Starbucks SBUX · USD

Segment ReportingWe have three reportable operating segments: 1) North America, which is inclusive of the U.S. and Canada; 2) International, which is inclusive of China, Japan, Asia Pacific, Europe, Middle East, Africa, Latin America, and the Caribbean; and 3) Channel Development. North America and International operations sell coffee and other beverages, complementary food, packaged coffees, single-serve coffee products, and a focused selection of merchandise through company-operated stores and licensed stores. Our North America segment is our most mature business and has achieved significant scale. Channel Development revenues include packaged coffee, tea, foodservice products, and ready-to-drink beverage sales to customers outside of our company-operated and licensed stores. Most of our Channel Development revenues are from product sales to, and royalty revenues from, Nestlé through the Global Coffee Alliance.Our CODM, who is our chief executive officer, evaluates the performance of our operating segments based primarily on net revenues and operating income, which represents earnings before other income and expenses and income taxes. Financial information and forecasts are reviewed by our CODM at the segment level, and are used to evaluate performance, monitor actual results versus forecasts, and allocate resources for the consolidated entity. Our CODM does not use total assets by segment as a basis for decision making. The accounting policies of the operating segments are the same as those described in Note 1, Summary of Significant Accounting Policies and Estimates. Consolidated revenue mix by product type (in millions):Fiscal Year EndedSep 28, 2025Sep 29, 2024Oct 1, 2023Beverage(1)$22,539.9 61 %$21,883.9 60 %$21,684.8 60 %Food(2)7,049.9 19 %6,749.2 19 %6,585.1 18 %Other(3)7,594.6 20 %7,543.1 21 %7,705.7 22 %Total$37,184.4 100 %$36,176.2 100 %$35,975.6 100 %(1) “Beverage” represents sales within our company-operated stores.(2) “Food” represents sales within our company-operated stores.(3) “Other” primarily consists of packaged and single-serve coffees and teas, royalty and licensing revenues, beverage-related ingredients, and serveware, among other items.Information by geographic area (in millions):Fiscal Year EndedSep 28, 2025Sep 29, 2024Oct 1, 2023Net revenues(1):United States$27,124.7 $26,707.4 $26,398.3 China3,160.8 3,008.2 3,081.5 Other countries6,898.9 6,460.6 6,495.8 Total$37,184.4 $36,176.2 $35,975.

Deferred RevenueDuring fiscal 2018, we licensed the rights to sell and market our products in authorized channels through the Global Coffee Alliance and received an up-front prepaid royalty from Nestlé. The up-front payment of approximately $7 billion was recorded as deferred revenue as we have continuing performance obligations to support the Global Coffee Alliance, including providing Nestlé access to certain intellectual properties and products for future resale. The up-front payment is being recognized as other revenue on a straight-line basis over the estimated economic life of the arrangement of 40 years for the ongoing access to the licenses within the contractual territories. Our obligations to maintain the Starbucks brand and other intellectual properties are generally constant throughout the term of the arrangement. Therefore, a ratable recognition pattern is reflective of how we will satisfy our performance obligations.As of September 28, 2025, the current and long-term deferred revenue related to the Nestlé up-front payment was $177.0 million and $5.6 billion, respectively. As of September 29, 2024, the current and long-term deferred revenue related to the Nestlé up-front payment was $177.0 million and $5.8 billion, respectively. During each of the fiscal years ended September 28, 2025, September 29, 2024, and October 1, 2023, we recognized $176.5 million of prepaid royalty revenue related to Nestlé.Changes in our deferred revenue balance related to our stored value cards and loyalty program (in millions):Fiscal Year Ended September 28, 2025TotalStored value cards and loyalty program at September 29, 2024$1,718.7 Revenue deferred - card activations, card reloads and Stars earned15,245.8 Revenue recognized - card and Stars redemptions and breakage(15,199.5)Other(1)(13.3)Stored value cards and loyalty program at September 28, 2025(2)$1,751.7 Fiscal Year Ended September 29, 2024TotalStored value cards and loyalty program at October 1, 2023$1,567.5 Revenue deferred - card activations, card reloads and Stars earned15,807.1 Revenue recognized - card and Stars redemptions and breakage(15,665.1)Other(1)9.2 Stored value cards and loyalty program at September 29, 2024(2)$1,718.7 (1)“Other” primarily consists of changes in the stored value cards and loyalty program balances resulting from foreign currency translation. (2)As of each of the fiscal years ended September 28, 2025, and September 29, 2024, approximately $1.

Debt 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”). Our 2025 credit facility, of which $150.0 million may be used for issuances of letters of credit, is currently set to mature on June 13, 2030. The 2025 credit facility is available for working capital, capital expenditures, and other general corporate purposes, including acquisitions and share repurchases. We have the option, subject to negotiation and agreement with the related banks, to increase the maximum commitment amount by an additional $1.0 billion. Borrowings under the 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. The applicable rate is based on the Company’s long-term credit ratings assigned by Moody’s and Standard & Poor’s rating agencies. The 2025 credit facility contains alternative interest rate provisions specifying rate calculations to be used at such time Term SOFR ceases to be available as a benchmark due to reference rate reform. The “Base Rate” of interest is the highest of (i) the Federal Funds Rate plus 0.50%, (ii) Bank of America’s prime rate, (iii) Term SOFR plus 1.00%, and (iv) 1.00%. Upon the occurrence of any event of default under the 2025 credit facility, interest on the outstanding amount of the indebtedness under the 2025 credit facility will bear interest at a rate per annum equal to 2% in excess of the interest then borne by such borrowings.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. No amounts were outstanding under our 2025 credit facility as of September 28, 2025, or our 2021 credit facility as of September 29, 2024.Short-term DebtUnder our commercial paper program, we may issue unsecured commercial paper notes up to a maximum aggregate amount outstanding at any time of $3.0 billion, with individual maturities that may vary but not exceed 397 days from the date of issue.

Income Taxes Components of earnings before income taxes (in millions):Fiscal Year EndedSep 28, 2025Sep 29, 2024Oct 1, 2023United States$1,850.1 $4,087.6 $4,488.6 Foreign657.2 882.0 913.3 Total earnings before income taxes$2,507.3 $4,969.6 $5,401.9 Provision/(benefit) for income taxes (in millions):Fiscal Year EndedSep 28, 2025Sep 29, 2024Oct 1, 2023Current taxes:U.S. federal$179.4 $681.2 $678.2 U.S. state and local120.4 210.9 235.9 Foreign362.5 328.8 422.4 Total current taxes662.3 1,220.9 1,336.5 Deferred taxes:U.S. federal30.2 10.7 117.0 U.S. state and local(11.3)(0.7)(0.8)Foreign(30.6)(23.6)(175.5)Total deferred taxes(11.7)(13.6)(59.3)Total income tax expense$650.6 $1,207.3 $1,277.2 Reconciliation of the statutory U.S. federal income tax rate with our effective income tax rate:Fiscal Year EndedSep 28, 2025Sep 29, 2024Oct 1, 2023Statutory rate21.0 %21.0 %21.0 %State income taxes, net of federal tax benefit3.4 3.3 3.4 Foreign rate differential0.3 0.3 0.4 Residual tax on foreign earnings3.6 0.4 — Foreign derived intangible income(1.6)(0.8)(0.8)Tax status change of foreign entity(1.4)— — Other, net0.6 0.1 (0.4)Effective tax rate25.9 %24.3 %23.6 %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, as reflected in Residual tax on foreign earnings.As of September 28, 2025, in certain foreign subsidiaries in which we are partially indefinitely reinvested, the gross taxable temporary difference between the accounting basis and tax basis was approximately $1.8 billion for which there could be up to approximately $180 million of unrecognized tax liability. Tax effect of temporary differences and carryforwards that comprise significant portions of deferred tax assets and liabilities (in millions):Sep 28, 2025Sep 29, 2024Deferred tax assets:Operating lease liabilities$2,646.7 $2,595.1 Stored value card liability and deferred revenue1,593.0 1,612.5 Intangible assets and goodwill 355.5 372.6 Other780.9 692.2 Total5,376.1 5,272.4 Valuation allowance(189.2)(194.5)Total deferred tax asset, net of valuation allowance5,186.9 5,077.9 Deferred tax liabilities:Operating lease, right-of-use assets(2,466.8)(2,483.7)Property, plant and equipment(641.3)(580.8)Other(302.3)(267.

LeasesThe components of lease costs (in millions): Year EndedSep 28, 2025Sep 29, 2024Oct 1, 2023Operating lease costs(1)$2,097.0 $1,723.5 $1,601.0 Variable lease costs1,245.7 1,130.7 1,050.3 Short-term lease costs21.0 26.8 28.0 Total lease costs$3,363.7 $2,881.0 $2,679.3 (1)Includes immaterial amounts of sublease income and rent concessions.The following table includes supplemental information (in millions): Year EndedSep 28, 2025Sep 29, 2024Oct 1, 2023Cash paid related to operating lease liabilities$1,901.4 $1,672.5 $1,657.2 Operating lease liabilities arising from obtaining ROU assets(1)1,980.8 2,263.9 1,893.4 Sep 28, 2025Sep 29, 2024Oct 1, 2023Weighted-average remaining operating lease term8.6 years8.6 years8.5 yearsWeighted-average operating lease discount rate3.7 %3.4 %3.1 %(1)Includes leases obtained in the acquisition of 23.5 Degrees Topco Limited in the first quarter of fiscal 2025.Finance lease assets are recorded in property, plant and equipment, net with the corresponding lease liabilities included in accrued liabilities and other long-term liabilities on the consolidated balance sheet. These balances were not material as of September 28, 2025, and September 29, 2024. Finance lease costs were also immaterial for the fiscal years ended September 28, 2025, September 29, 2024, and October 1, 2023.Minimum future maturities of operating lease liabilities (in millions):Fiscal YearTotal 2026$1,940.6 20271,757.3 20281,548.4 20291,360.4 20301,190.3 Thereafter4,592.2 Total lease payments12,389.2 Less imputed interest(1,852.5)Total$10,536.7 As of September 28, 2025, we have entered into operating leases that have not yet commenced of $823.5 million, primarily related to real estate leases. These leases will commence between fiscal year 2026 and fiscal year 2028 with lease terms of 5 years to 20 years. Lease exit costs associated with our restructuring efforts primarily relate to the closure of certain Starbucks company-operated stores, and are recognized in line with store closure timing. Total lease exit costs of $239.3 million were recorded in restructuring and impairments on the consolidated statement of earnings in fiscal 2025. See Note 18, Restructuring, to the consolidated financial statements included in Item 8 of Part II of this 10-K, for further discussion.

Acquisitions and DivestituresFiscal 2025On October 14, 2024, we acquired a 100% ownership interest in 23.5 Degrees Topco Limited, a U.K. licensed business partner, to expand our portfolio of company-operated stores and enhance the coffeehouse experience for customers. The acquisition converted 113 licensed stores to company-operated stores within our International operating segment.The assets acquired and liabilities assumed are included in our International operating segment. Assets acquired primarily include operating lease right-of-use assets, intangible assets, goodwill, and property, plant and equipment. The intangible assets acquired as part of this transaction include reacquired licensee agreement rights, which will be amortized over the estimated useful life. In addition, we assumed various liabilities, primarily consisting of operating lease liabilities. The transaction is not material to our consolidated financial statements.Fiscal 2023On January 13, 2023, we sold the assets, primarily consisting of intellectual properties associated with the Seattle’s Best Coffee brand, to Nestlé for $110.0 million. The transaction resulted in a pre-tax gain of $91.3 million, which was included in gain from sale of assets on our consolidated statement of earnings for the fiscal year ended October 1, 2023. Results from Seattle’s Best Coffee operations prior to the sale are reported in our Channel Development operating segment.

CybersecurityRisk Management and StrategyStarbucks 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. 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. 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.Starbucks assesses, measures, and reports on cybersecurity risk at operational, program or management, and strategic or executive oversight levels. We maintain and periodically update written cybersecurity policies, standards, and controls, which are reviewed by a cross-functional management-level committee and designed to align with business objectives, regulatory requirements, and industry best practices. 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. 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. 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.

Inventories (in millions)Sep 28, 2025Sep 29, 2024Coffee:Unroasted$911.2 $665.1 Roasted342.0 251.9 Other merchandise held for sale (1)399.7 384.6 Packaging and other supplies532.7 475.7 Total$2,185.6 $1,777.3 (1) “Other merchandise held for sale” includes, among other items, serveware, food, and tea. Inventory levels vary due to seasonality, commodity market supply, and price fluctuations. As of September 28, 2025, we had committed to purchasing green coffee totaling $129 million under fixed-price contracts and an estimated $1.1 billion under price-to-be-fixed contracts. A portion of our price-to-be-fixed contracts are effectively fixed through the use of futures. See Note 3, Derivative Financial Instruments, for further discussion. Price-to-be-fixed contracts are purchase commitments whereby the quality, quantity, delivery period, and other negotiated terms are agreed upon, but the date, and therefore the price, at which the base “C” coffee commodity price component will be fixed has not yet been established. For most contracts, either Starbucks or the seller has the option to “fix” the base “C” coffee commodity price prior to the delivery date. For other contracts, Starbucks and the seller may agree upon pricing parameters determined by the base “C” coffee commodity price. Until prices are fixed, we estimate the total cost of these purchase commitments. We believe, based on established relationships with our suppliers and continuous monitoring, the risk of non-delivery on these purchase commitments is remote.