10-Q – 2026-07-29 – sbux-20260628.htm

For the quarter ended June 28, 2026, compared with the quarter ended June 29, 2025
Product and distribution costs as a percentage of total net revenues decreased 100 basis points for the third quarter of fiscal 2026, primarily due to the conversion of Starbucks retail operations in China to our licensed joint venture model in the third quarter of fiscal 2026 (approximately 130 basis points), lower inflation paired with tariff refunds (approximately 80 basis points), partially offset by mix shift (approximately 110 basis points).
Store operating expenses as a percentage of total net revenues decreased 90 basis points for the third quarter of fiscal 2026. Store operating expenses as a percentage of company-operated stores revenue increased 30 basis points, primarily due to labor investments largely in support of “Back to Starbucks” (approximately 190 basis points), and increased reserves for self-insured claims (approximately 100 basis points), partially offset by sales leverage (approximately 250 basis points).
Other operating expenses decreased $20 million, primarily due to savings from simplifying our licensed business support organization ($15 million).
Depreciation and amortization expenses as a percentage of total net revenues decreased 60 basis points, primarily driven by the conversion of Starbucks retail operations in China to our licensed joint venture model in the third quarter of fiscal 2026.
General and administrative expenses decreased $78 million, primarily due to lapping of the Leadership Experience 2025 ($81 million), restructuring-related savings ($63 million), and the conversion of Starbucks retail operations in China to our licensed joint venture model in the third quarter of fiscal 2026 ($42 million). This was partially offset by increases in performance-based compensation ($79 million) and transaction-related expenses related to the conversion of Starbucks retail operations in China to our licensed joint venture model in the third quarter of fiscal 2026 ($44 million).
Restructuring and impairments increased $282 million, largely due to costs associated with the impairment of Starbucks Reserve and Roastery store locations, and partner severance costs. See Note 17 , Restructuring and Impairments, to the consolidated financial statements included in Item 1 of Part I of this 10-Q for further discussion.
Income from equity investees increased $22 million, primarily due to income from our China joint venture, which was formed upon the conversion of Starbucks retail operations in China to our licensed joint venture model in the third quarter of fiscal 2026.
41

Table of Conten t s

The combination of these changes resulted in an overall increase in operating margin of 60 basis points for the third quarter of fiscal 2026.
For the three quarters ended June 28, 2026, compared with the three quarters ended June 29, 2025
Product and distribution costs as a percentage of total net revenues increased 130 basis points for the first three quarters of fiscal 2026 largely due to mix shift (80 basis points).
Store operating expenses as a percentage of total net revenues decreased 40 basis points for the first three quarters of fiscal 2026. Store operating expenses as a percentage of company-operated stores revenue increased 40 basis points, primarily due to labor investments largely in support of “Back to Starbucks” (approximately 220 basis points), and increased reserves for self- insured claims (approximately 60 basis points), offset by sales leverage (approximately 300 basis points).
Other operating expenses decreased $49 million, primarily due to savings from simplifying our licensed business support organization ($45 million).
Depreciation and amortization expenses as a percentage of total net revenues decreased 60 basis points, primarily driven by ceasing depreciation upon classifying our Starbucks retail operations in China as held for sale in the first quarter of fiscal 2026 and converting Starbucks retail operations in China to our licensed joint venture model in the third quarter of fiscal 2026.
General and administrative expenses decreased $120 million, largely due to restructuring-related savings ($174 million) and lapping of the Leadership Experience 2025 ($81 million) and the conversion of Starbucks retail operations in China to our licensed joint venture model in the third quarter of fiscal 2026 ($42 million). This was partially offset by increases in performance-based compensation ($112 million) and transaction-related expenses related to the conversion of Starbucks retail operations in China to our licensed joint venture model in the third quarter of fiscal 2026 ($74 million).
Restructuring and impairments increased $279 million, largely due to costs associated with the impairment of Starbucks Reserve and Roastery store locations, and partner severance costs. See Note 17 , Restructuring and Impairments, to the consolidated financial statements included in Item 1 of Part I of this 10-Q, for further discussion.
Income from equity investees increased $27 million, primarily due to income from our China joint venture, which was formed upon the conversion of Starbucks retail operations in China to our licensed joint venture model in the third quarter of fiscal 2026.
The combination of these changes resulted in an overall decrease in operating margin of 20 basis points for the first three quarters of fiscal 2026.
42

Table of Conten t s

Other Income and Expenses  

  Quarter Ended Three Quarters Ended
Jun 28,
2026 Jun 29,
2025 $
Change Jun 28,
2026 Jun 29,
2025 Jun 28,
2026 Jun 29,
2025 $
Change Jun 28,
2026 Jun 29,
2025
As a % of Total
Net Revenues As a % of Total
Net Revenues
Operating income $ 980.4  $ 935.6  $ 44.8  10.5  % 9.9  % $ 2,699.3  $ 2,658.4  $ 40.9  9.4  % 9.6  %

Net gain resulting from divestiture of certain operations 536.3  —  536.3  5.8  —  536.3 0.0 536.3 1.9  0.0
Interest income and other, net 37.2  25.6  11.6  0.4  0.3  87.3  81.8  5.5  0.3  0.3 
Interest expense (134.6) (142.3) 7.7  (1.4) (1.5) (410.6) (396.8) (13.8) (1.4) (1.4)
Earnings before income taxes 1,419.3  818.9  600.4  15.2  8.7  2,912.3  2,343.4  568.9  10.1  8.5 
Income tax expense 374.4  260.4 114.0 4.0  % 2.8  1,063.3  619.9 443.4 3.7  % 2.2 
Net earnings including noncontrolling interests 1,044.9  558.5  486.4  11.2  5.9  1,849.0  1,723.5  125.5  6.4  6.2 
Net earnings/(loss) attributable to noncontrolling interests (0.4) 0.2  (0.6) 0.0  0.0  (0.6) 0.3  (0.9) 0.0  0.0 
Net earnings attributable to Starbucks $ 1,045.3   $ 558.3   $ 487.0   11.2   % 5.9   % $ 1,849.6   $ 1,723.2   $ 126.4   6.4   % 6.2   %
Effective tax rate including noncontrolling interests 26.4  % 31.8  % 36.5  % 26.5  %

For the quarter ended June 28, 2026, compared with the quarter ended June 29, 2025
Net gain resulting from divestiture of certain operations was $536.3 million, due to the divestiture of Starbucks retail operations in China during the third quarter of fiscal 2026.
Interest income and other, net increased $12 million, primarily due to higher cash balances and interest rates in the current year, partially offset by non-core investment impairments.
Interest expense decreased $8 million, primarily due to reduced debt balances in the current year.
The effective tax rate for the quarter ended June 28, 2026, was 26.4% compared to 31.8% for the same period in fiscal 2025. The decrease was primarily due to lapping the discrete impact of changes in indefinite reinvestment assertions for certain foreign entities in the third quarter of fiscal 2025 (approximately 850 basis points), partially offset by impacts resulting from the divestiture of Starbucks retail operations in China in the third quarter of fiscal 2026 (370 basis points).
For the three quarters ended June 28, 2026, compared with the three quarters ended June 29, 2025
Net gain resulting from divestiture of certain operations was $536.3 million, due to the divestiture of Starbucks retail operations in China during the third quarter of fiscal 2026.
Interest income and other, net increased $6 million, primarily due to higher cash balances and interest rates in the current year.
Interest expense increased $14 million, primarily due to reduced savings from cross-currency interest rate hedging, partially offset by reduced debt balances in the current year.
43

Table of Conten t s

The effective tax rate for the three quarters ended June 28, 2026, was 36.5% compared to 26.5% for the same period in fiscal 2025. The increase was primarily due to the $273 million discrete impact of changes in indefinite reinvestment assertions as a result of classifying Starbucks retail operations in China as held for sale in the first quarter of fiscal 2026 (approximately 640 basis points), impacts resulting from the divestiture of Starbucks retail operations in China during the third quarter of fiscal 2026 (approximately 240 basis points) and lapping the discrete impact of a tax status change for a certain foreign entity in the first quarter of fiscal 2025 (approximately 130 basis points).
44

Table of Conten t s

Segment Information
Results of operations by segment (in millions) :
North America
  Quarter Ended Three Quarters Ended
Jun 28,
2026 Jun 29,
2025 $
Change
Jun 28,
2026 Jun 29,
2025 Jun 28,
2026 Jun 29,
2025 $
Change Jun 28,
2026 Jun 29,
2025
As a % of North America
Total Net Revenues As a % of North America
Total Net Revenues
Net revenues:
Company-operated stores $ 6,754.8  $ 6,285.7  $ 469.1  91.3  % 90.7  % $ 19,675.0  $ 18,515.3  $ 1,159.7  91.2  % 90.4  %
Licensed stores 639.4  640.5  (1.1) 8.6  9.2  1,890.6  1,953.5  (62.9) 8.8  9.5 
Other 0.9  0.8  0.1  0.0  0.0  3.8  2.9  0.9  0.0  0.0 
Total net revenues 7,395.1   6,927.0   468.1   100.0   100.0   21,569.4   20,471.7   1,097.7   100.0   100.0  
Product and distribution costs 1,971.9  1,909.6  62.3  26.7  27.6  6,176.2  5,684.3  491.9  28.6  27.8 
Store operating expenses 3,789.3  3,552.4  236.9  51.2  51.3  11,266.3  10,442.5  823.8  52.2  51.0 
Other operating expenses 56.5  69.7  (13.2) 0.8  1.0  172.4  216.6  (44.2) 0.8  1.1 
Depreciation and amortization expenses 298.3  303.5  (5.2) 4.0  4.4  896.6  891.6  5.0  4.2  4.4 
General and administrative expenses 95.9  170.0  (74.1) 1.3  2.5  282.5  363.9  (81.4) 1.3  1.8 
Restructuring and impairments 174.3  3.1  171.2  2.4  —  219.6  24.5  195.1  1.0  0.1 
Total operating expenses 6,386.2  6,008.3  377.9  86.4  86.7  19,013.6  17,623.4  1,390.2  88.2  86.1 

Operating income $ 1,008.9   $ 918.7   $ 90.2   13.6   % 13.3   % $ 2,555.8   $ 2,848.3   $ (292.5) 11.8   % 13.9   %
Store operating expenses as a % of company-operated stores revenue
56.1  % 56.5  % 57.3  % 56.4  %

For the quarter ended June 28, 2026, compared with the quarter ended June 29, 2025
Revenues
North America total net revenues for the third quarter of fiscal 2026 increased $468 million, or 7%, primarily driven by an increase in company-operated stores revenue due to a 8.1% increase in comparable store sales ($486 million), driven by a 4.5% increase in comparable transactions and a 3.5% increase in average ticket, primarily due to higher delivery sales and strength in customer food attach and beverage modifications.
Operating Margin
North America operating income for the third quarter of fiscal 2026 increased 10% to $1.0 billion, compared to $919 million in the third quarter of fiscal 2025. Operating margin expanded 30 basis points to 13.6%, primarily driven by sales leverage (approximately 340 basis points), lapping of the Leadership Experience 2025 (approximately 120 basis points), and lower inflation paired with tariff refunds (approximately 110 basis points). This was partially offset by higher restructuring costs (approximately 240 basis points), labor investments largely in support of “Back to Starbucks” (approximately 190 basis points) and product mix shift (approximately 100 basis points).
45

Table of Conten t s

For the three quarters ended June 28, 2026, compared with the three quarters ended June 29, 2025
Revenues
North America total net revenues for the first three quarters of fiscal 2026 increased $1.1 billion, or 5%, primarily driven by an increase in company-operated stores revenue due to a 6.2% increase in comparable store sales ($1.1 billion), driven by a 3.9% increase in comparable transactions and a 2.3% increase in average ticket, primarily due to higher delivery sales, and strength in customer beverage modifications and food attach.
Operating Margin
North America operating income for the first three quarters of fiscal 2026 decreased 10% to $2.6 billion, compared to $2.8 billion in the first three quarters of fiscal 2025. Operating margin contracted 210 basis points to 11.8%, primarily driven by labor investments largely in support of “Back to Starbucks” (approximately 240 basis points).
46

Table of Conten t s

International

  Quarter Ended Three Quarters Ended
  Jun 28,
2026 Jun 29,
2025 $
Change
Jun 28,
2026 Jun 29,
2025 Jun 28,
2026 Jun 29,
2025 $
Change
Jun 28,
2026 Jun 29,
2025
As a % of International
Total Net Revenues As a % of International
Total Net Revenues
Net revenues:
Company-operated stores $ 751.3  $ 1,526.8  $ (775.5) 56.8  % 75.9  % $ 3,835.6  $ 4,367.6  $ (532.0) 70.5  % 76.0  %
Licensed stores 561.4  465.1  96.3  42.4  23.1  1,529.0  1,303.8  225.2  28.1  22.7 
Other 9.9  18.8  (8.9) 0.7  0.9  74.0  77.7  (3.7) 1.4  1.4 
Total net revenues 1,322.6   2,010.7   (688.1) 100.0   100.0   5,438.6   5,749.1   (310.5) 100.0   100.0  
Product and distribution costs 513.4  701.7  (188.3) 38.8  34.9  2,011.3  2,008.4  2.9  37.0  34.9 
Store operating expenses 408.1  792.4  (384.3) 30.9  39.4  1,892.0  2,281.4  (389.4) 34.8  39.7 
Other operating expenses 57.8  66.2  (8.4) 4.4  3.3  170.0  181.8  (11.8) 3.1  3.2 
Depreciation and amortization expenses 33.1  91.4  (58.3) 2.5  4.5  135.8  269.5  (133.7) 2.5  4.7 
General and administrative expenses 39.1  81.9  (42.8) 3.0  4.1  224.1  259.1  (35.0) 4.1  4.5 
Restructuring and impairments 41.1  3.1  38.0  3.1  0.2  93.4  19.9  73.5  1.7  0.3 
Total operating expenses 1,092.6  1,736.7  (644.1) 82.6  86.4  4,526.6  5,020.1  (493.5) 83.2  87.3 
Income/(loss) from equity investees
22.8  (1.3) 24.1  1.7  (0.1) 22.2  (2.1) 24.3  0.4  0.0 
Operating income $ 252.8   $ 272.7   $ (19.9) 19.1   % 13.6   % $ 934.2   $ 726.9   $ 207.3   17.2   % 12.6   %
Store operating expenses as a % of company-operated stores revenue 54.3  % 51.9  % 49.3  % 52.2  %

For the quarter ended June 28, 2026, compared with the quarter ended June 29, 2025
Revenues
International total net revenues for the third quarter of fiscal 2026 decreased $688 million, or 34%, primarily driven by lower company-operated store revenues following the conversion of Starbucks retail operations in China to our licensed joint venture model in the third quarter of fiscal 2026 ($780 million). This decrease was partially offset by higher product sales to, and royalty revenues from, our newly-formed China joint venture ($53 million) and other licensees ($50 million).
Operating Margin
International operating income for the third quarter of fiscal 2026 decreased 7% to $253 million, compared to $273 million in the third quarter of fiscal 2025. Operating margin expanded 550 basis points to 19.1%, primarily due to the conversion of Starbucks retail operations in China to our licensed joint venture model in the third quarter of fiscal 2026 (approximately 800 basis points). This was partially offset by higher restructuring costs (approximately 290 basis points).
47

Table of Conten t s

For the three quarters ended June 28, 2026, compared with the three quarters ended June 29, 2025
Revenues
International total net revenues for the first three quarters of fiscal 2026 decreased $311 million, or 5%, primarily driven by lower company-operated store revenues following the conversion of Starbucks retail operations in China to our licensed joint venture model in the third quarter of fiscal 2026 ($730 million). This decline was partially offset by higher product sales to, and royalty revenues from, existing licensees ($182 million) and our newly-formed China joint venture ($53 million) and an increase in company-operated stores revenue due to a 4.3% increase in comparable store sales ($146 million), driven by a 2.5% increase in comparable transactions and a 1.7% increase in average ticket.
Operating Margin
International operating income for the first three quarters of fiscal 2026 increased 29% to $934 million, compared to $727 million in the first three quarters of fiscal 2025. Operating margin expanded 460 basis points to 17.2%, primarily due to the conversion of Starbucks retail operations in China to our licensed joint venture model in the third quarter of fiscal 2026 (approximately 350 basis points) and lower store operating and depreciation and amortization costs after classifying assets for Starbucks retail operations in China as held for sale in the first and second quarters of fiscal 2026 (approximately 280 basis points), partially offset by higher restructuring costs (approximately 140 basis points).
48

Table of Conten t s

Channel Development 

Quarter Ended Three Quarters Ended
  Jun 28,
2026 Jun 29,
2025 $
Change
Jun 28,
2026 Jun 29,
2025 Jun 28,
2026 Jun 29,
2025 $
Change Jun 28,
2026 Jun 29,
2025
As a % of Channel Development
Total Net Revenues As a % of Channel Development
Total Net Revenues
Net revenues $ 587.9  $ 483.8  $ 104.1  $ 1,678.4  $ 1,329.0  $ 349.4 
Product and distribution costs 320.9  306.8  14.1  54.6  % 63.4  % 1,043.9  824.4  219.5  62.2  % 62.0  %
Other operating expenses 16.0  15.1  0.9  2.7  3.1  47.5  43.7  3.8  2.8  3.3 

General and administrative expenses 0.8  1.7  (0.9) 0.1  0.4  2.8  4.8  (2.0) 0.2  0.4 
Restructuring and impairments (0.2) 0.2  (0.4) 0.0  —  —  1.1  (1.1) 0.0  0.1 
Total operating expenses 337.5  323.8  13.7  57.4  66.9  1,094.2  874.0  220.2  65.2  65.8 
Income from equity investees 55.8  58.4  (2.6) 9.5  12.1  167.7  164.8  2.9  10.0  12.4 

Operating income $ 306.2   $ 218.4   $ 87.8   52.1   % 45.1   % $ 751.9   $ 619.8   $ 132.1   44.8   % 46.6   %

For the quarter ended June 28, 2026, compared with the quarter ended June 29, 2025
Revenues
Channel Development total net revenues for the third quarter of fiscal 2026 increased $104 million, or 22%, primarily due to an increase in revenue in the Global Coffee Alliance ($89 million).
Operating Margin
Channel Development operating income for the third quarter of fiscal 2026 increased 40% to $306 million, compared to $218 million in the third quarter of fiscal 2025. Operating margin expanded 700 basis points to 52.1%, primarily driven by tariff impacts including refunds (approximately 1,370 basis points). This was partially offset by product mix shifts (approximately 470 basis points) and lower income from the North American Coffee Partnership joint venture relative to segment revenue growth (approximately 260 basis points).
For the three quarters ended June 28, 2026, compared with the three quarters ended June 29, 2025
Revenues
Channel Development total net revenues for the first three quarters of fiscal 2026 increased $349 million, or 26%, primarily due to an increase in revenue in the Global Coffee Alliance ($311 million).
Operating Margin
Channel Development operating income for the first three quarters of fiscal 2026 increased 21% to $752 million, compared to $620 million in the first three quarters of fiscal 2025. Operating margin contracted 180 basis points to 44.8%, primarily driven by lower North American Coffee Partnership joint venture income growth relative to segment revenue growth (approximately 240 basis points).
49

Table of Conten t s

Corporate and Other
  Quarter Ended Three Quarters Ended
Jun 28,
2026 Jun 29,
2025 $
Change
%
Change
Jun 28,
2026 Jun 29,
2025 $
Change
%
Change

Net revenues:

Other $ 17.1  $ 34.5  $ (17.4) (50.4) % $ 82.9  $ 65.6  $ 17.3  26.4  %
Total net revenues 17.1   34.5   (17.4) (50.4) 82.9   65.6   17.3   26.4  
Product and distribution costs 22.4  37.4  (15.0) (40.1) 79.3  69.7  9.6  13.8 

Other operating expenses 1.6  0.6  1.0  166.7  3.7  0.7  3.0  428.6 
Depreciation and amortization expenses 30.2  32.7  (2.5) (7.6) 93.4  92.9  0.5  0.5 
General and administrative expenses 463.0  423.6  39.4  9.3  1,346.3  1,347.4  (1.1) (0.1)
Restructuring and impairments 87.4  14.4  73.0  506.9  102.8  91.5  11.3  12.3 
Total operating expenses 604.6  508.7  95.9  18.9  1,625.5  1,602.2  23.3  1.5 

Operating loss $ (587.5) $ (474.2) $ (113.3) 23.9   % $ (1,542.6) $ (1,536.6) $ (6.0) 0.4   %

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.
For the quarter ended June 28, 2026, compared with the quarter ended June 29, 2025
Corporate and Other operating loss increased 24% to $588 million for the third quarter of fiscal 2026 compared to $474 million for the third quarter of fiscal 2025, primarily due to higher restructuring costs in support of our “Back to Starbucks” strategy ($73 million), performance-based compensation ($58 million) and transaction-related expenses for the conversion of Starbucks retail operations in China to our licensed joint venture model in the third quarter of fiscal 2026 ($44 million). The increases are partially offset by restructuring-related savings ($53 million).
For the three quarters ended June 28, 2026, compared with the three quarters ended June 29, 2025
Corporate and Other operating loss increased $6 million during the first three quarters of fiscal 2026 compared to the first three quarters of fiscal 2025, primarily due to performance-based compensation ($78 million), transaction-related expenses for the conversion of Starbucks retail operations in China to our licensed joint venture model in the third quarter of fiscal 2026 ($68 million) and higher restructuring costs in support of our “Back to Starbucks” strategy ($11 million). The increases are offset by restructuring-related savings ($164 million).
50

Table of Conten t s

Quarterly Store Data
Our store data for the periods presented is as follows:
  Net stores opened/(closed) and transferred during the period (1)
   
  Quarter Ended Three Quarters Ended Stores open as of
Jun 28,
2026 Jun 29,
2025 Jun 28,
2026 Jun 29,
2025 Jun 28,
2026 Jun 29,
2025
North America
Company-operated stores 27  122  131  292  11,149  11,453 
Licensed stores (41) (15) (71) 18  7,222  7,281 
Total North America (14) 107  60  310  18,371  18,734 
International
Company-operated stores (2)(3)
(7,971) 103  (8,032) 420  2,464  10,277 
Licensed stores (2)(3)
8,160  98  8,286  168  20,469  12,086 
Total International 189  201  254  588  22,933  22,363 

Total Company 175   308   314   898   41,304   41,097  

(1) Includes 20 and 247 stores closed in the quarter and three quarters ended June 28, 2026, respectively, as part of our “Back to Starbucks” fourth quarter of fiscal 2025 restructuring plan.
(2) Includes the conversion of 113 licensed stores to company-operated stores following the acquisition of 23.5 Degrees Topco Limited during the first quarter of fiscal 2025.
(3) Includes the conversion of 7,991 company-operated stores to licensed stores following the the conversion of Starbucks retail operations in China to our licensed joint venture model in the third quarter of fiscal 2026.

Financial Condition, Liquidity, and Capital Resources
Cash and Investment Overview
Our cash and investments were $3.9 billion as of June 28, 2026, and $3.7 billion as of September 28, 2025. 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 of June 28, 2026, approximately $1.1 billion of cash and short-term investments were held in foreign subsidiaries.
Borrowing Capacity
Credit Facilities and Commercial Paper
Revolving Credit Facility
Our $3.0 billion unsecured five-year revolving credit facility (the “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 June 28, 2026, we were in
51

Table of Conten t s

compliance with all applicable covenants. No amounts were outstanding under our 2025 credit facility as of June 28, 2026, or September 28, 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. We had no borrowings outstanding under our commercial paper program as of June 28, 2026 and September 28, 2025. Our total available contractual borrowing capacity for general corporate purposes was $3.0 billion as of the end of our third quarter of fiscal 2026.
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 $30.9 million, credit facility is currently set to mature on December 30, 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 0.400%.
• A ¥10.0 billion, or $61.8 million, credit facility is currently set to mature on March 27, 2027. 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 June 28, 2026, and September 28, 2025, we had no borrowings outstanding under these credit facilities.
See Note 8, Debt, to the consolidated financial statements included in Item 1 of Part I of this 10-Q for details of the components of our long-term debt.
Long-term Debt
In May 2026, the Company completed cash tender offers for certain series of its senior notes and repurchased approximately $1.3 billion aggregate principal amount of such notes using cash proceeds from the divestiture of Starbucks retail operations in China. The notes repurchased consisted of:
• $273.5 million of the $750.0 million, 4.500% Senior Notes (the “May 2028 notes”)
• $321.8 million of the $500.0 million, 4.800% Senior Notes (the “May 2030 notes”)
• $110.4 million of the $500.0 million, 5.000% Senior Notes (the “February 2034 notes”)
• $410.2 million of the $500.0 million, 5.400% Senior Notes (the “May 2035 notes”)
• $200.0 million of the $1.0 billion, 4.500% Senior Notes (the “November 2048 notes”)
In connection with the redemptions, the Company recognized an immaterial gain on partial extinguishment of debt for the quarter ended June 28, 2026, which is included in Interest income and other, net in the consolidated statement of earnings. In determining the value of the gain, the Company expensed the proportional amount of the related unamortized discount, premium, and debt issuance costs attributable to the repurchased notes.
See Note 8, Debt, to the consolidated financial statements included in Item 1 of Part I of this 10-Q for details of the components of our long-term debt.
Our ability to incur new liens and conduct sale and leaseback transactions on certain material properties is subject to compliance with terms of the indentures under which the long-term notes were issued. As of June 28, 2026, 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
52

Table of Conten t s

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. In the third quarter of fiscal 2026 we used a portion of the proceeds from our divestiture of Starbucks retail operations in China for debt reduction, strengthening our balance sheet and allowing us to execute our long-term growth strategy with greater financial flexibility.
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. In the first quarter of fiscal 2026, we released all of our remaining indefinite reinvestment assertions and recorded a discrete tax expense of $266 million, which was subsequently increased in the second quarter of fiscal 2026 by $8 million. In the third quarter of fiscal 2026, we recorded incremental income tax expense of $147.8 million, as a component of the estimated annual effective tax rate, in connection with our divestiture of Starbucks retail operations in China in the third quarter of fiscal 2026 and the retained equity interest in the joint venture. In future periods, any foreign earnings may be repatriated at management’s discretion without any material, incremental tax consequences.
On February 20, 2026, the U.S. Supreme Court ruled that reciprocal tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were unlawful. Starbucks imports were previously subject to such tariffs under IEEPA. Effective April 20, 2026, the U.S. Customs and Border Protection launched a platform for importers of record to begin submitting IEEPA tariff refund requests. Starbucks submitted refund requests in the third quarter of fiscal 2026 for qualifying tariffs paid and has received substantially all of the refunds requested, which were recorded in product and distribution costs within the consolidated statements of earnings. The refunds received during the third quarter of fiscal 2026 largely offset related tariffs incurred in the first three quarters of fiscal 2026.
During the third quarter of fiscal 2026, our Board of Directors approved a quarterly cash dividend to shareholders of $0.62 per share to be paid on August 28, 2026, to shareholders of record as of the close of business on August 14, 2026.
During the three quarters ended June 28, 2026, we made no common stock share repurchases. As of June 28, 2026, 29.8 million shares of common stock remained available for repurchase under current authorizations.
Other than normal operating expenses, cash requirements for the remainder of fiscal 2026 are expected to consist primarily of capital expenditures for investments in our new and existing stores, our supply chain, and corporate facilities. Total capital expenditures for fiscal 2026 are expected to be lower than fiscal 2025.
In the MD&A included in the 10-K, we disclosed that we had $36.5 billion of current and long-term material cash requirements as of September 28, 2025. Aside from the impacts of our debt repayments and the divestiture of our retail operations in China, there have been no material changes to our material cash requirements during the period covered by this 10-Q outside of the normal course of our business. See Note 8, Debt, and N ote 2 , Acquisitions and Divestitures, in the consolidated financial statements included in Item 1 of Part I of this 10-Q for further discussions.
Cash Flows
Cash provided by operating activities was $3.6 billion for the first three quarters of fiscal 2026, compared to $3.4 billion for the same period in fiscal 2025. The increase of $238.4 million was primarily due to higher net earnings of $125.5 million and favorable changes in working capital.
Cash provided by investing activities totaled $1.6 billion for the first three quarters of fiscal 2026, compared to cash used of $2.1 billion for the same period in fiscal 2025. The $3.7 billion favorable change was primarily due to net proceeds of $2.5 billion from the divestiture of Starbucks retail operations in China in the third quarter of fiscal 2026, combined with the $1.0 billion in lower capital expenditures, driven by lower new store investments and retail renovations in North America and China.
Cash used in financing activities for the first three quarters of fiscal 2026 totaled $4.9 billion, compared to $0.4 billion for the same period in fiscal 2025. The $4.6 billion increase in cash used was primarily due to $2.8 billion in long-term debt
53

Table of Conten t s

repayments funded in part by proceeds from the divestiture of Starbucks retail operations in China, combined with the absence of new debt issuances in fiscal 2026 compared to the $1.7 billion raised in fiscal 2025.

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 Part 1, Item 1 of the 10-K, as well as Risk Factors in Part I, Item 1A of the 10-K.

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

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

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

Item 3. Quantitative and Qualitative Disclosures About Market Risk
There has been no material change in the commodity price risk, foreign currency exchange risk, equity security price risk, or interest rate risk discussed in Item 7A of the 10-K.

Item 4. Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that material information required to be disclosed in our periodic reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Our disclosure controls and procedures are also designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
During the third quarter of fiscal 2026, we carried out an evaluation, under the supervision and with the participation of our management, including our chief executive officer and our chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based upon that evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective, as of the end of the period covered by this report (June 28, 2026).
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during our most recently completed fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

54

Table of Conten t s

PART II — OTHER INFORMATION

Item 1. Legal Proceedings
See Note 15 , Commitments and Contingencies, to the consolidated financial statements included in Item 1 of Part I of this 10-Q for information regarding certain legal proceedings in which we are involved.

Item 1A. Risk Factors
In addition to the other information set forth in this 10-Q, you should carefully consider the risks and uncertainties discussed in Part I, Item 1A. Risk Factors in our 10-K. There have been no material changes to the risk factors disclosed in our 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Shares under our ongoing share repurchase program may be repurchased in open market transactions, including pursuant to a trading plan adopted in accordance with Rule 10b5-1 of the Exchange Act, or through privately negotiated transactions. The timing, manner, price, and amount of repurchases will be determined at our discretion and the share repurchase program may be suspended, terminated, or modified at any time for any reason. During the third fiscal quarter ended June 28, 2026, there was no share repurchase activity.

Item 3. Defaults upon Senior Securities
None.

Item 4. Mine Safety Disclosures
Not applicable.

Item 5. Other Information

Insider Adoption or Termination of Trading Arrangements:

During the fiscal quarter ended June 28, 2026, none of our directors or officers informed us of the adoption or termination of a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Regulation S-K, Item 408.
55

Table of Conten t s

Item 6. Exhibits

    Incorporated by Reference  
Exhibit
No.
Exhibit Description Form File No. Date of
Filing
Exhibit Number Filed
Herewith

3.1
Restated Articles of Incorporation of Starbucks Corporation
10-Q 000-20322 4/28/2015 3.1
3.2
Amended and Restated Bylaws of Starbucks Corporation (As amended and restated through June 25, 2025)
8-K 000-20322 6/30/2025 3.1
31.1
Certification of Principal Executive Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
— — — — X
31.2
Certification of Principal Financial Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
— — — — X
32*
Certifications of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
— — — — —
101 The following financial statements from the Company’s 10-Q for the fiscal quarter ended June 28, 2026, formatted in iXBRL: (i) Consolidated Statements of Earnings, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Cash Flows, (v) Consolidated Statements of Equity, and (vi) Notes to Consolidated Financial Statements
— — — — X
104 Cover Page Interactive Data File (formatted in iXBRL and contained in Exhibit 101) — — — — X

* Furnished herewith.

56

Table of Conten t s

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
July 29, 2026
 
STARBUCKS CORPORATION

By: /s/ Cathy R. Smith

Cathy R. Smith

executive vice president, chief financial officer
Signing on behalf of the registrant and as
principal financial officer

By: /s/ Val Bauduin
Val Bauduin
senior vice president, Corporate Finance and Development
Signing on behalf of the registrant and as
principal accounting officer

57