10-K – 2025-11-14 – sbux-20250928.htm

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.
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. 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.

  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 

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Item 6. [Reserved]

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion of our financial condition and results of operations in conjunction with the financial statements and the notes thereto included elsewhere in this 10-K. The following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Readers are cautioned that these forward-looking statements are subject to risks, uncertainties, and assumptions that are difficult to predict, including those identified above, under Risk Factors in Part I, Item 1A of this 10-K, and elsewhere herein. Therefore, our actual results could differ materially from those discussed in the forward-looking statements. We undertake no obligation to revise or update any forward-looking statements for any reason. Please also see the cautionary language at the beginning of Part I of this 10-K regarding forward-looking statements.
General
Our fiscal year ends on the Sunday closest to September 30. 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. 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.

Overview
We have three reportable operating segments: 1) North America, which is inclusive of the U.S. and Canada; 2) International, which is inclusive of China, Japan, Asia Pacific, Europe, Middle East, Africa, Latin America, and the Caribbean; and 3) Channel Development. Unallocated corporate expenses are reported within Corporate and Other.
We believe our financial results and long-term growth model will continue to be driven by new store openings, comparable store sales, and operating margin management, underpinned by disciplined capital allocation. Comparable store sales includes company-operated stores open 13 months or longer, and exclude the effects of foreign currency exchange rates. Stores that are temporarily closed remain in comparable store sales while permanent store closures are removed in the month following closure. We believe these key operating metrics are useful to investors because management uses these metrics to assess the growth of our business and the effectiveness of our marketing and operational strategies. Throughout this MD&A, we commonly discuss the following key operating metrics:
• 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 investments include the Green Apron Service model, additional investments in staffing and hours at the right times to deliver enhanced customer service, and the Leadership Experience 2025, a conference designed to empower and motivate our retail leaders to accelerate our “Back to Starbucks” strategy. Consolidated net revenues increased 3% to $37.2 billion in fiscal 2025 compared to $36.2 billion in fiscal 2024, primarily driven by incremental revenues from net new company-operated stores over the past 12 months, an increase in revenue in the Global Coffee Alliance, and incremental revenue from the acquisition of 23.5 Degrees Topco Limited, a U.K. licensed business partner, partially offset by a decrease in comparable store sales and a decline in our licensed store business.
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. 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.
For the International segment, revenue increased 7% in fiscal 2025 compared to fiscal 2024, primarily driven by net new company-operated and licensed store openings over the past 12 months, incremental net revenue from the conversion of 113 licensed stores to company-operated stores following the acquisition of 23.5 Degrees Topco Limited during the first quarter of fiscal 2025, and higher product and equipment sales to, and royalty revenues from, our licensees.
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.
In support of our “Back to Starbucks” strategy, we completed our assessment of our coffeehouse portfolio late in the fourth quarter and made decisions to close stores that did not demonstrate a viable path to profitability, or meet our standards of delivering a warm, welcoming space for our customers and partners. Our store closures in North America were substantially
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completed in fiscal 2025 and the International store closures are expected to be completed in the first half of fiscal 2026. As a result of these closures, we expect a fiscal 2026 reduction in our baseline North America company-operated revenues, partially offset by sales transfer to nearby coffeehouses that remain open. We also expect the future impact to operating margins to be slightly accretive. With a healthier base of coffeehouses, we see meaningful opportunity for disciplined growth. We anticipate that these actions, along with simplifying our broader support organization, will allow us to restructure, redeploy, and refocus our resources on priorities that we believe will deliver long-term sustainable business growth.
We expect that the macroeconomic challenges we have been experiencing, including impacts from new tariffs and dynamic coffee prices, will continue; however, we are encouraged by the results we have seen from our “Back to Starbucks” initiatives. Following our Green Apron Service model going live across our full U.S company-operated store portfolio in the fourth quarter of fiscal 2025, we are focused on empowering coffeehouse leaders to take ownership of sustaining the model as our permanent way of working, which we expect to enhance the customer experience and drive future transaction growth. Further, as announced in early November 2025, we look forward to working with our new strategic joint venture partner, Boyu Capital, to accelerate long-term growth in China. We believe, through strategic prioritization, that we are taking the right actions now and in the future, specifically through our investments in store partners, uplifting the coffeehouse experience through disciplined capital deployment, introducing new food and beverage platforms, reimagining the Starbucks rewards program, and enhancing support for our licensee partners. These actions, while driving more efficiency, accountability, and agility as a company, will lay the foundation for the future of Starbucks.
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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. Fiscal 2025 operating margin was 7.9% compared to 15.0% in fiscal 2024. Operating margin contraction of 710 basis points was primarily due to restructuring costs ass ociated with the closure of coffeehouses and simplification of our support organization (approximately 240 basis points) , deleverage (approximately 210 basis points), investments in support of “Back to Starbucks,” which were largely in labor hours (approximately 130 basis points), and inflation (approximately 80 basis points).
• Diluted earnings per share (“EPS”) for fiscal 2025 declined to $1.63, compared to EPS of $3.31 in fiscal 2024. 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.

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.

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).
Company-operated store revenue increased $979 million, primarily driven by net new company-operated store growth of 5%, or 1,010 stores, over the past 12 months ($1.2 billion), prior to the 627 restructuring closures late in the fourth quarter of fiscal 2025, and incremental revenue from the conversion of 113 licensed stores to company-operated stores ($131 million) following the acquisition of 23.5 Degrees Topco Limited. Partially offsetting this increase was a 1% decline in comparable store sales ($408 million), attributable to a 2% decline in comparable transactions, partially offset by a 1% increase in average ticket, primarily due to annualization of prior year pricing.
Licensed stores revenue decreased $155 million, primarily driven by lower product and equipment sales to, and royalty revenues from, our licensees in our North America segment ($143 million), the impact of the acquisition of 23.5 Degrees Topco Limited ($36 million), and by unfavorable foreign currency translation impacts ($22 million). These decreases were partially offset by higher product sales to, and royalty revenues from, our licensees in our International segment ($79 million).
Other 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).
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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).
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).
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).
Restructuring and impairments were $892 million, largely due to costs associated with the closure of coffeehouses and simplification of our support organization. See Note 1 8 , Restructuring, to the consolidated financial statements included i n Item 8 of Part II of this 10-K, for further discussion.
Income from equity investees decreased $53.4 million, primarily due to lower income from our North American Coffee Partnership joint venture.
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.
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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.
Interest expens e decreased $19 million, primarily due to savings from cross-currency interest rate hedging, partially offset by higher interest rates on refinanced long-term debt.
The effective tax rate for fiscal 2025 was 25.9% compared to 24.3% for fiscal 2024.The increase was primarily due to the discrete impact of changes in indefinite reinvestment assertions for certain foreign entities in the third quarter of fiscal 2025 (approximately 290 basis points), partially offset by the discrete impact of a tax status change for a certain foreign entity in the first quarter of fiscal 2025 (approximately 120 basis points). 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.
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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. 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. Also contributing were lower product and equipment sales to, and royalty revenues from, our licensees ($143 million) and the impact of unfavorable foreign currency translation ($42 million).
Operating Margin
North America operating income for fiscal 2025 decr eased 41% to $3.2 billion, compared to $5.4 billion in fiscal 2024. Operating 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).
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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. 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. 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).
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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).
Operating Margin
Channel Development operating income for fiscal 2025 decreas ed 4% to $885 million, compared to $926 million in fiscal 2024. 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).
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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. 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 los s increased 7% to $2.1 billion for fiscal 2025 compared to $1.9 billion for fiscal 2024, largely due to costs associated with the restructuring of our support organization, primarily severance costs.

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. We actively manage our cash and investments in order to internally fund operating needs, make scheduled interest and principal payments on our borrowings, fund acquisitions, and return cash to shareholders through common stock cash dividend payments and share repurchases. Our investment portfolio primarily includes highly liquid available-for-sale securities, including corporate debt securities and 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.
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”).
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.
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Our total available contractual borrowing capacity for general corporate purposes was $3.0 billion as of the end of fiscal 2025.
Commercial Paper
Under our commercial paper program, we may issue unsecured commercial paper notes up to a maximum aggregate amount outstanding at any time of $3.0 billion, with individual maturities that may vary but not exceed 397 days from the date of issue. Amounts outstanding under the commercial paper program are required to be backstopped by available commitments under our 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. As of September 28, 2025, and September 29, 2024, we had no borrowings outstanding under our commercial paper program.
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. 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. 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.
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.
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.
Use of Cash
We expect to use our available cash and investments, including, but not limited to, additional potential future borrowings under the credit facilities, commercial paper program, and the issuance of debt to support and invest in our core businesses, including investing in new ways to serve our customers and supporting our store partners, repaying maturing debts, returning cash to shareholders through common stock cash dividend payments and discretionary share repurchases, and investing in new business opportunities related to our core and developing businesses. Furthermore, we may use our available cash resources to make proportionate capital contributions to our investees. We may also seek strategic acquisitions to leverage existing capabilities and further build our business. Acquisitions may include increasing our ownership interests in our investees. Any decisions to increase such ownership interests will be driven by valuation and fit with our ownership strategy.
We believe that net future cash flows generated from operations and existing cash and investments both domestically and internationally, combined with our ability to leverage our balance sheet through the issuance of debt, will be sufficient to finance capital requirements for our core businesses as well as shareholder distributions for at least the next 12 months. We are currently not aware of any trends or demands, commitments, events, or uncertainties that will result in, or that are reasonably likely to result in, our liquidity increasing or decreasing in any material way that will impact our capital needs during or beyond the next 12 months. We have borrowed funds and continue to believe we have the ability to do so at reasonable interest rates; however, additional borrowings would result in increased interest expense in the future. In this regard, we may incur additional debt, within targeted levels, as part of our plans to fund our capital programs, including cash returns to shareholders through future dividends and discretionary share repurchases, refinancing debt maturities, as well as investing in new business opportunities. If necessary, we may pursue additional sources of financing, including both short-term and long-term borrowings and debt issuances.
We regularly review our cash positions and our determination of partial indefinite reinvestment of foreign earnings. In the event we determine that all or another portion of such foreign earnings are no longer indefinitely reinvested, we may be subject to additional foreign withholding taxes, which could be material. Any foreign earnings that are not indefinitely reinvested may be repatriated at management’s discretion. During 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. We continue to be indefinitely reinvested in the remainder of our foreign earnings, for which no tax accrual has been recorded.
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On July 4, 2025, the President of the United States signed and enacted tax legislation into law through a reconciliation bill titled “An Act to provide for reconciliation pursuant to title II of H. Con. Res. 14,” commonly referred to as the “One Big Beautiful Bill Act.” This legislation was enacted during the fourth quarter of fiscal 2025; therefore, the fiscal 2025 accounting impacts from this tax law change are included in our fourth quarter of fiscal 2025 results. This tax law change did not result in a material impact to our consolidated financial statements. See Note 14 , Income Taxes, to the consolidated financial statements included in Item 8 of Part II of this 10-K, for further discussion.
During each of the first three quarters of fiscal 2024, we declared a cash dividend to shareholders of $0.57 per share. 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 . 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. 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. Total capital expenditures for fiscal 2026 ar e expected to be moderately lower than fiscal 2025.
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.
(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.
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. These impacts were partially offset by a net increase of $713.2 million in loss on disposal, impairment, and accelerated amortization of assets primarily driven by restructuring costs as part of the “Back to Starbucks” strategy and a net increase in accounts payable, primarily due to payment timing.
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.
Cash used in financing activities was $2.3 billion for fiscal 2025, compared to $3.7 billion for fiscal 2024. The change was primarily due to no current year share repurchases of our common stock compared to the prior year.
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COMMODITY PRICES, AVAILABILITY, AND GENERAL RISK CONDITIONS
Commodity price risk represents our primary market risk, generated by our purchases of green coffee and dairy products, among other items. We purchase, roast, and sell high-quality arabica coffee and related products, and risk arises from the price volatility of green coffee. In addition to coffee, we also purchase significant amounts of dairy products to support the needs of our company-operated stores. The price and availability of these commodities, including impacts from volatility in green coffee prices and new tariffs, directly impact our results of operations, and we expect commodity prices, particularly coffee, to continue to impact future results of operations. For additional details see Product Supply in Item 1 of Part I of this 10-K, as well as Risk Factors in Item 1A of Part I of this 10-K.

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. 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 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. We also use cross-currency swaps to hedge against changes in the fair value of our net investments in foreign operations. Excluding interest rate hedging instruments and cross currency swaps, hedging instruments generally do not have maturities in excess of three years. Refer to Note 1 , Summary of Significant Accounting Policies and Estimates, and Note 3 , Derivative Financial Instruments, to the consolidated financial statements included in Item 8 of Part II of this 10-K for further discussion of our hedging instruments.
The sensitivity analyses disclosed below provide only a limited, point-in-time view of the market risk of the financial instruments discussed. The actual impact of the respective underlying rates and price changes on the financial instruments may differ significantly from those shown in the sensitivity analyses.
Commodity Price Risk
We purchase commodity inputs, primarily coffee, dairy products, diesel, cocoa, sugar, and other commodities, that are used in our operations and are subject to price fluctuations that impact our financial results. 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. 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. However, because a portion of our operations consists of activities outside of the U.S., we have transactions in other currencies, primarily the Chinese renminbi, Japanese yen, Canadian dollar, British pound, South Korean won, and euro. To reduce cash flow volatility from foreign currency fluctuations, we enter into derivative instruments to hedge portions of cash flows of anticipated intercompany royalty payments, inventory purchases, intercompany borrowing, and lending activities, and certain other transactions in currencies other than the functional currency of the entity that is party to the arrangements, as well as the translation risk of certain balance sheet items and net investments in foreign operations. The volatility in the foreign exchange market may lead to significant fluctuation in foreign currency exchange rates and adversely impact our financial results in the case of weakening foreign currencies relative to the U.S. dollar.
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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. 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. Marketable equity securities are recorded at fair value and approximates a portion of our liability under our Management Deferred Compensation Plan (“MDCP”). Gains and losses from the portfolio and the change in our MDCP liability are recorded in our consolidated statements of earnings.
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.
Interest Rate Risk
Long-term Debt
We utilize short-term and long-term financing and may use interest rate hedges to manage our overall interest expense related to our existing fixed-rate debt, as well as to hedge the variability in cash flows due to changes in benchmark interest rates related to anticipated debt issuances. See Note 3 , Derivative Financial 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.
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. Refer to Note 3 , Derivative Financial Instruments, for additional information on our interest rate swap designated as a fair value hedge.
Available-for-Sale Debt Securities
Our available-for-sale securities comprise a diversified portfolio consisting mainly of investment-grade debt securities. The primary objective of these investments is to preserve capital and liquidity. Available-for-sale securities are recorded on the consolidated balance sheets at fair value with unrealized gains and losses reported as a component of accumulated other comprehensive income. We do not hedge the interest rate exposure on our investments. 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.

CRITICAL ACCOUNTING ESTIMATES
Critical accounting estimates are those that management believes are the most important to the portrayal of our financial condition and results and require the most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Judgments and uncertainties may result in materially different amounts being reported under different conditions or using different assumptions.
Our significant accounting estimates are discussed in additional detail 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. We consider financial reporting and disclosure practices and accounting policies quarterly to ensure that they provide accurate and transparent information relative to the current economic and business environment. During the past five fiscal years, we have not made any material changes to the accounting methodologies used to assess the areas discussed below, unless noted otherwise. We believe that our significant accounting estimates involve a higher degree of judgment and/or complexity for the reasons discussed below.
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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. Deferred tax assets and liabilities are measured using current enacted tax rates expected to apply to taxable income in the years in which we expect the temporary differences to reverse. We routinely evaluate the likelihood of realizing the benefit of our deferred tax assets and may record a valuation allowance if, based on all available evidence, we determine that some portion of the tax benefit will not be realized.
In evaluating our ability to recover our deferred tax assets within the jurisdiction from which they arise, we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies, and results of operations. In projecting future taxable income, we consider historical results and incorporate assumptions about the amount of future state, federal, and foreign pre-tax operating income adjusted for items that do not have tax consequences. Our assumptions regarding future taxable income are consistent with the plans and estimates we use to manage our underlying businesses. In evaluating the objective evidence that historical results provide, we consider three years of cumulative operating income/(loss).
In addition, our income tax returns are periodically audited by domestic and foreign tax authorities. These audits include review of our tax filing positions, such as the timing and amount of deductions taken and the allocation of income between tax jurisdictions. We evaluate our exposures associated with our various tax filing positions and recognize a tax benefit only if it is more likely than not that the tax position will be sustained upon examination by the relevant taxing authorities, including resolutions of any related appeals or litigation processes, based on the technical merits of our position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. For uncertain tax positions that do not meet this threshold, we record a related liability. We adjust our unrecognized tax benefit liability and income tax expense in the period in which the uncertain tax position is effectively settled, the statute of limitations expires for the relevant taxing authority to examine the tax position, or when new information becomes available. As discussed in Note 14 , Income Taxes, to the consolidated financial statements included in Item 8 of Part II of this 10-K, there is a reasonable possibility that our unrecognized tax benefit liability will be adjusted within 12 months due to the expiration of a statute of limitations and/or resolution of examinations with taxing authorities.
We have generated income in certain foreign jurisdictions that may be subject to additional foreign withholding taxes and U.S. state income taxes. We regularly review our plans for reinvestment or repatriation of unremitted foreign earnings. 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. 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. Deferred tax asset valuation allowances and our liabilities for unrecognized tax benefits require significant management judgment regarding applicable statutes and their related interpretation, the status of various income tax audits, and our particular facts and circumstances. Although we believe that the judgments and estimates discussed herein are reasonable, actual results, including forecasted business performance, could differ, and we may be exposed to losses or gains that could be material. 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.
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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. When evaluating for impairment, we first compare the carrying value of the asset to the asset’s estimated future undiscounted cash flows. If the estimated undiscounted future cash flows are less than the carrying value of the asset, we determine if we have an impairment loss by comparing the carrying value of the asset to the asset’s estimated fair value and recognize an impairment charge when the asset’s carrying value exceeds its estimated fair value. The adjusted carrying amount of the asset becomes its new cost basis and is depreciated over the asset’s remaining useful life.
Long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. For company-operated store assets, the impairment test is performed at the individual store asset group level, which is inclusive of property, plant and equipment and lease ROU assets. The fair value of a store’s assets is estimated using a discounted cash flow model. For other long-lived assets, fair value is determined using an approach that is appropriate based on the relevant facts and circumstances, which may include discounted cash flows, comparable transactions, or comparable company analyses.
Our impairment calculations contain uncertainties because they require management to make assumptions and to apply judgment to estimate future cash flows and asset fair values. Key assumptions used in estimating future cash flows and asset fair values include projected revenue growth and operating expenses, as well as forecasting asset useful lives and selecting an appropriate discount rate. For company-operated stores, estimates of revenue growth and operating expenses are based on internal projections and consider the store’s historical performance, the local market economics, and the business environment impacting the store’s performance. The discount rate is selected based on what we believe a buyer would assume when determining a purchase price for the store. The fair value of a store’s ROU asset is estimated considering what a market participant would pay to lease the asset for its highest and best use. 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 the fourth quarter of fiscal 2025 , as part of the “Back to Starbucks” strategy, the Company assessed its 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, coffeehouses that did not meet these criteria.
As a result, we recorded $892 million in restructuring and impairments in our consolidated statements of earnings during the fiscal year ended September 28, 2025. This total included $352.8 million related to impairment and disposition of company-operated store assets and $239.3 million primarily associated with accelerated amortization of ROU lease assets and other lease exit costs due to store closures prior to the end of contractual lease terms. Refer to Note 18 , Restructuring, included in Item 8 of Part II of this 10-K, for further discussion.
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.
Goodwill and Indefinite-Lived Intangible Assets
We evaluate goodwill and indefinite-lived intangible assets for impairment annually during our third fiscal quarter, or more frequently if an event occurs or circumstances change that would indicate impairment may exist. When evaluating these assets for impairment, we may first perform a qualitative assessment to determine whether it is more likely than not that a reporting unit is impaired. If we do not perform a qualitative assessment, or if we determine that it is not more likely than not that the fair value of the reporting unit exceeds its carrying amount, we calculate the estimated fair value of the reporting unit using discounted cash flows or a combination of discounted cash flow and market approaches.
When assessing goodwill for impairment, our decision to perform a qualitative impairment assessment for an individual reporting unit is influenced by a number of factors, inclusive of the carrying value of the reporting unit’s goodwill, the significance of the excess of the reporting unit’s estimated fair value over carrying value at the last quantitative assessment date, and the amount of time in between quantitative fair value assessments and the date of acquisition. If we perform a quantitative assessment of an individual reporting unit’s goodwill, our impairment calculations contain uncertainties because they require management to make assumptions and to apply judgment when estimating future cash flows and asset fair values, including projected revenue growth and operating expenses related to existing businesses, product innovation, and new store concepts, as well as utilizing valuation multiples of similar publicly traded companies and selecting an appropriate discount rate. Estimates of revenue growth and operating expenses are based on internal projections considering the reporting unit’s past performance and forecasted growth, strategic initiatives, local market economics, and the local business environment impacting the reporting unit’s performance. The discount rate is selected based on the estimated cost of capital for a market participant to operate the reporting unit in the region. 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
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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 goodwill impairment in the next 12 months. We note that the goodwill impairment assessment of the China reporting unit was deemed a critical audit matter because of the significant estimates and assumptions made to determine the fair value. Considerations and procedures performed to address the critical audit matter are discussed in Item 9A, Controls and Procedures.
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.
When assessing indefinite-lived intangible assets for impairment, where we perform a qualitative assessment, we evaluate if changes in events or circumstances have occurred that indicate that impairment may exist. If we do not perform a qualitative impairment assessment or if changes in events and circumstances indicate that a quantitative assessment should be performed, management is required to calculate the fair value of the intangible asset group. The fair value calculation includes estimates of revenue growth, which are based on past performance and internal projections for the intangible asset group’s forecasted growth and royalty rates, which are adjusted for our particular facts and circumstances. The discount rate is selected based on the estimated cost of capital that reflects the risk profile of the related business. These estimates are highly subjective, and our ability to achieve the forecasted 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. We do not anticipate recording significant impairment charges in the next 12 months.
Definite-lived intangible asset impairment charges are discussed in Note 8 , Other Intangible Assets and Goodwill, to the consolidated financial statements included in Item 8 of Part II of this 10-K.

RECENT ACCOUNTING PRONOUNCEMENTS
See 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 for a detailed description of recent accounting pronouncements.

Item 7A. Quantitative 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.
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Item 8. Financial Statements and Supplementary Data

STARBUCKS CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(in millions, except per share data)
 
Fiscal Year Ended Sep 28,
2025 Sep 29,
2024 Oct 1,
2023
Net revenues:
Company-operated stores $ 30,744.8   $ 29,765.9   $ 29,462.3  
Licensed stores 4,350.4   4,505.1   4,512.7  
Other 2,089.2   1,905.2   2,000.6  
Total net revenues 37,184.4   36,176.2   35,975.6  
Product and distribution costs 11,658.2   11,180.6   11,409.1  
Store operating expenses 17,058.9   15,286.5   14,720.3  
Other operating expenses 584.6   565.6   539.4  
Depreciation and amortization expenses 1,684.7   1,512.6   1,362.6  
General and administrative expenses 2,617.2   2,523.3   2,441.3  
Restructuring and impairments 892.0   —   21.8  
Total operating expenses 34,495.6   31,068.6   30,494.5  
Income from equity investees 247.8   301.2   298.4  
Gain from sale of assets —   —   91.3  
Operating income 2,936.6   5,408.8   5,870.8  

Interest income and other, net 113.3   122.8   81.2  
Interest expense ( 542.6 ) ( 562.0 ) ( 550.1 )
Earnings before income taxes 2,507.3   4,969.6   5,401.9  
Income tax expense 650.6   1,207.3   1,277.2  
Net earnings including noncontrolling interests 1,856.7   3,762.3   4,124.7  
Net earnings attributable to noncontrolling interests 0.3   1.4   0.2  
Net earnings attributable to Starbucks $ 1,856.4   $ 3,760.9   $ 4,124.5  
Earnings per share — basic $ 1.63   $ 3.32   $ 3.60  
Earnings per share — diluted $ 1.63   $ 3.31   $ 3.58  
Weighted average shares outstanding:
Basic 1,136.0   1,133.8   1,146.8  
Diluted 1,139.8   1,137.3   1,151.3  

See Notes to Consolidated Financial Statements.

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STARBUCKS CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)

Fiscal Year Ended Sep 28,
2025 Sep 29,
2024 Oct 1,
2023
Net earnings including noncontrolling interests $ 1,856.7   $ 3,762.3   $ 4,124.7  
Other comprehensive income/(loss):

Unrealized holding gains/(losses) on available-for-sale debt securities 2.7   12.1   3.3  
Tax (expense)/benefit ( 0.8 ) ( 3.0 ) ( 0.8 )
Unrealized gains/(losses) on cash flow hedging instruments 80.1   106.0   ( 149.4 )
Tax (expense)/benefit ( 17.9 ) ( 16.2 ) 17.2  
Unrealized gains/(losses) on net investment hedging instruments 255.9   55.7   73.2  
Tax (expense)/benefit ( 64.6 ) ( 14.1 ) ( 18.5 )
Translation adjustment and other ( 113.4 ) 225.9   ( 109.0 )
Tax (expense)/benefit —   ( 8.8 ) 1.8  
Reclassification adjustment for net (gains)/losses realized in net earnings for available-for-sale securities, hedging instruments, translation adjustment, and other
( 224.9 ) ( 19.2 ) ( 158.9 )
Tax expense/(benefit) 52.4   11.0   26.1  
Other comprehensive income/(loss), net of tax
( 30.5 ) 349.4   ( 315.0 )
Comprehensive income including noncontrolling interests 1,826.2   4,111.7   3,809.7  
Comprehensive income/(loss) attributable to noncontrolling interests 0.1   1.8   ( 0.5 )
Comprehensive income attributable to Starbucks $ 1,826.1   $ 4,109.9   $ 3,810.2  

See Notes to Consolidated Financial Statements.

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STARBUCKS CORPORATION
CONSOLIDATED BALANCE SHEETS
(in millions, except per share data)
 
Sep 28,
2025 Sep 29,
2024
ASSETS
Current assets:
Cash and cash equivalents $ 3,219.8   $ 3,286.2  
Short-term investments 247.2   257.0  
Accounts receivable, net 1,277.5   1,213.8  
Inventories 2,185.6   1,777.3  
Prepaid expenses and other current assets 452.2   313.1  
Total current assets 7,382.3   6,847.4  
Long-term investments 246.9   276.0  
Equity investments 466.2   463.9  
Property, plant and equipment, net 8,493.5   8,665.5  
Operating lease, right-of-use asset 9,315.7   9,286.2  
Deferred income taxes, net 1,826.9   1,766.7  
Other long-term assets 752.5   617.0  
Other intangible assets 166.8   100.9  
Goodwill 3,368.9   3,315.7  
TOTAL ASSETS $ 32,019.7   $ 31,339.3  
LIABILITIES AND SHAREHOLDERS’ EQUITY/(DEFICIT)

Current liabilities:
Accounts payable $ 1,852.8   $ 1,595.5  
Accrued liabilities 2,359.7   2,194.7  
Accrued payroll and benefits 1,093.9   786.6  

Current portion of operating lease liability 1,564.5   1,463.1  
Stored value card liability and current portion of deferred revenue 1,840.6   1,781.2  

Current portion of long-term debt 1,498.9   1,248.9  
Total current liabilities 10,210.4   9,070.0  
Long-term debt 14,575.9   14,319.5  
Operating lease liability 8,972.2   8,771.6  
Deferred revenue 5,772.6   5,963.6  
Other long-term liabilities 577.8   656.2  
Total liabilities 40,108.9   38,780.9  
Shareholders’ deficit:
Common stock ($ 0.001 par value) — authorized, 2,400.0  shares; issued and outstanding, 1,136.9 and 1,133.5 shares, respectively
1.1   1.1  
Additional paid-in capital 634.1   322.6  
Retained deficit ( 8,272.5 ) ( 7,343.8 )
Accumulated other comprehensive income/(loss) ( 459.3 ) ( 428.8 )
Total shareholders’ deficit ( 8,096.6 ) ( 7,448.9 )
Noncontrolling interests 7.4   7.3  
Total deficit ( 8,089.2 ) ( 7,441.6 )
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY/(DEFICIT)
$ 32,019.7   $ 31,339.3  

See Notes to Consolidated Financial Statements.
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STARBUCKS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)

Fiscal Year Ended Sep 28,
2025 Sep 29,
2024 Oct 1,
2023
OPERATING ACTIVITIES:
Net earnings including noncontrolling interests $ 1,856.7   $ 3,762.3   $ 4,124.7  
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization 1,771.5   1,592.4   1,450.3  
Deferred income taxes, net ( 90.6 ) ( 13.8 ) ( 59.4 )
Income earned from equity method investees, net ( 274.2 ) ( 306.4 ) ( 301.8 )
Distributions received from equity method investees 294.4   333.3   222.8  
Gain on sale of assets —   —   ( 91.3 )

Stock-based compensation 318.3   308.3   302.7  
Non-cash lease costs 1,513.8   1,314.9   1,365.9  
Loss on disposal, impairment, and accelerated amortization of assets 834.7   121.5   101.4  
Other 17.3   31.9   26.8  
Cash provided by/(used in) changes in operating assets and liabilities:
Accounts receivable ( 89.7 ) 18.4   ( 4.1 )
Inventories ( 408.4 ) 42.8   366.4  
Income taxes payable 103.8   ( 61.9 ) 52.5  
Accounts payable 261.0   28.0   100.1  
Deferred revenue ( 120.7 ) ( 72.2 ) ( 110.8 )
Operating lease liability ( 1,576.7 ) ( 1,294.9 ) ( 1,443.8 )
Other operating assets and liabilities 336.3   291.0   ( 93.7 )
Net cash provided by operating activities 4,747.5   6,095.6   6,008.7  
INVESTING ACTIVITIES:
Purchases of investments ( 333.6 ) ( 627.5 ) ( 610.5 )
Sales of investments 1.1   10.3   2.5  
Maturities and calls of investments 391.8   768.2   616.9  
Additions to property, plant and equipment ( 2,305.5 ) ( 2,777.5 ) ( 2,333.6 )
Acquisitions, net of cash acquired ( 177.1 ) —   —  
Proceeds from sale of assets —   —   110.0  

Other ( 62.1 ) ( 72.7 ) ( 56.1 )
Net cash used in investing activities ( 2,485.4 ) ( 2,699.2 ) ( 2,270.8 )
FINANCING ACTIVITIES:
Net (payments)/proceeds from issuance of commercial paper —   —   ( 175.0 )
Net proceeds from issuance of short-term debt 2.4   123.8   114.6  
Repayments of short-term debt ( 7.8 ) ( 157.5 ) ( 78.8 )
Net proceeds from issuance of long-term debt 1,748.5   1,995.3   1,497.8  
Repayments of long-term debt ( 1,250.0 ) ( 1,825.1 ) ( 1,000.0 )
Proceeds from issuance of common stock 77.0   108.0   167.4  
Cash dividends paid ( 2,771.4 ) ( 2,585.0 ) ( 2,431.8 )
Repurchase of common stock —   ( 1,266.7 ) ( 984.4 )
Minimum tax withholdings on share-based awards ( 87.4 ) ( 100.4 ) ( 89.3 )
Other ( 9.3 ) ( 10.6 ) ( 11.1 )
Net cash used in financing activities ( 2,298.0 ) ( 3,718.2 ) ( 2,990.6 )
Effect of exchange rate changes on cash and cash equivalents ( 30.5 ) 56.5   ( 14.2 )
Net increase/(decrease) in cash and cash equivalents ( 66.4 ) ( 265.3 ) 733.1  
CASH AND CASH EQUIVALENTS:
Beginning of period 3,286.2   3,551.5   2,818.4  
End of period $ 3,219.8   $ 3,286.2   $ 3,551.5  
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest, net of capitalized interest $ 588.3   $ 570.7   $ 524.3  
Income taxes $ 715.6   $ 1,373.3   $ 1,294.2  

See Notes to Consolidated Financial Statements.
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STARBUCKS CORPORATION
CONSOLIDATED STATEMENTS OF EQUITY
(in millions, except per share data)
  Common Stock Additional Paid-in Capital Retained
Earnings/(Deficit) Accumulated
Other
Comprehensive
Income/(Loss) Shareholders’
Equity/(Deficit) Noncontrolling
Interests Total
  Shares Amount
Balance, October 2, 2022 1,147.9   $ 1.1   $ 205.3   $ ( 8,449.8 ) $ ( 463.2 ) $ ( 8,706.6 ) $ 7.9   $ ( 8,698.7 )

Net earnings —  —   —   4,124.5   —   4,124.5   0.2   4,124.7  
Other comprehensive loss —  —   —   —   ( 314.3 ) ( 314.3 ) ( 0.7 ) ( 315.0 )
Stock-based compensation expense —  —   306.4   —   —   306.4   —   306.4  
Exercise of stock options/vesting of RSUs 4.2   —   28.4   —   —   28.4   —   28.4  
Sale of common stock 0.5   —   49.6   —   —   49.6   —   49.6  
Repurchase of common stock ( 10.0 ) —   ( 548.6 ) ( 455.9 ) —   ( 1,004.5 ) —   ( 1,004.5 )
Cash dividends declared, $ 2.16 per share
—  —   —   ( 2,474.6 ) —   ( 2,474.6 ) —   ( 2,474.6 )
Noncontrolling interest resulting from divestiture —  —   ( 3.0 ) —   ( 0.7 ) ( 3.7 ) ( 0.4 ) ( 4.1 )
Balance, October 1, 2023 1,142.6   $ 1.1   $ 38.1   $ ( 7,255.8 ) $ ( 778.2 ) $ ( 7,994.8 ) $ 7.0   $ ( 7,987.8 )

Net earnings —  —   —   3,760.9   —   3,760.9   1.4   3,762.3  
Other comprehensive income —  —   —   —   349.0   349.0   0.4   349.4  
Stock-based compensation expense —  —   312.0   —   —   312.0   —   312.0  
Exercise of stock options/vesting of RSUs 3.1   —   ( 47.6 ) —   —   ( 47.6 ) —   ( 47.6 )
Sale of common stock 0.6   —   55.3   —   —   55.3   —   55.3  
Repurchase of common stock (1)
( 12.8 ) —   ( 35.2 ) ( 1,223.9 ) —   ( 1,259.1 ) —   ( 1,259.1 )
Cash dividends declared, $ 2.32 per share
—  —   —   ( 2,625.0 ) —   ( 2,625.0 ) —   ( 2,625.0 )
Purchase of noncontrolling interests and other —  —   —   —   0.4   0.4   ( 1.5 ) ( 1.1 )
Balance, September 29, 2024 1,133.5 $ 1.1   $ 322.6   $ ( 7,343.8 ) $ ( 428.8 ) $ ( 7,448.9 )

$ 7.3   $ ( 7,441.6 )

Net earnings —  —   —   1,856.4   —   1,856.4   0.3   1,856.7  
Other comprehensive loss —  —   —   —   ( 30.3 ) ( 30.3 ) ( 0.2 ) ( 30.5 )
Stock-based compensation expense —  —   321.9   —   —   321.9   —   321.9  
Exercise of stock options/vesting of RSUs 2.8   —   ( 63.0 ) —   —   ( 63.0 ) —   ( 63.0 )
Sale of common stock 0.6   —   52.6   —   —   52.6   —   52.6  
Repurchase of common stock (1)
—   —   —   —   —   —   —   —  
Cash dividends declared, $ 2.45 per share
—  —   —   ( 2,785.0 ) —   ( 2,785.0 ) —   ( 2,785.0 )

Purchase of noncontrolling interests and other —  —   —   ( 0.1 ) ( 0.2 ) ( 0.3 ) —   ( 0.3 )
Balance, September 28, 2025 1,136.9   $ 1.1   $ 634.1   $ ( 8,272.5 ) $ ( 459.3 ) $ ( 8,096.6 ) $ 7.4   $ ( 8,089.2 )

(1) Includes excise tax on share repurchases.
See Notes to Consolidated Financial Statements.
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STARBUCKS CORPORATION
INDEX FOR NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 Summary of Significant Accounting Policies and Estimates
49

Note 2 Acquisitions and Divestitures
58

Note 3 Derivative Financial Instruments
59

Note 4 Fair Value Measurements
63

Note 5 Inventories
65

Note 6 Equity Investments
65

Note 7 Supplemental Balance Sheet and Statement of Earnings Information
67

Note 8 Other Intangible Assets and Goodwill
68

Note 9 Debt
68

Note 10 Leases
71

Note 11 Deferred Revenue
72

Note 12 Equity
72

Note 13 Employee Stock and Benefit Plans
74

Note 14 Income Taxes
75

Note 15 Earnings per Share
78

Note 16 Commitments and Contingencies
78

Note 17 Segment Reporting
78

Note 18 Restructuring
80

Note 19
Subsequent Event
82

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STARBUCKS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years ended September 28, 2025, September 29, 2024, and October 1, 2023

Note 1: Summary of Significant Accounting Policies and Estimates

Description of Business
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 our company-operated stores. 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. (“Nestlé”). In addition to our flagship Starbucks Coffee® brand, we sell goods and services under the following brands: Teavana®, Ethos®, and Starbucks Reserve®.
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.”
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.
We have three reportable operating segments: 1) North America, which is inclusive of the U.S. and Canada; 2) International, which is inclusive of China, Japan, Asia Pacific, Europe, Middle East, Africa, Latin America, and the Caribbean; and 3) Channel Development. Unallocated corporate expenses are reported within Corporate and Other.
Additional details on the nature of our business and our reportable operating segments are included in Note 17 , Segment Reporting.
Certain prior period information at Note 14 , Income Taxes, has been reclassified to conform to the current presentation.

Principles of Consolidation
Our consolidated financial statements reflect the financial position and operating results of Starbucks, including wholly-owned subsidiaries and investees that we control. Intercompany transactions and balances have been eliminated.

Fiscal Year End
Our fiscal year ends on the Sunday closest to September 30. Fiscal years 2025, 2024, and 2023 included 52 weeks.

Estimates and Assumptions
Preparing financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Examples include, but are not limited to, estimates for inventory reserves, asset and goodwill impairments, assumptions underlying self-insurance reserves, income from unredeemed stored value cards, stock-based compensation forfeiture rates, future asset retirement obligations, commitments and contingencies, and the potential outcome of future tax consequences of events that have been recognized in the financial statements. Actual results and outcomes may differ from these estimates and assumptions due to risks and uncertainties, including uncertainty in the current economic environment.

Restructuring
In the fourth quarter of fiscal 2024, we announced our “Back to Starbucks” strategy, which was implemented with the goal to bring customers back to our stores and return to growth by revitalizing coffeehouses, enhancing the customer experience, and improving efficiency. As part of this strategy, during the second quarter of fiscal 2025, we announced our plan to restructure our support organization in an effort to operate more efficiently, increase accountability, reduce complexity, and drive better integration, which resulted in a reduction in our support partner workforce.
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. 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, coffeehouses that did not meet these criteria.
Refer to Note 18 , Restructuring, included in Item 8 of Part II of this 10-K, for further discussion.
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Cash and Cash Equivalents
We consider all highly liquid instruments with maturities of three months or less at the time of purchase, as well as credit card receivables and third-party payment processing receivables for sales to customers in our company-operated stores that generally settle within two to five business days, to be cash equivalents. We maintain cash and cash equivalent balances with financial institutions that exceed federally-insured limits. We have not experienced any losses related to these balances, and we believe credit risk to be minimal.
Our cash management system provides for the funding of all major bank disbursement accounts on a daily basis as checks are presented for payment. Under this system, outstanding checks are in excess of the cash balances at certain banks, which creates book overdrafts. Book overdrafts are presented as a current liability in accrued liabilities on our consolidated balance sheets.

Investments
Available-for-sale Debt Securities
Our short-term and long-term investments include investment-grade debt securities, all of which are classified as available-for-sale. Available-for-sale debt securities are recorded at fair value, and unrealized holding gains and losses are recorded, net of tax, as a component of accumulated other comprehensive income. Available-for-sale securities with remaining maturities of less than one year and those identified by management at the time of purchase to be used to fund operations within one year are classified as short-term. All other available-for-sale securities are classified as long-term. We evaluate our available-for-sale securities for other-than-temporary impairment on a quarterly basis. Unrealized losses are charged against net earnings when a decline in fair value is determined to be other than temporary. We review several factors to determine whether a loss is other than temporary, such as the length and extent of the fair value decline, the financial condition and near-term prospects of the issuer, and whether we have the intent to sell, or will more likely than not be required to sell, before the securities’ anticipated recovery, which may be at maturity. Realized gains and losses are accounted for using the specific identification method. Purchases and sales are recorded on a trade date basis.
Structured Deposits
We hold short-term, principal-protected structured deposits that provide returns in the form of both fixed and variable yields; such variable yields are indexed to foreign exchange rates, equity-linked instruments, or interest rate indices. The Company has elected to account for these using the fair value option with gains and losses recorded in our consolidated statements of earnings. For fiscal 2025, 2024, and 2023, resulting gains and losses were immaterial to our consolidated statements of earnings.
Marketable Equity Securities
We also have a marketable equity securities portfolio, which is comprised of marketable equity mutual funds and equity exchange-traded funds. Marketable equity securities are recorded at fair value and approximate a portion of our liability under our Management Deferred Compensation Plan (“MDCP”). Gains or losses from the portfolio and the change in our MDCP liability are recorded in general and administrative expenses in our consolidated statements of earnings. Refer to Note 4 , Fair Value Measurements, for further discussion of our MDCP liability.
Equity Investments
Equity investments are accounted for under the equity method if we are able to exercise significant influence, but not control, over an investee. Our share of the earnings or losses as reported by the investees is classified as income from equity investees on our consolidated statements of earnings. The investments are evaluated for impairment annually and when facts and circumstances indicate that the carrying value may not be recoverable. If a decline in fair value is determined to be other than temporary, an impairment charge is recorded in interest income and other, net on our consolidated statements of earnings.
We account for equity investments for which we do not have significant influence and without readily determinable fair values at cost with adjustments for observable changes in price or impairments as permitted by the measurement alternative. Investments for which the measurement alternative has been elected are assessed for impairment quarterly, or if a triggering event indicates impairment may be present. Any adjustments as a result of price changes or impairments are recorded in interest income and other, net on our consolidated statements of earnings.

Fair Value
Fair value is the price we would receive to sell an asset or pay to transfer a liability (exit price) in an orderly transaction between market participants. For assets and liabilities recorded or disclosed at fair value on a recurring basis, we determine fair value based on the following:
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Level 1: The carrying value of cash and cash equivalents approximates fair value because of the short-term nature of these instruments. For equity and U.S. government treasury securities and commodity futures contracts, we use quoted prices in active markets for identical assets to determine fair value.
Level 2: When quoted prices in active markets for identical assets are not available, we determine the fair value of certain assets based upon factors such as the quoted market price of similar assets or a discounted cash flow model using readily observable market data, which may include interest rate curves and forward and spot prices for currencies and commodities, depending on the nature of the investment. The fair value of our long-term debt is estimated based on the quoted market prices for the same or similar issues or on the current rates offered to us for debt of the same remaining maturities.
Level 3: We determine the fair value of private equity instruments using valuation models, including Black Scholes’ option pricing model and discounted cash flow models. Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability.
Assets and liabilities recognized or disclosed at fair value on a nonrecurring basis may include items such as property, plant and equipment, ROU assets, goodwill and other intangible assets, equity and other investments, and other assets. We determine the fair value of these items using Level 3 inputs, as described in the related sections below.

Derivative Instruments
We manage our exposure to various risks within our consolidated financial statements according to a market price risk management policy. Under this policy, we may engage in transactions involving various derivative instruments to hedge interest rates, commodity prices, foreign currency-denominated revenue streams, inventory purchases, and assets, liabilities, and investments in certain foreign operations. In order to manage our exposure to these risks, we use various types of derivative instruments including forward contracts, commodity futures contracts, collars, and swaps. Forward contracts and commodity futures contracts are agreements to buy or sell a quantity of a currency or commodity at a predetermined future date and at a predetermined rate or price. A collar is a strategy that uses a combination of a purchased call option and a sold put option with equal premiums to hedge a portion of anticipated cash flows, or to limit possible gains or losses on an underlying asset or liability to a specific range. A swap agreement is a contract between two parties to exchange cash flows based on specified underlying notional amounts, assets, and/or indices. We do not enter into derivative instruments for speculative purposes.
We record all derivatives on our consolidated balance sheets at fair value and typically do not offset derivative assets and liabilities. Cash flows from derivative financial instruments and the related gains and losses are classified as cash flows from operating activities on the consolidated statements of cash flows. Excluding interest rate hedging instruments and cross-currency swaps, we generally do not enter into derivative instruments with maturities longer than three years. We are allowed to net settle transactions with respective counterparties for certain derivative contracts, inclusive of interest rate swaps and foreign currency forwards, with a single, net amount payable by one party to the other. As of September 28, 2025, and September 29, 2024, cash collateral pledged as part of our commodity derivative margin requirements was $ 37.9 million and $ 12.4 million, respectively, and is included in prepaid expenses and other current assets on our consolidated balance sheets. The potential effects of netting arrangements with our derivative contracts, excluding the effects of collateral, would not have had a material impact on our consolidated balance sheets. We also hold cash and cash equivalents from various settled-to-market exchange traded futures related to coffee and dairy hedging.
By using these derivative instruments, we expose ourselves to potential credit risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. We minimize this credit risk by entering into transactions with carefully selected, credit-worthy counterparties and distribute contracts among several financial institutions to reduce the concentration of credit risk. We also enter into collateral security arrangements that provide for collateral to be received or posted when the net fair value of certain financial instruments fluctuates from contractually established thresholds. As of September 28, 2025, and September 29, 2024, cash collateral received under collateral security arrangements was $ 187.0 million and $ 230.9 million, respectively, and is included in other long-term liabilities on our consolidated balance sheets.
Cash Flow Hedges
For derivative instruments that are designated and qualify as a cash flow hedge, the derivative’s gain or loss is reported as a component of other comprehensive income (“OCI”) and recorded in accumulated other comprehensive income (“AOCI”) on our consolidated balance sheets. The gain or loss is subsequently reclassified into net earnings when the hedged exposure affects net earnings, in the same line item as the underlying hedged item on our consolidated statements of earnings.
Cash flow hedges related to anticipated transactions are designated and documented at the inception of each hedge. Cash flows from hedging transactions are classified in the same categories as the cash flows from the respective hedged items. For de-designated cash flow hedges where it is probable that the hedged transaction will not occur during the originally specified time period or within an additional two-month period thereafter, the related accumulated derivative gains or losses are recognized in interest income and other, net on our consolidated statements of earnings.
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Net Investment Hedges
For derivative instruments that are designated and qualify as a net investment hedge, the derivative’s, or qualifying non-derivative instrument’s, gain or loss is reported as a component of OCI and recorded in AOCI. The gain or loss will be subsequently reclassified into net earnings when the hedged net investment is either sold or substantially liquidated.
Fair Value Hedges
For derivative instruments that are designated and qualify as a fair value hedge, the changes in fair value of the derivative instrument and the offsetting changes in fair value of the underlying hedged item due to changes in the hedged risk are recorded in interest income and other, net or interest expense on our consolidated statements of earnings.
Derivatives Not Designated As Hedging Instruments
We also enter into certain foreign currency forward contracts, commodity futures contracts, collars, and swaps that are not designated as hedging instruments for accounting purposes. The changes in the fair values of these contracts are immediately recognized in interest income and other, net on our consolidated statements of earnings.
Normal Purchase Normal Sale
We enter into fixed-price and price-to-be-fixed green coffee purchase commitments, which we expect will result in physical delivery and utilization in the ordinary course of business in a reasonable period of time. Since these types of purchase commitments qualify for the normal purchase normal sale exemption, they are not recorded as derivative instruments on our consolidated balance sheets.
Refer to Note 3 , Derivative Financial Instruments, and Note 5 , Inventories, for further discussion of our derivative instruments and green coffee purchase commitments.

Receivables, net of Allowance for Credit Losses
Our receivables are mainly generated from product and equipment sales to, and royalties from, our licensees, as well as from our Global Coffee Alliance and other Channel Development customers. The primary indicators of the credit quality of our receivables are aging, payment history, economic sector information, and outside credit monitoring. These indicators are assessed on a quarterly basis. Our credit loss exposure is mainly concentrated in our accounts receivable portfolio. Our allowance for credit losses is calculated using a loss-rate method based on historical experience, current market conditions, and reasonable forecasts. For the fiscal year ended September 28, 2025 , we did not observe a significant deterioration of our receivable portfolio that required a significant increase in our allowance for credit losses. As of September 28, 2025, and September 29, 2024, our allowance for credit losses was $ 24.0 million a nd $ 21.2 million, respectively.

Inventories
Inventories are stated at the lower of cost (primarily moving average cost) or net realizable value. We record inventory reserves for obsolete and slow-moving inventory and for estimated shrinkage between physical inventory counts. Inventory reserves are based on inventory obsolescence trends, historical experience, and application of the specific identification method. As of September 28, 2025, and September 29, 2024, inventory reserves were $ 56.6 million and $ 58.0 million, respectively.

Property, Plant and Equipment
Property, plant and equipment is carried at cost less accumulated depreciation. Cost includes all direct costs necessary to acquire and prepare assets for use or to develop or obtain internal-use software, including internal labor and overhead in some cases. Depreciation is computed using the straight-line method over estimated useful lives of the assets, generally ranging from 2 to 15 years for equipment, 30 to 40 years for buildings, and 2 to 8 years for capitalized software. Leasehold improvements are amortized over the shorter of their estimated useful lives or the related lease life, generally 10 years. For leases with renewal periods at our option, we generally use the original lease term, excluding renewal option periods, to determine estimated useful lives. If failure to exercise a renewal option imposes a significant economic penalty to us, we may determine at the inception of the lease that renewal is reasonably assured and include the renewal option period in the determination of the appropriate estimated useful lives. Capitalized software includes the costs of developing or obtaining internal-use software, such as external direct costs of materials and services, payroll and benefits costs, interest costs, and costs to develop or obtain software that allows for access or conversion of historical data by new systems. We capitalize costs when the preliminary project stage is complete, management has authorized and committed to funding the software project, it is probable that the software project will be completed, and it is probable that the software will be used to perform the intended function.
The portion of depreciation expense related to production and distribution facilities is included in product and distribution costs on our consolidated statements of earnings. The costs of repairs and maintenance are expensed when incurred, while expenditures for refurbishments and improvements that significantly add to the productive capacity or extend the useful life of an asset are capitalized. When assets are disposed of, whether through retirement or sale, the net gain or loss is recognized in
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net earnings. Long-lived assets to be disposed of are reported at the lower of their carrying amount or fair value less estimated costs to sell.
We evaluate property, plant and equipment for impairment when facts and circumstances indicate that the carrying values of such assets may not be recoverable. When evaluating for impairment, we first compare the carrying value of the asset to the asset’s estimated future undiscounted cash flows. If the estimated undiscounted future cash flows are less than the carrying value of the asset, we determine if we have an impairment loss by comparing the carrying value of the asset to the asset’s estimated fair value and recognize an impairment charge when the asset’s carrying value exceeds its estimated fair value. The fair value of the asset is estimated using a discounted cash flow model based on forecasted future revenues and operating costs, using internal projections. Property, plant and equipment assets and ROU assets related to the store lease are grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. For company-operated store assets, the impairment test is performed at the individual store asset group level.
We recognized net disposition and impairment charge s of $ 595.3 million, $ 94.0 million, and $ 91.1 million in fiscal 2025, 2024, and 2023, respectively. Included in these amounts, we recorded $ 102.2 million, $ 23.3 million, and $ 23.2 million of impairment losses within store operating expenses on our consolidated statements of earnings during the fiscal years ended September 28, 2025, September 29, 2024, and October 1, 2023, respectively. Further, of the total net impairment and disposition charges recorded in fiscal 2025, $ 352.8 million was restructuring related and recorded in restructuring and impairment expenses. See Note 18 , Restructuring, to the consolidated financial statements included i n Item 8 of Part II of this 10-K, for further discussion. Unless it is restructuring related, the nature of the underlying asset that is impaired or disposed of will determine the operating expense line on which the related impact is recorded on our consolidated statements of earnings.

Leases
The majority of our leases are operating leases for our company-operated retail store locations. We also lease, among other things, roasting, distribution and warehouse facilities, and office space for corporate administrative purposes.
We categorize leases as either operating or finance leases at the commencement date of the lease. Operating lease agreements may contain tenant improvement allowances, rent holidays, rent escalation clauses, and/or contingent rent provisions. We have lease agreements with lease and non-lease components, which are accounted for together as a single lease component for all underlying classes of assets.
We recognize a ROU asset and lease liability for each operating and finance lease with a contractual term greater than 12 months at the time of lease inception. We do not record leases with an initial term of 12 months or less on our consolidated balance sheet but continue to record rent expense on a straight-line basis over the lease term. We review contracts for identified assets where we have the right to direct the use of the asset and record those agreements as embedded leases on our consolidated balance sheet. Our leases often include options to extend or terminate at our sole discretion, which are included in the determination of lease term when they are reasonably certain to be exercised.
Our lease liability represents the present value of future lease payments over the lease term. Given our policy election to combine lease and non-lease components, we also consider fixed common area maintenance (“CAM”) part of our fixed future lease payments; therefore, fixed CAM is also included in our lease liability.
We generally cannot determine the interest rate implicit in each of our leases. Therefore, we typically use market and term-specific incremental borrowing rates. Our incremental borrowing rate for a lease is the rate of interest we expect to pay on a collateralized basis to borrow an amount under similar terms. Because we do not borrow on a collateralized basis, we consider a combination of factors, including our credit-adjusted risk-free interest rate, the risk profile and funding cost of the specific geographic market of the lease, the lease term, and the effect of adjusting the rate to reflect consideration of collateral. Our credit-adjusted risk-free rate takes into consideration interest rates we pay on our unsecured long-term bonds as well as quoted interest rates obtained from financial institutions.
Total lease costs recorded as rent and other occupancy costs include fixed operating lease costs, variable lease costs, and short-term lease costs. Most of our real estate leases require we pay certain expenses, such as CAM costs, real estate taxes, and other executory costs, of which the fixed portion is included in operating lease costs. We recognize operating lease costs on a straight-line basis over the lease term. In addition to the above costs, variable lease costs also include amounts based on a percentage of gross sales in excess of specified levels, the costs of which are recognized when probable and are not included in determining the present value of our lease liability. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. A significant majority of our leases are related to our company-operated stores, and the related costs are recorded within store operating expenses.
The ROU asset is measured at the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, initial direct costs, and any tenant improvement allowances received. For operating leases, ROU assets are reduced over the lease term by the recognized straight-line lease expense less the amount of accretion of the lease liability determined using the effective interest method. For finance leases, ROU assets are amortized on a straight-line basis over the
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shorter of the useful life of the leased asset or the lease term. Interest expense on each finance lease liability is recognized utilizing the effective interest method. ROU assets are tested for impairment in the same manner as long-lived assets.
Additionally, we monitor for events or changes in circumstances that may require a reassessment of one of our leases and determine if a remeasurement is required. See Note 10 , Leases, for additional details. For the year ended September 28, 2025, we recognized accelerated amortization of ROU lease assets and other lease exit costs of $ 239.3 million, d ue to store closures prior to the end of contractual lease terms, which was recorded in restructuring and impairments on the consolidated statement of earnings. See Note 18 , Restructuring, to the consolidated financial statements included i n Item 8 of Part II of this 10-K, for further discussion.

Goodwill
We evaluate goodwill for impairment annually during our third fiscal quarter, or more frequently if an event occurs or circumstances change, such as material deterioration in performance or a significant number of store closures, indicating that the carrying value of our goodwill may not be recoverable. When evaluating goodwill for impairment, we may first perform a qualitative assessment to determine whether it is more likely than not that a reporting unit is impaired. If we do not perform a qualitative assessment, or if we determine that it is not more likely than not that the fair value of the reporting unit exceeds its carrying amount, we calculate the estimated fair value of the reporting unit. Fair value is typically calculated using a discounted cash flow model. For certain reporting units, where deemed appropriate, we may also utilize a market approach for estimating fair value. If the carrying amount of the reporting unit exceeds the estimated fair value, an impairment charge is recorded to reduce the carrying value to the estimated fair value.
As part of our ongoing operations, we may close certain stores within a reporting unit containing goodwill due to underperformance of the store or inability to renew our lease, among other reasons. We may abandon certain assets associated with a closed store, including leasehold improvements and other non-transferable assets. When a portion of a reporting unit that constitutes a business is to be disposed of, goodwill associated with the business is included in the carrying amount of the business in determining any loss on disposal. Our evaluation of whether the portion of a reporting unit being disposed of constitutes a business occurs on the date of abandonment. Although an operating store meets the accounting definition of a business prior to abandonment, it does not constitute a business on the closure date because the remaining assets on that date do not constitute an integrated set of activities (substantive processes) and assets that are capable of being managed for the purpose of providing a return to investors. As a result, when closing individual stores, we do not include goodwill in the calculation of any loss on disposal of the related assets.
We recorded no goodwill impairment during fiscal 2025, fiscal 2024, and fiscal 2023. See Note 8 , Other Intangible Assets and Goodwill, for further information.

Other Intangible Assets
Other intangible assets include finite-lived intangible assets, which mainly consist of acquired and reacquired rights, trade names, trade secrets, licensing agreements, contract-based patents, and copyrights. These assets are amortized over their estimated useful lives and are tested for impairment using a similar methodology to our property, plant and equipment, as described above.
Indefinite-lived intangibles, which consist primarily of trade names and trademarks, are tested for impairment annually during the third fiscal quarter, or more frequently if an event occurs or circumstances change, indicating that the carrying value of the intangibles may not be recoverable. When evaluating other intangible assets for impairment, we may first perform a qualitative assessment to determine whether it is more likely than not that an intangible asset group is impaired. If we do not perform the qualitative assessment, or if we determine that it is not more likely than not that the fair value of the intangible asset group exceeds its carrying amount, we calculate the estimated fair value of the intangible asset group. Fair value is the price a willing buyer would pay for the intangible asset group and is typically calculated using an income approach, such as a relief-from-royalty model. If the carrying amount of the intangible asset group exceeds the estimated fair value, an impairment charge is recorded to reduce the carrying value to the estimated fair value. In addition, we continuously monitor and may revise our intangible asset useful lives if and when facts and circumstances change.
There were no significant other intangible asset impairment charges recorded during fiscal years 2025, 2024, and 2023. See Note 8 , Other Intangible Assets and Goodwill, for further information.

Insurance Reserves
We use a combination of insurance and self-insurance mechanisms, including a wholly-owned captive insurance entity and participation in a reinsurance treaty, to provide for the potential liabilities for certain risks, including workers’ compensation, healthcare benefits, general liability, and property insurance. Liabilities associated with the risks that are retained by us are not discounted and are estimated, in part, by considering historical claims experience, demographics, exposure and severity factors, and other actuarial assumptions.
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Revenue Recognition
Consolidated revenues are presented net of intercompany eliminations for wholly-owned subsidiaries and investees controlled by us and for product sales to, and royalty and other fees from, licensees accounted for under the equity method. Additionally, consolidated revenues are recognized net of any discounts, returns, allowances, and sales incentives, including coupon redemptions and rebates.
Company-operated Store Revenues
Company-operated store revenues are recognized when payment is tendered at the point-of-sale as the performance obligation has been satisfied. For products sold via delivery platforms, contractual terms are evaluated for each service provider to determine gross versus net presentation, and revenues are also recognized when control of products are transferred to the customers. Delivery service fees were immaterial in the periods presented. Company-operated store revenues are reported excluding sales, use, or other transaction taxes that are collected from customers and remitted to taxing authorities.
Licensed Store Revenues
Licensed store revenues consist of product and equipment sales, royalties, and other fees paid by licensees using the Starbucks brand. Sales of coffee, tea, food, and related products are generally recognized upon shipment to licensees, depending on contract terms. Shipping charges billed to licensees are also recognized as revenue, and the related shipping costs are included in product and distribution costs on our consolidated statements of earnings.
We consider pre-opening services, including site evaluation and selection, store architectural/design and development, and operational training, to be performance obligations that are separate from the license to operate under the Starbucks brand. These services provide distinct value to our licensees, including business and industry insight and knowledge that transfers value apart from the license. Revenues associated with pre-opening services are recognized upon completion of the related performance obligations, generally when a store is opened. Royalty revenues are recognized based upon a percentage of reported sales, and other continuing fees, such as marketing and service fees, are recognized as the performance obligations are met.
Stored Value Cards
Stored value cards can be activated through various channels, including at our company-operated and most licensed store locations, online at Starbucks.com, or via mobile devices held by our customers and at certain other third-party websites and locations, such as grocery stores, although they cannot be reloaded at these third-party websites or locations. Amounts loaded onto stored value cards are initially recorded as deferred revenue and recognized as revenue upon redemption. Historically, the majority of stored value cards are redeemed within one year.
In many of our company-operated markets, including the U.S., our stored value cards do not have an expiration date, nor do we charge service fees that cause a decrement to customer balances. Based on historical redemption rates, a portion of stored value cards is not expected to be redeemed and will be recognized as breakage over time in proportion to stored value card redemptions. The redemption rates are based on historical redemption patterns for each market, including the timing and business channel in which the card was activated or reloaded, and remittance to government agencies under unclaimed property laws, if applicable.
Breakage is recognized as company-operated stores and licensed stores revenue within the consolidated statement of earnings. For the fiscal years ended September 28, 2025, September 29, 2024, and October 1, 2023, we recognized breakage revenue of $ 200.4 million, $ 187.6 million, and $ 196.1 million in company-operated store revenues, respectively, and $ 22.0 million, $ 20.0 million, and $ 18.9 million in licensed store revenues, respectively.
Loyalty Program
Customers in the U.S., Canada, and certain other countries who register their stored value card are automatically enrolled in the Starbucks Rewards program, which is primarily a spend-based loyalty program. They earn loyalty points (“Stars”) in a variety of ways, including with each purchase at participating Starbucks stores. Starbucks Rewards members can earn Stars by paying with cash, credit or debit cards, or selected mobile wallets at company-operated and certain participating licensed stores in the U.S. and Canada. After accumulating a certain number of Stars, the customer earns a reward that can be redeemed for free product that, regardless of where the related Stars were earned within that country, will be honored at company-operated stores and certain participating licensed store locations in that same country.
We defer revenue associated with the estimated selling price of Stars earned by Starbucks Rewards members towards free products as each Star is earned and a corresponding liability is established in deferred revenue. This deferral is based on the estimated value of the product for which the reward is expected to be redeemed, net of estimated unredeemed Stars. Stars generally expire after six to twelve months, depending on the market.
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When a customer redeems an earned reward, we recognize revenue for the redeemed product and reduce the related deferred revenue.
Other Revenues
Other revenues primarily include royalty revenues, sales of packaged coffee, tea, and a variety of ready-to-drink beverages and single-serve coffee and tea products to customers outside of our company-operated and licensed stores. Sales of these products are generally recognized upon shipment to customers, depending on contract terms.
Other revenues also include product sales to, and licensing revenue from, Nestlé related to our Global Coffee Alliance. Product sales to Nestlé are generally recognized when the product is shipped, whereas royalty revenues are recognized based on a percentage of reported sales.
Deferred Revenues
Our deferred revenue primarily consists of the up-front prepaid royalty from Nestlé, for which we have continuing performance obligations to support the Global Coffee Alliance, and our unredeemed stored value card liability and unredeemed Stars associated with our loyalty program. See Note 11 , Deferred Revenue, for further information.
Disaggregation of Revenues
Revenues disaggregated by segment, product type, and geographic area are disclosed in Note 17 , Segment Reporting .

Product and Distribution Costs
Product and distribution costs primarily include expenses related to raw materials, purchased goods, packaging, delivery, and tariff impacts, along with operational costs of our supply chain organization. This encompasses wages, benefits, occupancy costs, and depreciation associated with sourcing, procuring, manufacturing, warehousing, and transportation of products sold at our company-operated and licensed stores, as well as through Channel Development and our other businesses. Additionally, it includes costs related to inventory and supply chain asset impairment s.

Store Operating Expenses
Store operating expenses consist of costs incurred in our company-operated stores, primarily wages and benefits related to store partners (employees), occupancy costs, marketing, delivery commissions, and other costs that directly support the operation and sales-related activities of those stores.

General and Administrative Expenses
General and administrative expenses primarily consist of wages and benefits, professional service fees, and occupancy costs for corporate headquarters and regional offices that support our corporate functions .

Advertising
We expense most advertising costs as they are incurred, except for certain production costs that are expensed the first time the advertising takes place. Advertising expenses totaled $ 869.5 million, $ 597.3 million, and $ 507.8 million in fiscal 2025, 2024, and 2023, respectively.

Store Preopening Expenses
Costs incurred in connection with the start-up and promotion of new company-operated store openings are expensed as incurred.

Asset Retirement Obligations
We recognize a liability for the fair value of required asset retirement obligations (“ARO”) when such obligations are incurred. Our AROs are primarily associated with leasehold improvements, which, at the end of a lease, we are contractually obligated to remove to comply with the lease agreement. At the inception of a lease with such conditions, we record an ARO liability and a corresponding capital asset in an amount equal to the estimated fair value of the obligation. We estimate the liability using a number of assumptions, including store closing costs, cost inflation rates, and discount rates, and accrete the liability to its projected future value over time. The capitalized asset is depreciated using the same depreciation convention as leasehold improvement assets. Upon satisfaction of the ARO conditions, any difference between the recorded ARO liability and the actual retirement costs incurred is recognized as a gain or loss in store operating expenses on our consolidated statements of earnings. As of September 28, 2025, and September 29, 2024, our net ARO assets included in property, plant and equipment were $ 25.5 million and $ 25.1 million, respectively, and our net ARO liabilities included in other long-term liabilities were $ 126.3 million and $ 119.2 million, respectively.
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Stock-based Compensation
We maintain several equity incentive plans under which we may grant non-qualified stock options, incentive stock options, restricted stock, restricted stock units (“RSUs”), or stock appreciation rights to employees, non-employee directors, and consultants; stock options have not been broadly used as part of our compensation strategy in recent years. We also have an employee stock purchase plan (“ESPP”). RSUs issued by us are equivalent to nonvested shares under the applicable accounting guidance. We record stock-based compensation expense based on the fair value of stock awards at the grant date and recognize the expense over the related service period following a graded vesting expense schedule. Expense for performance-based RSUs is recognized when it is probable the performance goal will be achieved. Performance goals are determined by the Board and may include measures such as earnings per share, comparable store sales, operating income, return on invested capital, total shareholder return, and metrics focused on achievement of key components of the “Back to Starbucks” plan. The fair value of RSUs is based on the closing price of Starbucks common stock on the award date, less the present value of the dividends expected to be paid on the underlying shares during the vesting period. The fair value of each stock option granted is estimated on the grant date using the Black-Scholes-Merton option valuation model. The assumptions used to calculate the fair value of options granted are evaluated and revised, as necessary, to reflect market conditions and our historical experience. If applicable, our total shareholder return relative to our peer group is incorporated into the underlying assumptions using a Monte Carlo simulation valuation model to calculate grant date fair value. The related assumptions used in the Monte Carlo simulation valuation model include expected term, volatility, dividend yield, and risk-free interest rate. Compensation expense is recognized over the requisite service period for each separately vesting portion of the award, and only for those awards expected to vest, with forfeitures estimated at the date of grant based on our historical experience and future expectations.

Foreign Currency Translation
Our international operations generally use their local currency as their functional currency. Assets and liabilities are translated at exchange rates in effect at the balance sheet date. Income and expense accounts are translated at the average monthly exchange rates during the year. Resulting translation adjustments are reported as a component of OCI and recorded in AOCI on our consolidated balance sheets.

Income Taxes
We compute income taxes using the asset and liability method, under which deferred income taxes are recognized based on the differences between the financial statement carrying amounts and the respective tax bases of our assets and liabilities. Deferred tax assets and liabilities are measured using current enacted tax rates expected to apply to taxable income in the years in which we expect the temporary differences to reverse. The effect of a change in tax rates on deferred taxes is recognized in income in the period that includes the enactment date.
We routinely evaluate the likelihood of realizing the benefit of our deferred tax assets and may record a valuation allowance if, based on all available evidence, we determine that some portion of the tax benefit will not be realized. In evaluating our ability to recover our deferred tax assets within the jurisdictions from which they arise, we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies, and results of recent operations. If we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.
In addition, our income tax returns are periodically audited by domestic and foreign tax authorities. These audits include review of our tax filing positions, including the timing and amount of deductions taken and the allocation of income between tax jurisdictions. We evaluate our exposures associated with our various tax filing positions and recognize a tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the relevant taxing authorities, including resolutions of any related appeals or litigation processes, based on the technical merits of our position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. For uncertain tax positions that do not meet this threshold, we record a related liability. We adjust our unrecognized tax benefit liability and income tax expense in the period in which the uncertain tax position is effectively settled, the statute of limitations expires for the relevant taxing authority to examine the tax position, or when new information becomes available.
Starbucks recognizes interest and penalties related to income tax matters in income tax expense on our consolidated statements of earnings. Accrued interest and penalties are included within the related tax balances on our consolidated balance sheets.
Global intangible low-taxed income (“GILTI”) provisions are applied, providing an incremental tax on foreign income. We have made a policy election to classify taxes due under the GILTI provision as a current period expense.
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Earnings per Share
Basic earnings per share is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed based on the weighted average number of shares of common stock and the effect of dilutive potential common shares outstanding during the period, calculated using the treasury stock method. Dilutive potential common shares include outstanding stock options and RSUs. Performance-based RSUs are considered dilutive when the related performance criterion has been met.

Common Stock Share Repurchases
We may repurchase shares of Starbucks common stock under a program authorized by our Board, including pursuant to a contract, instruction, or written plan meeting the requirements of Rule 10b5-1(c)(1) of the Exchange Act. Under applicable Washington State law, shares repurchased are retired and not displayed separately as treasury stock on the financial statements. Instead, the par value of repurchased shares is deducted from common stock, and the excess repurchase price over par value is deducted from additional paid-in capital and from retained earnings (deficit).

Recent Accounting Pronouncements
Recently Adopted Accounting Pronouncements
In the fourth quarter of fiscal 2025, we adopted the Financial Accounting Standards Board (“FASB”) issued guidance expanding segment disclosure requirements. The amendments require enhanced disclosure for certain segment items and disclosure on how our Chief Operating Decision Maker (“CODM”) uses reported measures to assess segment performance. The amendments do not change how segments are determined, aggregated, or how thresholds are applied to determine reportable segments. The adoption of this guidance did not have a significant impact on our consolidated financial statement disclosures. Refer to  Note 1 7 , Segment Reporting, for our segment disclosures including enhancements as a result of the amendments.
Recent Accounting Pronouncements Not Yet Adopted
In December 2023, the FASB issued guidance expanding disclosure requirements related to income taxes. The amendments require enhanced jurisdictional disclosures for the income tax rate reconciliation and related to cash income taxes paid. Additionally, certain disclosures related to unrecognized tax benefits and indefinite reinvestment assertions were removed. The amendments are effective for our fiscal year ending September 27, 2026. While we are still evaluating the specific impacts, we anticipate this guidance will have a significant impact on our annual income tax disclosures.
In November 2024, the FASB issued guidance expanding disclosure requirements related to certain income statement expenses. The amendments require tabular disclosure of certain operating expenses disaggregated into categories, such as purchases of inventory, employee compensation, depreciation, and intangible asset amortization. The amendments are effective for our fiscal year ending October 1, 2028, and may be applied retrospectively. While we are still evaluating the specific impacts and adoption method, we anticipate this guidance will have a significant impact on our consolidated financial statement disclosures.
In July 2025, the FASB issued guidance providing a practical expedient for measuring expected credit losses on current accounts receivable and current contract assets arising from revenue transactions. The amendment is effective for our fiscal year ended October 3, 2027. While we are still evaluating the specific impacts, we anticipate the impact to be limited to the simplification of the estimation process, with no material impact on the allowance for credit losses.

Note 2:     Acquisitions and Divestitures
Fiscal 2025
On 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 2023
On 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.
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Note 3:     Derivative Financial Instruments
Interest Rates
From time to time, we enter into designated cash flow hedges to manage the variability in cash flows due to changes in benchmark interest rates. We enter into interest rate swap agreements, including forward-starting interest rate swaps and treasury locks, settled in cash based upon the difference between an agreed-upon benchmark rate and the prevailing benchmark rate at settlement. These agreements are generally settled around the time of the pricing of the related debt. Each derivative agreement’s gain or loss is recorded in AOCI and is subsequently reclassified to interest expense over the life of the related debt.
To hedge the exposure to changes in the fair value of our fixed-rate debt, we enter into interest rate swap agreements, which are designated as fair value hedges. The changes in fair values of these derivative instruments and the offsetting changes in fair values of the underlying hedged debt due to changes in the relevant benchmark interest rates are recorded in interest expense. Refer to  Note 9 , Debt, for additional information on our long-term debt.
Foreign Currency
To reduce cash flow volatility from foreign currency fluctuations, we enter into forward and swap contracts to hedge portions of cash flows of anticipated royalty revenue, inventory purchases, and intercompany borrowing and lending activities. The resulting gains and losses from these derivatives are recorded in AOCI and subsequently reclassified to revenue, product and distribution costs, or interest income and other, net, respectively, when the hedged exposures affect net earnings.
From time to time, we may enter into financial instruments, including, but not limited to, forward and swap contracts or foreign currency-denominated debt, to hedge the currency exposure of our net investments in certain international operations. The resulting gains and losses from these derivatives are recorded in AOCI and are subsequently reclassified to net earnings when the hedged net investment is either sold or substantially liquidated. Gains and losses from these derivatives, representing hedged components excluded from the assessment of effectiveness, are amortized over the life of the hedging instrument using a systematic and rational method and recognized in interest expense.
Foreign currency forward and swap contracts not designated as hedging instruments are used to mitigate the foreign exchange risk of certain other balance sheet items. Gains and losses from these derivatives are largely offset by the financial impact of translating foreign currency-denominated payables and receivables, and these gains and losses are recorded in interest income and other, net.
Commodities
Depending on market conditions, we may enter into coffee forward contracts, futures contracts, and collars to hedge anticipated cash flows under our price-to-be-fixed green coffee contracts, which are described further in  Note 5 , Inventories, or our longer-dated forecasted coffee demand where underlying fixed price and price-to-be-fixed contracts are not yet available. The resulting gains and losses are recorded in AOCI and are subsequently reclassified to product and distribution costs when the hedged exposure affects net earnings.
Depending on market conditions, we may also enter into dairy forward contracts and futures contracts to hedge a portion of anticipated cash flows under our dairy purchase contracts and our forecasted dairy demand. The resulting gains or losses are recorded in AOCI and are subsequently reclassified to product and distribution costs when the hedged exposure affects net earnings.
Cash flow hedges related to anticipated transactions are designated and documented at the inception of each hedge. Cash flows from hedging transactions are classified in the same categories as the cash flows from the respective hedged items. For de-designated cash flow hedges in which the underlying transactions are no longer probable of occurring or where price variability in the underlying cash flow ceases to exist, the related accumulated derivative gains or losses are recognized in interest income and other, net on our consolidated statements of earnings. These derivatives may be accounted for prospectively as non-designated derivatives until maturity, re-designated to new hedging relationships, or terminated early. We continue to believe transactions related to our designated cash flow hedges are probable to occur.
To mitigate the price uncertainty of a portion of our future purchases, including diesel fuel and other commodities, we enter into swap contracts, futures, and collars that are not designated as hedging instruments. The resulting gains and losses are recorded in interest income and other, net to help offset price fluctuations on our beverage, food, packaging, and transportation costs, which are included in product and distribution costs on our consolidated statements of earnings.
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Gains and losses on derivative contracts and foreign currency-denominated debt designated as hedging instruments included in AOCI and expected to be reclassified into earnings within 12 months, net of tax ( in millions ):
Net Gains/(Losses)
Included in AOCI
Net Gains/(Losses) Expected to be Reclassified from AOCI into Earnings within 12 Months Outstanding Contract/Debt Remaining Maturity
(Months)

Sep 28,
2025 Sep 29,
2024 Oct 1,
2023
Cash Flow Hedges:
Coffee $ 23.3   $ 60.1   $ ( 78.1 ) $ 20.0   6
Cross-currency swaps —   0.5   ( 0.6 ) —   0
Dairy —   2.0   ( 1.8 ) —   0
Foreign currency - other 19.0   11.5   39.6   13.8   34
Interest rates ( 1.4 ) ( 3.6 ) ( 6.6 ) ( 3.6 ) 0
Net Investment Hedges:
Cross-currency swaps 206.2   96.5   87.1   —   102
Foreign currency 16.0   16.0   16.0   —   0
Foreign currency debt 135.2   135.2   140.2   —   0

Pre-tax gains and losses on derivative contracts and foreign currency-denominated long-term debt designated as hedging instruments recognized in OCI and reclassifications from AOCI to earnings ( in millions ):
Year Ended
Gains/(Losses)
Recognized in
OCI Before Reclassifications
Gains/(Losses) Reclassified from
AOCI to Earnings Location of gain/(loss)
Sep 28,
2025 Sep 29,
2024 Oct 1,
2023 Sep 28,
2025 Sep 29,
2024 Oct 1,
2023
Cash Flow Hedges:
Coffee $ 40.4   $ 100.8   $ ( 152.9 ) $ 86.5   $ ( 61.2 ) $ 110.5   Product and distribution costs
Cross-currency swaps 0.9   2.7   4.9   —   1.4   3.1   Interest expense
1.4   0.1   0.3   Interest income and other, net
Dairy ( 1.3 ) 1.3   ( 11.1 ) 1.4   ( 3.8 ) ( 12.3 ) Product and distribution costs

Foreign currency - other 41.4   1.2   9.4   22.5   28.2   23.6   Licensed stores revenues
9.1   10.0   6.7   Product and distribution costs
—   —   0.2   Interest income and other, net

Interest rates ( 1.3 ) —   0.3   ( 4.1 ) ( 4.0 ) 1.4   Interest expense

Net Investment Hedges:
Cross-currency swaps (1)
255.9   62.0   54.1   109.0   49.6   27.4   Interest expense

Foreign currency debt —   ( 6.3 ) 19.1   —   —   —  

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

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Pre-tax gains and losses on non-designated derivatives and designated fair value hedging instruments and the related fair value hedged item recognized in earnings ( in millions ):
Gains/(Losses) Recognized in Earnings
  Location of gain/(loss) recognized in earnings Year Ended
  Sep 28, 2025 Sep 29, 2024 Oct 1, 2023
Non-Designated Derivatives:
Dairy Interest income and other, net $ 0.1   $ ( 0.1 ) $ ( 0.1 )
Diesel fuel and other commodities Interest income and other, net 0.1   ( 1.9 ) ( 2.0 )
Coffee Interest income and other, net —   —   ( 5.4 )
Foreign currency - other Interest income and other, net 2.4   0.1   ( 3.6 )
Fair Value Hedges:
Interest rate swap Interest expense ( 7.1 ) 9.9   ( 18.7 )
Long-term debt (hedged item) Interest expense ( 2.0 ) ( 22.3 ) ( 12.3 )

Notional amounts of outstanding derivative contracts (in millions) :
Sep 28, 2025 Sep 29, 2024
Coffee $ 387   $ 154  
Cross-currency swaps 4,197   4,213  
Dairy —   65  
Diesel fuel and other commodities 2   3  
Foreign currency - other 930   920  
Interest rate swaps 350   350  

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Fair value of outstanding derivative contracts ( in millions ) including the location of the asset and/or liability on the consolidated balance sheets:
Derivative Assets
Balance Sheet Location Sep 28, 2025 Sep 29, 2024
Designated Derivative Instruments (1) :

Cross-currency swaps Prepaid expenses and other current assets
$ —   $ 3.9  
Other long-term assets 271.9   177.4  
Dairy Prepaid expenses and other current assets —   0.8  
Foreign currency - other Prepaid expenses and other current assets 13.0   1.9  
Other long-term assets 6.7   1.7  

Non-designated Derivative Instruments:
Dairy Prepaid expenses and other current assets —   0.3  
Diesel fuel and other commodities Prepaid expenses and other current assets 0.1   —  
Foreign currency Prepaid expenses and other current assets 2.7   1.8  

Derivative Liabilities
Balance Sheet Location Sep 28, 2025 Sep 29, 2024
Designated Derivative Instruments:

Cross-currency swaps Accrued liabilities
$ 5.8   $ 21.7  
Other long-term liabilities 3.5   33.3  

Foreign currency - other Accrued liabilities 0.2   4.7  
Other long-term liabilities 0.2   4.1  

Interest rate swaps
Other long-term liabilities 17.0   19.2  

Non-designated Derivative Instruments:

Diesel fuel and other commodities Accrued liabilities
—   0.3  
Foreign currency Accrued liabilities 1.1   2.5  
Other long-term liabilities 0.2   0.1  

(1) We also hold cash and cash equivalents from various settled-to-market exchange traded futures related to coffee and dairy hedging.
The following amounts were recorded on the consolidated balance sheets related to fixed-to-floating interest rate swaps designated in fair value hedging relationships (in millions) :
Carrying amount of hedged item Cumulative amount of fair value hedging adjustment included in the carrying amount
Sep 28, 2025 Sep 29, 2024 Sep 28, 2025 Sep 29, 2024
Location on the balance sheet
Long-term debt
$ 334.1   $ 332.2   $ ( 15.9 ) $ ( 17.8 )

Additional disclosures related to cash flow gains and losses included in AOCI, as well as subsequent reclassifications to earnings, are included in Note 12 , Equity .
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Note 4:     Fair Value Measurements
Assets and Liabilities Measured at Fair Value on a Recurring Basis (in millions):
    Fair Value Measurements at Reporting Date Using
  Balance at
September 28, 2025 Quoted Prices
in Active
Markets for 
Identical Assets
(Level 1)
Significant 
Other Observable 
Inputs
(Level 2)
Significant
Unobservable  Inputs
(Level 3)

Assets:
Cash and cash equivalents $ 3,219.8   $ 3,219.8   $ —   $ —  
Short-term investments:
Available-for-sale debt securities:

Corporate debt securities 67.8   —   55.9   11.9  

Mortgage and other asset-backed securities 0.4   —   0.4   —  

State and local government obligations 1.1   —   1.1   —  
U.S. government treasury securities 82.6   82.6   —   —  

Total available-for-sale debt securities 151.9   82.6   57.4   11.9  

Marketable equity securities 95.3   95.3   —   —  
Total short-term investments 247.2   177.9   57.4   11.9  
Prepaid expenses and other current assets:
Derivative assets 15.9   —   15.9   —  
Long-term investments:
Available-for-sale debt securities:

Corporate debt securities 132.2   —   105.5   26.7  

Mortgage and other asset-backed securities 75.7   —   75.7   —  
State and local government obligations 2.7   —   2.7   —  
U.S. government treasury securities 36.3   36.3   —   —  
Total Available-for-sale debt securities 246.9   36.3   183.9   26.7  

Total long-term investments 246.9   36.3   183.9   26.7  
Other long-term assets:
Derivative assets 278.6   —   278.6   —  
Total assets $ 4,008.4   $ 3,434.0   $ 535.8   $ 38.6  
Liabilities:
Accrued liabilities:
Derivative liabilities $ 7.1   $ —   $ 7.1   $ —  
Other long-term liabilities:
Derivative liabilities 20.9   —   20.9   —  
Total liabilities $ 28.0   $ —   $ 28.0   $ —  

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    Fair Value Measurements at Reporting Date Using
  Balance at
September 29, 2024 Quoted Prices
in Active
Markets for 
Identical Assets
(Level 1) Significant 
Other Observable 
Inputs
(Level 2) Significant
Unobservable  Inputs
(Level 3)
Assets:
Cash and cash equivalents $ 3,286.2   $ 3,286.2   $ —   $ —  
Short-term investments:
Available-for-sale debt securities

Corporate debt securities
51.8   —   51.8   —  
Foreign corporate bonds
0.2   —   0.2   —  
Mortgage and other asset-backed securities 0.4   —   0.4   —  
State and local government obligations
1.4   —   1.4   —  
U.S. government treasury securities 36.9   36.9   —   —  
Total available-for-sale debt securities 90.7   36.9   53.8   —  
Structured deposits 84.1   —   84.1   —  
Marketable equity securities 82.2   82.2   —   —  
Total short-term investments 257.0   119.1   137.9   —  
Prepaid expenses and other current assets:
Derivative assets 8.7   —   8.7   —  
Long-term investments:
Available-for-sale debt securities

Corporate debt securities 112.8   —   101.8   11.0  

Mortgage and other asset-backed securities 64.4   —   64.4   —  
State and local government obligations 3.7   —   3.7   —  
U.S. government treasury securities 94.9   94.9   —   —  
Total Available-for-sale debt securities
275.8   94.9   169.9   11.0  
Structured Deposit
0.2   —   0.2   —  
Total long-term investments
276.0   94.9   170.1   11.0  
Other long-term assets:
Derivative assets 179.1   —   179.1   —  
Total assets $ 4,007.0   $ 3,500.2   $ 495.8   $ 11.0  
Liabilities:
Accrued liabilities:
Derivative liabilities $ 29.2   $ —   $ 29.2   $ —  
Other long-term liabilities:
Derivative liabilities 56.7   —   56.7   —  
Total liabilities $ 85.9   $ —   $ 85.9   $ —  

There were no material transfers between levels, and there was no significant activity within Level 3 instruments during the periods presented. The fair values of any financial instruments presented above exclude the impact of netting assets and liabilities when a legally enforceable master netting agreement exists.
Available-for-sale Debt Securities
The majority of long-term in vestments mature with in 5 years . Proceeds from sales of securities we re $ 1.1 million, $ 1.3 million, and $ 2.5 million for fiscal 2025, 2024, and 2023, respectively. Realized gains and losses were not material f or fiscal 2025, 2024, and 2023. Gross unrealized holding gains and losses were not material as of September 28, 2025, and September 29, 2024.
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Marketable Equity Securities
Marketable equity securities include equity mutual funds and exchange-traded funds. Our marketable equity securities portfolio approximates a portion of our liability under our MDCP, a defined contribution plan. Our MDCP liability was $ 115.6 million and $ 112.3 million as of September 28, 2025, and September 29, 2024, respectively. The changes in net unrealized holding gains and losses in the marketable equity securities portfolio included in earnings for fiscal 2025, 2024, and 2023 were not material. Gross unrealized holding gains and losses on marketable equity securities were not material as of September 28, 2025, and September 29, 2024 .
Derivative Assets and Liabilities
Derivative assets and liabilities are described further in Note 3 , Derivative Financial Instruments.
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
Assets and liabilities recognized or disclosed at fair value on the consolidated financial statements on a nonrecurring basis include items such as property, plant and equipment, ROU assets, goodwill and other intangible assets, equity and other investments, and other assets. These assets are measured at fair value if determined to be impaired. Impairment of property, plant and equipment and ROU assets is included in Note 1 , Summary of Significant Accounting Policies and Estimates.
We recognized impairments during fiscal years ended September 28, 2025, September 29, 2024, and October 1, 2023. See Note 1 , Summary of Significant Accounting Policies and Estimates, and Note 18 , Restructuring, to the consolidated financial statements included i n Item 8 of Part II of this 10-K for additional discussion of these impairments.
Fair Value of Other Financial Instruments
The estimated fair value of our long-term debt based on the quoted market price (Level 2) is included at Note 9 , Debt.

Note 5:     Inventories (in millions)
Sep 28, 2025 Sep 29, 2024
Coffee:
Unroasted $ 911.2   $ 665.1  
Roasted 342.0   251.9  
Other merchandise held for sale (1)
399.7   384.6  
Packaging and other supplies 532.7   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.

Note 6:     Equity Investments (in millions)
Sep 28, 2025 Sep 29, 2024
Equity method investments $ 418.9   $ 424.1  
Other investments 47.3   39.8  
Total $ 466.2   $ 463.9  

Equity Method Investments
As of September 28, 2025 and September 29, 2024, we had a 50 % ownership interest in Tata Starbucks Limited (India), with a carrying value of $ 39.3  million and $ 41.1  million, respectively. Tata Starbucks Limited (India) operates licensed Starbucks ®  retail stores.
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We also license the rights to produce and distribute Starbucks-branded products to our 50 % owned joint venture, The North American Coffee Partnership with the Pepsi-Cola Company, which develops and distributes bottled Starbucks ® beverages, including Frappuccino coffee drinks, Starbucks Doubleshot espresso drinks, Starbucks ® Iced Espresso Classics, and Starbucks ® Iced Coffee. As of September 28, 2025 and September 29, 2024, the carrying value of this investment was $ 74.0  million and $ 112.3  million, respectively.
Our share of income and losses from our equity method investments is included in income from equity investees on our consolidated statements of earnings. Also included in this line item is our proportionate share of gross profit resulting from coffee and other product sales to, and royalty and license fee revenues generated from, equity investees. Revenues generated from these entities were $ 58.1 million, $ 62.6 million, and $ 85.7 million in fiscal 2025, 2024, and 2023, respectively. Related product and distribution costs were $ 57.7 million, $ 58.6 million, and $ 85.6 million in fiscal 2025, 2024, and 2023, respectively. As of September 28, 2025, and September 29, 2024, there were $ 17.3 million and $ 12.2 million of accounts receivable from equity investees, respectively, on our consolidated balance sheets, primarily related to product sales and royalty revenues.
We also hold equity interests in other entities to support our corporate and investment strategies, which are not core to our business, including our limited partnership interest in Valor Siren Ventures I L.P. and Valor Siren Ventures II L.P, which are private equity funds investing in technologies, products, and solutions relating to food or retail. The total carrying value of these investments was $ 242.4  million and $ 211.9  million, as of September 28, 2025 and September 29, 2024, respectively. Our share of income and losses from these private equity interests is included in interest income and other, net on our consolidated statements of earnings. The related financial statement activities were not material during the periods presented.
Other Investments
We have equity interests in entities that develop and operate Starbucks licensed stores in several global markets, as well as in companies that support our strategic initiatives. We do not have significant influence over these entities, and their fair values are not readily determinable. Therefore, we elected to measure these investments at cost with adjustments for observable changes in price or impairment.
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Note 7:     Supplemental Balance Sheet and Statement of Earnings Information (in millions)
Property, Plant and Equipment, net
Sep 28, 2025 Sep 29, 2024
Land $ 54.9   $ 56.9  
Buildings 673.7   684.8  
Leasehold improvements 11,762.4   11,453.9  
Store equipment 3,963.6   3,803.6  
Roasting equipment 982.2   865.7  
Capitalized software
1,177.7   1,049.7  
Furniture, fixtures and other 893.9   775.5  
Work in progress 334.3   750.9  
Property, plant and equipment, gross 19,842.7   19,441.0  
Accumulated depreciation ( 11,349.2 ) ( 10,775.5 )
Property, plant and equipment, net $ 8,493.5   $ 8,665.5  

Accrued Liabilities
Sep 28, 2025 Sep 29, 2024

Accrued occupancy costs $ 89.5   $ 81.7  
Accrued dividends payable 704.8   691.2  
Accrued capital and other operating expenditures 897.0   842.8  
Insurance reserves
282.3   244.3  
Income taxes payable 150.3   123.5  
Accrued business taxes 235.8   211.2  
Total accrued liabilities $ 2,359.7   $ 2,194.7  

Store Operating Expenses
Year Ended
Sep 28, 2025 Sep 29, 2024 Oct 1, 2023
Wages and benefits $ 9,862.4   $ 8,828.6   $ 8,733.4  
Occupancy costs 3,318.6   3,050.6   2,871.0  
Other expenses 3,877.9   3,407.3   3,115.9  
Total store operating expenses $ 17,058.9   $ 15,286.5   $ 14,720.3  

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Note 8:     Other Intangible Assets and Goodwill
Indefinite-Lived Intangible Assets
(in millions) Sep 28, 2025 Sep 29, 2024
Trade names, trademarks, and patents
$ 79.5   $ 79.5  

Finite-Lived Intangible Assets
Sep 28, 2025 Sep 29, 2024
(in millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount
Acquired and reacquired rights $ 1,053.9   $ ( 974.9 ) $ 79.0   $ 995.5   $ ( 995.5 ) $ —  
Acquired trade secrets and processes 27.6   ( 27.6 ) —   27.6   ( 27.6 ) —  
Trade names, trademarks, and patents
131.2   ( 122.9 ) 8.3   130.4   ( 110.0 ) 20.4  
Licensing agreements 13.0   ( 13.0 ) —   13.4   ( 12.4 ) 1.0  
Other finite-lived intangible assets 20.5   ( 20.5 ) —   20.9   ( 20.9 ) —  
Total finite-lived intangible assets $ 1,246.2   $ ( 1,158.9 ) $ 87.3   $ 1,187.8   $ ( 1,166.4 ) $ 21.4  

Amortization expense for finite-lived intangible assets was $ 17.6 million, $ 20.4 million, and $ 21.5 million during fiscal 2025, 2024, and 2023, respectively.
Estimated future amortization expense as of September 28, 2025 ( in millions ):
Fiscal Year

2026 $ 6.1  
2027 5.9  
2028 5.3  
2029 4.9  
2030 4.7  
Thereafter 60.4  
Total estimated future amortization expense $ 87.3  

Goodwill
Changes in the carrying amount of goodwill by reportable operating segment (in millions) :
North America International Channel
Development Corporate and Other Total
Goodwill balance at October 1, 2023
$ 491.5   $ 2,691.1   $ 34.7   $ 1.0   $ 3,218.3  

Other (1)
—   97.4   —   —   97.4  
Goodwill balance at September 29, 2024
$ 491.5   $ 2,788.5   $ 34.7   $ 1.0   $ 3,315.7  
Acquisition (2)
105.7   105.7  

Other (1)
( 0.9 ) ( 51.6 ) —   —   ( 52.5 )
Goodwill balance at September 28, 2025 $ 490.6   $ 2,842.6   $ 34.7   $ 1.0   $ 3,368.9  

(1) “Other” consists of changes in the goodwill balance resulting from foreign currency translation.
(2) Additions to goodwill include the acquisition of 23.5 Degrees Topco Limited in the first quarter of fiscal 2025.
During the fiscal year ended September 28, 2025, we completed our annual goodwill impairment analysis. The results of our analysis indicated significant excess fair values over carrying values across the different reporting units, and therefore no goodwill impairment was recorded , consistent with the fiscal year ended September 29, 2024.

Note 9:     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”).
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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 Debt
Under our commercial paper program, we may issue unsecured commercial paper notes up to a maximum aggregate amount outstanding at any time of $ 3.0 billion, with individual maturities that may vary but not exceed 397 days from the date of issue. Amounts outstanding under the commercial paper program are required to be backstopped by available commitments under our 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. We had no borrowings outstanding under our commercial paper program as of September 28, 2025, and September 29, 2024. Our total available contractual borrowing capacity for general corporate purposes was $ 3.0 billion as of September 28, 2025.
Additionally, we hold the following Japanese yen-denominated credit facilities that are available for working capital needs and capital expenditures within our Japanese market:
• A ¥ 5.0 billion, or $ 33.4 million, credit facility is currently set to mature on December 30, 2025. Borrowings under this credit facility are subject to terms defined within the facility and will bear interest at a variable rate based on TIBOR plus an applicable margin of 0.400 %.
• A ¥ 10.0 billion, or $ 66.8 million, credit facility is currently set to mature on March 27, 2026. Borrowings under this credit facility are subject to terms defined within the facility and will bear interest at a variable rate based on TIBOR plus an applicable margin of 0.300 %.
As of September 28, 2025 and September 29, 2024, we had no borrowings outstanding under these credit facilities.
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Long-term Debt
Components of long-term debt including the associated interest rates and related estimated fair values by calendar maturity ( in millions, except interest rates) :
Sep 28, 2025 Sep 29, 2024 Stated Interest Rate Effective Interest Rate (1)

Issuance Face Value Estimated Fair Value Face Value Estimated Fair Value

August 2025 notes $ —   $ —   $ 1,250.0   $ 1,243.4   3.800   % 3.721   %
February 2026 notes 1,000.0   1,001.7   1,000.0   1,008.3   4.750   % 4.788   %
June 2026 notes 500.0   494.0   500.0   486.8   2.450   % 2.511   %
February 2027 notes
1,000.0   1,009.8   1,000.0   1,017.8   4.850   % 4.958   %
March 2027 notes 500.0   484.7   500.0   477.1   2.000   % 2.058   %
March 2028 notes 600.0   591.9   600.0   590.3   3.500   % 3.529   %
May 2028 notes 750.0   757.1   —   —   4.500   % 4.719   %
November 2028 notes 750.0   747.9   750.0   748.4   4.000   % 3.958   %
August 2029 notes (2)
1,000.0   978.5   1,000.0   977.3   3.550   % 3.840   %
March 2030 notes 750.0   687.8   750.0   679.0   2.250   % 3.084   %
May 2030 notes 500.0   510.2   —   —   4.800   % 4.932   %
November 2030 notes 1,250.0   1,145.9   1,250.0   1,135.4   2.550   % 2.582   %
February 2031 notes
500.0   514.2   500.0   520.8   4.900   % 5.046   %
February 2032 notes 1,000.0   918.1   1,000.0   912.0   3.000   % 3.155   %
February 2033 notes 500.0   505.7   500.0   513.1   4.800   % 3.798   %
February 2034 notes
500.0   509.9   500.0   515.0   5.000   % 5.127   %
May 2035 notes 500.0   516.6   —   —   5.400   % 5.510   %
June 2045 notes 350.0   292.1   350.0   308.5   4.300   % 4.348   %
December 2047 notes 500.0   378.0   500.0   398.8   3.750   % 3.765   %
November 2048 notes 1,000.0   849.6   1,000.0   903.4   4.500   % 4.504   %
August 2049 notes 1,000.0   839.5   1,000.0   889.0   4.450   % 4.447   %
March 2050 notes 500.0   346.0   500.0   367.9   3.350   % 3.362   %
November 2050 notes 1,250.0   889.0   1,250.0   954.4   3.500   % 3.528   %
   Total 16,200.0   14,968.2   15,700.0   14,646.7  
Aggregate debt issuance costs and unamortized premium/(discount), net ( 109.3 ) ( 113.8 )
Hedge accounting fair value adjustment (2)
( 15.9 ) ( 17.8 )
   Total $ 16,074.8   $ 15,568.4  

(1) Includes the effects of the amortization of any premium or discount and any gain or loss upon settlement of related treasury locks or forward-starting interest rate swaps utilized to hedge the interest rate risk prior to the debt issuance.
(2) Amount includes the change in fair value due to changes in benchmark interest rates related to hedging $ 350 million of our August 2029 notes. Refer to Note 3 , Derivative Financial Instruments, for additional information on our interest rate swap designated as a fair value hedge.

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The following table summarizes our long-term debt maturities as of September 28, 2025, by fiscal year ( in millions ):
Fiscal Year Total
2026
$ 1,500.0  
2027 1,500.0  
2028 1,350.0  
2029 1,750.0  
2030 1,250.0  
Thereafter 8,850.0  
Total $ 16,200.0  

Note 10:     Leases
The components of lease costs (in millions) :
Year Ended
Sep 28, 2025 Sep 29, 2024 Oct 1, 2023
Operating lease costs (1)
$ 2,097.0   $ 1,723.5   $ 1,601.0  
Variable lease costs 1,245.7   1,130.7   1,050.3  
Short-term lease costs 21.0   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 Ended
Sep 28, 2025 Sep 29, 2024 Oct 1, 2023
Cash 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, 2025 Sep 29, 2024 Oct 1, 2023
Weighted-average remaining operating lease term 8.6 years 8.6 years 8.5 years
Weighted-average operating lease discount rate 3.7   % 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 she et. 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 Year Total
2026 $ 1,940.6  
2027 1,757.3  
2028 1,548.4  
2029 1,360.4  
2030 1,190.3  
Thereafter 4,592.2  
Total lease payments 12,389.2  
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, p rimarily related to real estate leases. These leases will commence between fiscal year 2026 and fiscal year 2028 with lease terms of 5
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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 i n Item 8 of Part II of this 10-K, for further discussion.

Note 11:     Deferred Revenue
During 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, 2025
Total
Stored value cards and loyalty program at September 29, 2024
$ 1,718.7  
Revenue deferred - card activations, card reloads and Stars earned 15,245.8  
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, 2024
Total
Stored value cards and loyalty program at October 1, 2023
$ 1,567.5  
Revenue deferred - card activations, card reloads and Stars earned 15,807.1  
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 $ 1.6 billion of the respective amounts was current.

Note 12:    Equity
In addition to 2.4 billion shares of authorized common stock with $ 0.001  par value per share, we have authorized 7.5 million shares of preferred stock, none of which was outstanding at September 28, 2025.
During the fiscal year ended September 28, 2025, we made no share repurchases. During the fiscal year ended September 29, 2024 and October 1, 2023, we repurchased 12.8 million shares of common stock for $ 1.3 billion on the open market and 10.0 million shares of common stock for $ 1.0 billion on the open market, respectively.
As of September 28, 2025, 29.8 million shares remained available for repurchase under current authorizations.
During the fourth quarter of fiscal 2025, our Board declared a quarterly cash dividend to shareholders of $ 0.62 per share to be paid on November 28, 2025, to shareholders of record as of the close of business on November 14, 2025.
Comprehensive Income
Comprehensive income includes all changes in equity during the period, except those resulting from transactions with our shareholders. Comprehensive income is comprised of net earnings and other comprehensive income. Accumulated other comprehensive income reported on our consolidated balance sheets consists of foreign currency translation adjustments and
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other items and the unrealized gains and losses, net of applicable taxes, on available-for-sale debt securities and on derivative instruments designated and qualifying as cash flow and net investment hedges.
Changes in AOCI by component for the fiscal years ended September 28, 2025, September 29, 2024, and October 1, 2023, net of tax, are as follows:
(in millions)  Available-for-Sale Securities  Cash Flow Hedges  Net Investment Hedges Translation Adjustment and Other Total
September 28, 2025
Net gains/(losses) in AOCI, beginning of period $ ( 2.3 ) $ 70.5   $ 247.7   $ ( 744.7 ) $ ( 428.8 )
Net gains/(losses) recognized in OCI before reclassifications 1.9   62.2   191.3   ( 113.2 ) 142.2  
Net (gains)/losses reclassified from AOCI to earnings 0.9   ( 91.8 ) ( 81.6 ) —   ( 172.5 )
Other comprehensive income/(loss) attributable to Starbucks 2.8   ( 29.6 ) 109.7   ( 113.2 ) ( 30.3 )

Other comprehensive income/(loss) attributable to NCI —   —   —   ( 0.2 ) ( 0.2 )
Net gains/(losses) in AOCI, end of period $ 0.5   $ 40.9   $ 357.4   $ ( 858.1 ) $ ( 459.3 )

(in millions)  Available-for-Sale Securities  Cash Flow Hedges  Net Investment Hedges Translation Adjustment and Other Total
September 29, 2024
Net gains/(losses) in AOCI, beginning of period $ ( 12.3 ) $ ( 47.5 ) $ 243.3   $ ( 961.7 ) $ ( 778.2 )
Net gains/(losses) recognized in OCI before reclassifications 9.1   89.8   41.6   216.7   357.2  
Net (gains)/losses reclassified from AOCI to earnings 0.9   28.2   ( 37.2 ) ( 0.1 ) ( 8.2 )
Other comprehensive income/(loss) attributable to Starbucks 10.0   118.0   4.4   216.6   349.0  
Other comprehensive income/(loss) attributable to NCI
—   —   —   0.4   0.4  
Net gains/(losses) in AOCI, end of period $ ( 2.3 ) $ 70.5   $ 247.7   $ ( 744.7 ) $ ( 428.8 )

(in millions)  Available-for-Sale Securities  Cash Flow Hedges  Net Investment Hedges Translation Adjustment and Other Total
October 1, 2023
Net gains/(losses) in AOCI, beginning of period $ ( 15.5 ) $ 199.0   $ 209.1   $ ( 855.8 ) $ ( 463.2 )
Net gains/(losses) recognized in OCI before reclassifications 2.5   ( 132.2 ) 54.7   ( 106.5 ) ( 181.5 )
Net (gains)/losses reclassified from AOCI to earnings 0.7   ( 114.3 ) ( 20.5 ) 1.3   ( 132.8 )
Other comprehensive income/(loss) attributable to Starbucks 3.2   ( 246.5 ) 34.2   ( 105.2 ) ( 314.3 )
Other comprehensive income/(loss) attributable to NCI
—   —   —   ( 0.7 ) ( 0.7 )
Net gains/(losses) in AOCI, end of period $ ( 12.3 ) $ ( 47.5 ) $ 243.3   $ ( 961.7 ) $ ( 778.2 )

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Impact of reclassifications from AOCI on the consolidated statements of earnings (in millions) :
AOCI
Components
Amounts Reclassified from AOCI Affected Line Item in
the Statements of Earnings

Year Ended
Sep 28, 2025 Sep 29, 2024 Oct 1, 2023
Gains/(losses) on available-for-sale securities $ ( 0.9 ) $ ( 1.2 ) $ ( 0.7 ) Interest income and other, net
Gains/(losses) on cash flow hedges 116.8   ( 29.3 ) 133.5   Please refer to Note 3 , Derivative Financial Instruments, for additional information.

Gains/(losses) on net investment hedges 109.0   49.6   27.4   Interest expense

Other (1)
—   0.1   ( 1.3 ) Interest income and other, net

224.9   19.2   158.9   Total before tax
( 52.4 ) ( 11.0 ) ( 26.1 ) Tax (expense)/benefit
$ 172.5   $ 8.2   $ 132.8   Net of tax

(1)      Release of cumulative translation adjustments and other activities to earnings upon sale, liquidation, or dissolution of foreign businesses.

Note 13:     Employee Stock and Benefit Plans
We maintain several equity incentive plans under which we may grant non-qualified stock options, incentive stock options, restricted stock, restricted stock units (“RSUs”), or stock appreciation rights to employees, non-employee directors, and consultants. We issue new shares of common stock upon exercise of stock options and the vesting of RSUs. We also have an employee stock purchase plan (“ESPP”).
As of September 28, 2025, there were 74.5 million shares of common stock available for issuance pursuant to future equity-based compensation awards and 9.1 million shares available for issuance under our ESPP.
Stock-based compensation expense recognized in the consolidated statement of earnings (in millions) :
Fiscal Year Ended Sep 28, 2025 Sep 29, 2024 Oct 1, 2023
RSUs $ 318.3   $ 308.3   $ 302.6  
Options —   —   0.1  
Total stock-based compensation expense recognized in the consolidated statements of earnings $ 318.3   $ 308.3   $ 302.7  
Total related tax benefit $ 47.9   $ 57.0   $ 50.9  
Total capitalized stock-based compensation included in net property, plant and equipment on the consolidated balance sheets $ 3.6   $ 3.6   $ 3.7  

RSUs
We have both time-vested and performance-based RSUs. Time-vested RSUs are awarded to eligible employees and entitle the grantee to receive shares of common stock at the end of a vesting period, subject to the employee’s continuing employment. The time-vested RSUs generally vest in either two or four equal annual installments beginning a year from the grant date. Our performance-based RSUs are awarded to eligible employees and entitle the grantee to receive shares of common stock if we achieve specified performance goals during the performance period and the grantee remains employed through the settlement date.
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RSU transactions for the fiscal year ended September 28, 2025 (in millions, except per share and contractual life amounts) :
Number
of
Shares Weighted
Average
Grant Date
Fair Value
per Share Weighted
Average
Remaining
Contractual
Life (Years) Aggregate
Intrinsic
Value
Nonvested, September 29, 2024 8.7   $ 102.91   1.2 $ 844  
Granted 5.9   95.83  
Vested ( 3.3 ) 99.90  
Forfeited/canceled ( 2.3 ) 98.21  
Nonvested, September 28, 2025 9.0   $ 98.89   1.2 $ 791  

As of September 28, 2025, total unrecognized stock-based compensation expense related to non-vested RSUs, net of estimated forfeitures, was approximately $ 278 million, before income taxes, and is expected to be recognized over a weighted average period of approximately 2.1 years. The total fair value of RSUs vested was $ 333 million, $ 314 million, and $ 292 million during fiscal 2025, 2024, and 2023, respectively. For fiscal 2024 and 2023 , the weighted average fair value per RSU granted was $ 103.82 and $ 97.66 , respectively.
Stock Options
We may provide stock options as a form of employee compensation, which are primarily time-vested. Stock options have not been broadly used as part of our compensation strategy in recent years. The majority of time-vested options become exercisable in four equal installments beginning a year from the grant date and generally expire 10 years from the grant date. Options granted to non-employee directors generally vest immediately or one year from grant. All outstanding stock options are non-qualified stock options. No stock options were granted during the fiscal years ended September 28, 2025, September 29, 2024, or October 1, 2023.
Stock option transactions were not material for the fiscal year ended September 28, 2025. As of September 28, 2025, all options outstanding were vested and exercisable. No options vested during fiscal 2025 or 2024. The total intrinsic value of options exercised was $ 19 million, $ 44 million, and $ 98 million during fiscal 2025, 2024, and 2023, respectively.
ESPP
Our ESPP allows eligible employees to contribute up to 10 % of their base earnings toward the quarterly purchase of our common stock, subject to an annual maximum dollar amount. The purchase price is 95 % of the fair market value of the stock on the last business day of the quarterly offering period. The number of shares issued under our ESPP wa s 0.6 million, 0.6 million, and 0.5 million in fiscal years 2025, 2024, and 2023, respectively .
Deferred Compensation Plan
We have a Deferred Compensation Plan for Non-Employee Directors under which non-employee directors may, for any fiscal year, irrevocably elect to defer receipt of shares of common stock the director would have received upon vesting of restricted stock units. The number of deferred shares outstanding related to deferrals made under this plan is not material.
Defined Contribution Plans
We maintain voluntary defined contribution plans, both qualified and non-qualified, covering eligible employees as defined in the plan documents. Participating employees may elect to defer and contribute a portion of their eligible compensation to the plans up to limits stated in the plan documents, not to exceed the dollar amounts set by applicable laws.
Our matching contributions to all U.S. and non-U.S. plans were $ 209.6 million , $ 194.4 million, and $ 178.1 million in fiscal 2025, 2024, and 2023, respectively.

Note 14:     Income Taxes
Components of earnings before income taxes (in millions):
Fiscal Year Ended Sep 28, 2025 Sep 29, 2024 Oct 1, 2023
United States $ 1,850.1   $ 4,087.6   $ 4,488.6  
Foreign 657.2   882.0   913.3  
Total earnings before income taxes $ 2,507.3   $ 4,969.6   $ 5,401.9  

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Provision/(benefit) for income taxes (in millions):
Fiscal Year Ended Sep 28, 2025 Sep 29, 2024 Oct 1, 2023
Current taxes:
U.S. federal $ 179.4   $ 681.2   $ 678.2  
U.S. state and local 120.4   210.9   235.9  
Foreign 362.5   328.8   422.4  
Total current taxes 662.3   1,220.9   1,336.5  
Deferred taxes:
U.S. federal 30.2   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 Ended Sep 28, 2025 Sep 29, 2024 Oct 1, 2023
Statutory rate 21.0   % 21.0   % 21.0   %
State income taxes, net of federal tax benefit 3.4   3.3   3.4  
Foreign rate differential 0.3   0.3   0.4  
Residual tax on foreign earnings 3.6   0.4   —  
Foreign derived intangible income ( 1.6 ) ( 0.8 ) ( 0.8 )

Tax status change of foreign entity
( 1.4 ) —   —  

Other, net 0.6   0.1   ( 0.4 )
Effective tax rate 25.9   % 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.
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Tax effect of temporary differences and carryforwards that comprise significant portions of deferred tax assets and liabilities (in millions):
Sep 28, 2025 Sep 29, 2024
Deferred tax assets:
Operating lease liabilities $ 2,646.7   $ 2,595.1  

Stored value card liability and deferred revenue 1,593.0   1,612.5  
Intangible assets and goodwill 355.5   372.6  

Other 780.9   692.2  
Total 5,376.1   5,272.4  
Valuation allowance ( 189.2 ) ( 194.5 )
Total deferred tax asset, net of valuation allowance 5,186.9   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 ) ( 267.8 )
Total ( 3,410.4 ) ( 3,332.3 )
Net deferred tax asset (liability) $ 1,776.5   $ 1,745.6  
Reported as:

Deferred income tax assets $ 1,826.9   $ 1,766.7  

Deferred income tax liabilities (included in Other long-term liabilities) ( 50.4 ) ( 21.1 )
Net deferred tax asset (liability) $ 1,776.5   $ 1,745.6  

The valuation allowances as of September 28, 2025, and September 29, 2024, were primarily related to net operating losses and other deferred tax assets of consolidated foreign subsidiaries.
As of September 28, 2025, we had federal tax credit carryforwards of $ 68.5 million, which will begin to expire in fiscal 2030, and foreign net operating loss carryforwards of $ 444.8 million, of which $ 104.5 million have an indefinite carryforward period and the remainder will begin to expire in fiscal 2026.
Uncertain Tax Positions
As of September 28, 2025, we had $ 119.9 million of gross unrecognized tax benefits, of which $ 76.6 million, if recognized, would affect our effective tax rate. We recognized expense of $ 8.4 million, $ 8.8 million, and $ 5.7 million of interest and penalties in income tax expense, prior to the benefit of the federal tax deduction, for fiscal 2025, 2024, and 2023, respectively. As of September 28, 2025, and September 29, 2024, we had accrued interest and penalties of $ 30.4 million and $ 22.5 million, respectively, on our consolidated balance sheets.
The following table summarizes the activity related to our unrecognized tax benefits (in millions) :
Sep 28, 2025 Sep 29, 2024 Oct 1, 2023
Beginning balance $ 108.0   $ 105.0   $ 89.7  
Increase related to prior year tax positions 3.1   7.9   1.2  
Decrease related to prior year tax positions ( 0.4 ) ( 6.4 ) ( 0.4 )
Increase related to current year tax positions 12.9   10.3   14.5  

Decreases related to settlements with taxing authorities ( 0.7 ) ( 8.8 ) —  
Decrease related to lapsing of statute of limitations ( 3.0 ) —   —  
Ending balance $ 119.9   $ 108.0   $ 105.0  

We are currently under examination, or may be subject to examination, by various U.S. federal, state, local, and foreign tax jurisdictions for fiscal 2018 through 2024. We are no longer subject to U.S. federal, U.S. state and local, or material foreign market examinations for years prior to fiscal 2018.
It is reasonably possible that up to approximately $ 62  million of the Company’s gross unrecognized tax benefits may be recognized by the end of fiscal 2026 for reasons such as a lapse of the statute of limitations or resolution of examinations with tax authorities.
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Note 15:     Earnings per Share
Calculation of net earnings per common share (“EPS”) — basic and diluted (in millions, except EPS) :
Fiscal Year Ended Sep 28, 2025 Sep 29, 2024 Oct 1, 2023
Net earnings attributable to Starbucks $ 1,856.4   $ 3,760.9   $ 4,124.5  
Weighted average common shares outstanding (for basic calculation) 1,136.0   1,133.8   1,146.8  
Dilutive effect of outstanding common stock options and RSUs 3.8   3.5   4.5  
Weighted average common and common equivalent shares outstanding (for diluted calculation) 1,139.8   1,137.3   1,151.3  
EPS — basic $ 1.63   $ 3.32   $ 3.60  
EPS — diluted $ 1.63   $ 3.31   $ 3.58  

Potential dilutive shares consist of the incremental common shares issuable upon the exercise of outstanding stock options (both vested and non-vested) and unvested RSUs, calculated using the treasury stock method. The calculation of dilutive shares outstanding excludes anti-dilutive stock options or unvested RSUs, which were immaterial in the periods presented.

Note 16:     Commitments and Contingencies
Legal Proceedings
Starbucks is involved in various legal proceedings arising in the ordinary course of business, including litigation matters associated with labor union organizing efforts and certain employment litigation cases that have been certified as class or collective actions, but is not currently a party to any legal proceeding that management believes could have a material adverse effect on our consolidated financial position, results of operations, or cash flows. While we are closely monitoring the operational and financial impacts of labor union organizing efforts on our business, as of the date of this filing, we believe the risk of a material contingent loss associated with these litigation matters is remote.