4 2,608.4 1,250.1 20.2 11,409.1 Store operating expenses 11,959.2 2,761.1 — — 14,720.3 Other operating expenses 263.8 219.0 54.6 2.0 539.4 Depreciation and amortization expenses 910.1 335.1 0.1 117.3 1,362.6 General and administrative expenses 389.7 335.8 8.4 1,707.4 2,441.3 Restructuring and impairments 20.7 — — 1.1 21.8 Total operating expenses 21,073.9 6,259.4 1,313.2 1,848.0 30,494.5 Income from equity method investees — 2.7 295.7 — 298.4 Other segment items(1) — — 91.3 — 91.3 Operating income/(loss) $ 5,495.7 $ 1,230.9 $ 967.6 $ (1,823.4) $ 5,870.8 Interest income and other, net 81.2 Interest expense (550.1) Earnings before income taxes $ 5,401.9 (1) Includes gain from sale of assets.
2025 Form 10-K, segment results: fiscal 2023–2025 operating income and restructuring · Filed 14/11/2025
5 Table of Contents STARBUCKS CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions, unaudited) Three Quarters Ended Jun 28, 2026 Jun 29, 2025 OPERATING ACTIVITIES: Net earnings including noncontrolling interests $ 1,849.0 $ 1,723.5 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 1,210.8 1,315.5 Deferred income taxes, net 252.1 48.1 Income earned from equity method investees, net (187.8) (184.4) Distributions received from equity method investees 152.9 186.5 Net gain resulting from divestiture of certain operations (536.3) — Stock-based compensation 290.4 244.3 Non-cash lease costs 1,008.1 1,104.9 Loss on disposal, impairment, and accelerated amortization of assets 398.2 143.0 Other 6.3 11.4 Cash provided by/(used in) changes in operating assets and liabilities: Accounts receivable (134.2) (46.4) Inventories (144.8) (477.6) Income taxes payable 362.7 50.7 Accounts payable 144.4 291.1 Deferred revenue 51.2 (5.0) Operating lease liability (1,281.9) (1,144.0) Other operating assets and liabilities 163.0 104.1 Net cash provided by (used in) operating activities 3,604.1 3,365.7 INVESTING ACTIVITIES: Purchases of investments (133.6) (298.2) Sales of investments 22.3 1.1 Maturities and calls of investments 141.7 276.9 Additions to property, plant and equipment (887.8) (1,849.5) Acquisitions, net of cash acquired — (177.1) Net proceeds from the divestiture of certain operations 2,544.2 — Other (116.4) (48.1) Net cash provided by (used in) investing activities 1,570.4 (2,094.9) FINANCING ACTIVITIES: Net proceeds from issuance of short-term debt 2.5 2.4 Repayments of short-term debt — (7.8) Net proceeds from issuance of long-term debt — 1,748.5 Repayments of long-term debt (2,815.9) — Proceeds from issuance of common stock 51.9 59.6 Cash dividends paid (2,118.0) (2,078.1) Minimum tax withholdings on share-based awards (64.7) (80.6) Other — (9.2) Net cash provided by (used in) financing activities (4,944.2) (365.2) Effect of exchange rate changes on cash and cash equivalents (0.3) (19.2) Net increase/(decrease) in cash and cash equivalents 230.0 886.4 CASH AND CASH EQUIVALENTS: Beginning of period 3,219.8 3,286.2 End of period $ 3,449.8 $ 4,172.6 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Interest, net of capitalized interest $ 457.4 $ 392.5 Income taxes $ 413.6 $ 568.1 See Notes to Consolidated Financial Statements.
2026 third-quarter Form 10-Q, consolidated cash flows for three quarters · Filed 29/07/2026
During the three quarters ended June 28, 2026, and June 29, 2025, we made no share repurchases.
2026 third-quarter Form 10-Q, share repurchases · Filed 29/07/2026
Element Form Objectives and Basis Base Salary Cash • Attract and retain highly qualified executives to drive our success Annual Incentive Bonus Cash • Drive short-term Company performance and promote our financial goals • Actual payout based on financial performance against pre-established goals for adjusted net revenue and adjusted operating income and individual performance Long-term Incentive PRSUs (60%) and time-based RSUs (40%) • Drive long-term Company performance, align interests of executives with those of shareholders, and retain executives through long-term vesting and potential wealth accumulation • PRSUs are earned based on three-year adjusted EPS performance and three-year comparable store sales measured against annual targets that are established at the beginning of each year in the performance period, subject to downward or upward adjustment of up to 25% based on our relative TSR performance measured over a cumulative three-year period.
2026 proxy, executive compensation: annual incentives and multiyear equity design · Filed 26/01/2026
Each of our NEOs who was eligible to earn an annual cash incentive award under the Executive Management Bonus Plan earned an award equal to 54.8% of their target bonus opportunity based on our financial and operational results (payout of 39.7% of target) and their individual performance (payout of 100% of target) against their shared goals.
2026 proxy, executive compensation: actual fiscal 2025 bonus outcomes · Filed 26/01/2026
“Back to Starbucks” PRSU Program
In June 2025, the independent members of the Board of Directors and the Compensation Committee approved a “Back to Starbucks” grant of PRSUs with a target value of $6 million for our ceo and our executive vice presidents and a target value of $1 million for our senior vice presidents.
2026 proxy, executive compensation: June 2025 approval of turnaround PRSU grants · Filed 26/01/2026
The awards will be eligible to vest following our fiscal year 2027 based on achievement of the pre-determined goals.
2026 proxy, turnaround PRSU program: eligibility to vest after fiscal 2027 · Filed 26/01/2026
As part of this review, the board has determined that the current leadership structure — with a combined board chair and ceo, a lead independent director, and all board committees composed entirely of independent directors — is appropriate for the Company at this time.
2026 proxy, governance: combined chair and CEO, independent lead director and committees · Filed 26/01/2026
• Directors are elected annually by majority vote.
2026 proxy, governance: annual majority-vote director elections · Filed 26/01/2026
In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 28, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
2025 Form 10-K, auditor opinion on internal control over financial reporting · Filed 14/11/2025
At the Annual Meeting, the shareholders approved a shareholder proposal requesting supermajority shareholder voting requirements be replaced with majority voting requirements.
March 30, 2026 Form 8-K, annual meeting: approved request to replace supermajority requirements · Filed 30/03/2026
At the Annual Meeting, the shareholders did not approve a shareholder proposal requesting adoption of an independent board chair policy.
March 30, 2026 Form 8-K, annual meeting: independent-chair proposal not approved · Filed 30/03/2026
Prices are subject to change. In the event of a price change, we will notify you in advance and provide an option to cancel before the new rate takes effect.
Starbucks Shop subscription terms, retrieved October 19, 2026: price changes, advance notice and cancellation · Retrieved 19/10/2026
STARBUCKS SUBSCRIPTION TERMS & CONDITIONS
CONTACT & CUSTOMER SUPPORT
ADDITIONAL TERMS
These Terms apply to your access to, use of, and purchases through the Starbucks Shop website, shop.starbucks.com, in the United States ("Starbucks Shop"), which is operated by Starbucks Corporation or its respective subsidiaries, licensees and affiliated companies (collectively, "Starbucks").
Starbucks Shop terms, retrieved October 19, 2026: scope limited to U.S. Shop website purchases · Retrieved 19/10/2026
You may skip your next order, pause your subscription indefinitely, or cancel your subscription through your Starbucks® Shop online account or by either calling customer service at (800) 395-0591 (during support Monday through Friday, 8 a.m.
Starbucks Shop subscription terms, retrieved October 19, 2026: skipping, pausing and cancellation · Retrieved 19/10/2026
Store operating expenses as a percentage of company-operated store revenues increased 140 basis points, primarily due to investments in store partner wages and benefits (approximately 170 basis points), deleverage (approximately 80 basis points), and increased promotional activity (approximately 70 basis points), partially offset by in-store operational efficiencies (approximately 170 basis points).
2024 Form 10-K, store operating expenses: promotional activity, labor investment and efficiencies · Filed 20/11/2024
