What changed in this filing

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Item 1. Financial Statements

2023-08-01 compared with 2023-05-02 · 101 added, 124 removed, 688 unchanged (25% of the section changed)

3 unchanged sentences

(in millions, except per share data)

Quarter Ended Two Quarters Ended

Quarter Ended Three Quarters Ended

Net revenues:

29 unchanged sentences

(in millions, unaudited)

Quarter Ended Two Quarters Ended

Quarter Ended Three Quarters Ended

Net earnings including noncontrolling interests $ 1,141.9 $ 913.7 $ 2,905.4 $ 2,404.8

63 unchanged sentences

(in millions, unaudited)

Two Quarters Ended

Three Quarters Ended

OPERATING ACTIVITIES:

37 unchanged sentences

Other ( 11.0 ) ( 9.2 )

Net cash provided by/(used in) financing activities ( 1,283.4 ) ( 3,708.8 )

Net cash used in financing activities ( 2,112.9 ) ( 5,073.2 )

Effect of exchange rate changes on cash and cash equivalents ( 6.0 ) ( 126.3 )

10 unchanged sentences

CONSOLIDATED STATEMENTS OF EQUITY

For the Quarter Ended April 2, 2023 and April 3, 2022

For the Quarter Ended July 2, 2023 and July 3, 2022

(in millions, except per share data, unaudited)

6 unchanged sentences

Shares Amount

Balance, January 1, 2023

Balance, April 2, 2023

1,147.0 $ 1.1 $ 38.2 $ ( 8,024.6 ) $ ( 521.6 ) $ ( 8,506.9 ) $ 7.5 $ ( 8,499.4 )

7 unchanged sentences

— — — ( 606.5 ) — ( 606.5 ) — ( 606.5 )

Purchase of noncontrolling interests — — ( 3.0 ) — — ( 3.0 ) ( 0.4 ) ( 3.4 )

Balance, April 2, 2023

Purchase of non-controlling interests and other

— — — — ( 0.7 ) ( 0.7 ) — ( 0.7 )

Balance, January 2, 2022

Balance, July 2, 2023

1,145.4 $ 1.1 $ 38.3 $ ( 7,610.5 ) $ ( 777.5 ) $ ( 8,348.6 ) $ 7.0 $ ( 8,341.6 )

Balance, April 3, 2022

1,146.9 $ 1.1 $ 41.1 $ ( 9,070.5 ) $ 260.3 $ ( 8,768.0 ) $ 6.8 $ ( 8,761.2 )

Net earnings — — — 912.9 — 912.9 0.8 913.7

Other comprehensive income — — — — 6.8 6.8 — 6.8

Other comprehensive loss — — — — ( 325.3 ) ( 325.3 ) — ( 325.3 )

Stock-based compensation expense — — 58.2 — — 58.2 — 58.2

1 unchanged sentence

Sale of common stock 0.2 — 12.0 — — 12.0 — 12.0

Repurchase of common stock ( 5.2 ) — ( 61.0 ) ( 431.1 ) — ( 492.1 ) — ( 492.1 )

Cash dividends declared, $ 0.49 per share

— — — ( 562.1 ) — ( 562.1 ) — ( 562.1 )

Net distributions to noncontrolling interests — — — — — — ( 0.6 ) ( 0.6 )

Balance, April 3, 2022

Balance, July 3, 2022

1,147.3 $ 1.1 $ 117.1 $ ( 8,719.7 ) $ ( 65.0 ) $ ( 8,666.5 ) $ 7.6 $ ( 8,658.9 )

2 unchanged sentences

CONSOLIDATED STATEMENTS OF EQUITY

For the Two Quarters Ended April 2, 2023 and April 3, 2022

For the Three Quarters Ended July 2, 2023 and July 3, 2022

(in millions, except per share data, unaudited)

16 unchanged sentences

— — — ( 1,823.4 ) — ( 1,823.4 ) — ( 1,823.4 )

Purchase of noncontrolling interests — — ( 3.0 ) — — ( 3.0 ) ( 0.4 ) ( 3.4 )

Balance, April 2, 2023

Purchase of noncontrolling interests and other — — ( 3.0 ) — ( 0.7 ) ( 3.7 ) ( 0.4 ) ( 4.1 )

Balance, July 2, 2023

1,145.4 $ 1.1 $ 38.3 $ ( 7,610.5 ) $ ( 777.5 ) $ ( 8,348.6 ) $ 7.0 $ ( 8,341.6 )

2 unchanged sentences

Net earnings — — — 2,403.3 — 2,403.3 1.5 2,404.8

Other comprehensive income — — — — 113.1 113.1 — 113.1

Other comprehensive loss — — — — ( 212.2 ) ( 212.2 ) — ( 212.2 )

Stock-based compensation expense — — 209.7 — — 209.7 — 209.7

5 unchanged sentences

Net distributions to noncontrolling interests — — — — — — ( 0.6 ) ( 0.6 )

Balance, April 3, 2022

Balance, July 3, 2022

1,147.3 $ 1.1 $ 117.1 $ ( 8,719.7 ) $ ( 65.0 ) $ ( 8,666.5 ) $ 7.6 $ ( 8,658.9 )

20 unchanged sentences

Financial Statement Preparation

The unaudited consolidated financial statements as of April 2, 2023, and for the quarters and two quarters ended April 2, 2023 and April 3, 2022, have been prepared by Starbucks Corporation under the rules and regulations of the Securities and Exchange Commission (“SEC”).

In the opinion of management, the financial information for the quarters and two quarters ended April 2, 2023 and April 3, 2022 reflects all adjustments and accruals, which are of a normal recurring nature, necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods.

The unaudited consolidated financial statements as of July 2, 2023, and for the quarters and three quarters ended July 2, 2023 and July 3, 2022, have been prepared by Starbucks Corporation under the rules and regulations of the Securities and Exchange Commission (“SEC”).

In the opinion of management, the financial information for the quarters and three quarters ended July 2, 2023 and July 3, 2022 reflects all adjustments and accruals, which are of a normal recurring nature, necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods.

In this Quarterly Report on Form 10-Q (“10-Q”), Starbucks Corporation is referred to as “Starbucks,” the “Company,” “we,” “us” or “our.”

Segment information is prepared on the same basis that our management reviews financial information for operational decision-making purposes.

Certain prior period information on the consolidated statements of cash flows have been reclassified to conform to the current presentation.

The financial information as of October 2, 2022 is derived from our audited consolidated financial statements and notes for the fiscal year ended October 2, 2022 (“fiscal 2022”) included in Item 8 in the Fiscal 2022 Annual Report on Form 10-K (“10-K”).

The information included in this 10-Q should be read in conjunction with the footnotes and management’s discussion and analysis of the consolidated financial statements in the 10-K.

The results of operations for the quarter and two quarters ended April 2, 2023 are not necessarily indicative of the results of operations that may be achieved for the entire fiscal year ending October 1, 2023 (“fiscal 2023”).

The results of operations for the quarter and three quarters ended July 2, 2023 are not necessarily indicative of the results of operations that may be achieved for the entire fiscal year ending October 1, 2023 (“fiscal 2023”).

The novel coronavirus, known as the global COVID-19 pandemic, was first identified in December 2019 before spreading to markets where we have company-operated or licensed stores.

We have since established the necessary protocols to operate safely, and in many of our markets, our businesses demonstrated powerful momentum beyond recovery from the COVID-19 pandemic.

During the quarter ended April 2, 2023, our China market began recovering from pandemic-related business interruptions in previous quarters that had suppressed customer mobility.

During the quarter ended July 2, 2023, our China market continued its recovery from pandemic-related business interruptions in previous quarters that had suppressed customer mobility.

We continue to monitor the COVID-19 pandemic and its effect on our business and results of operations;

4 unchanged sentences

We believe the company-operated market investments in partner wages and trainings have increased retention and productivity while the acceleration of purpose-built store concepts and innovations in technologies will provide additional convenience and connection with our customers.

As a result of the restructuring efforts in connection with the Reinvention Plan, we recorded an immaterial charge on our consolidated statements of earnings during the quarter and two quarters ended April 2, 2023.

Future restructuring and impairment costs attributable to our Reinvention Plan are not expected to be material.

As of April 2, 2023 and October 2, 2022, there were no material restructuring-related accrued liabilities on our consolidated balance sheets.

As of July 2, 2023 and October 2, 2022, there were no material restructuring-related accrued liabilities on our consolidated balance sheets.

Recently Adopted Accounting Pronouncements

41 unchanged sentences

Net Gains/(Losses) Expected to be Reclassified from AOCI into Earnings within 12 Months Outstanding Contract/Debt Remaining Maturity

Apr 2, 2023 Oct 2, 2022

Jul 2, 2023 Oct 2, 2022

Cash Flow Hedges:

14 unchanged sentences

Location of gain/(loss)

Apr 2, 2023 Apr 3, 2022 Apr 2, 2023 Apr 3, 2022

Jul 2, 2023 Jul 3, 2022 Jul 2, 2023 Jul 3, 2022

Cash Flow Hedges:

9 unchanged sentences

Foreign currency debt 53.4 72.2 — —

Two Quarters Ended

Three Quarters Ended

Gains/(Losses) Recognized in

1 unchanged sentence

AOCI to Earnings Location of gain/(loss)

Apr 2, 2023 Apr 3, 2022 Apr 2, 2023 Apr 3, 2022

Jul 2, 2023 Jul 3, 2022 Jul 2, 2023 Jul 3, 2022

Cash Flow Hedges:

12 unchanged sentences

Gains/(Losses) Recognized in Earnings

Location of gain/(loss) recognized in earnings Quarter Ended Two Quarters Ended

Apr 2, 2023 Apr 3, 2022 Apr 2, 2023 Apr 3, 2022

Location of gain/(loss) recognized in earnings Quarter Ended Three Quarters Ended

Jul 2, 2023 Jul 3, 2022 Jul 2, 2023 Jul 3, 2022

Non-Designated Derivatives:

7 unchanged sentences

Notional amounts of outstanding derivative contracts (in millions) :

Apr 2, 2023 Oct 2, 2022

Jul 2, 2023 Oct 2, 2022

Coffee $ 373 $ 649

5 unchanged sentences

Derivative Assets

Balance Sheet Location Apr 2, 2023 Oct 2, 2022

Balance Sheet Location Jul 2, 2023 Oct 2, 2022

Designated Derivative Instruments:

8 unchanged sentences

Derivative Liabilities

Balance Sheet Location Apr 2, 2023 Oct 2, 2022

Balance Sheet Location Jul 2, 2023 Oct 2, 2022

Designated Derivative Instruments:

Cross-currency swaps Other long-term liabilities $ 8.8 $ —

Dairy Accrued liabilities $ 3.0 $ 2.9

8 unchanged sentences

Carrying amount of hedged item Cumulative amount of fair value hedging adjustment included in the carrying amount

Apr 2, 2023 Oct 2, 2022 Apr 2, 2023 Oct 2, 2022

Jul 2, 2023 Oct 2, 2022 Jul 2, 2023 Oct 2, 2022

Location on the balance sheet

4 unchanged sentences

Fair Value Measurements at Reporting Date Using

April 2, 2023 Quoted Prices in Active Markets for Identical Assets

July 2, 2023 Quoted Prices in Active Markets for Identical Assets

(Level 1) Significant Other Observable Inputs

3 unchanged sentences

Available-for-sale debt securities

Commercial paper 0.1 — 0.1 —

Corporate debt securities 68.4 — 68.4 —

1 unchanged sentence

Foreign government obligations 3.9 — 3.9 —

Mortgage and other asset-backed securities 0.7 — 0.7 —

Total available-for-sale debt securities 79.2 6.9 72.3 —

53 unchanged sentences

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.

Gross unrealized holding gains and losses on available-for-sale debt securities, structured deposits and marketable equity securities were not material as of April 2, 2023 and October 2, 2022.

Gross unrealized holding gains and losses on available-for-sale debt securities, structured deposits and marketable equity securities were not material as of July 2, 2023 and October 2, 2022.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

2 unchanged sentences

The estimated fair value of our long-term debt based on the quoted market price (Level 2) is included at Note 8 , Debt.

There were no material fair value adjustments during the two quarters ended April 2, 2023 and April 3, 2022.

There were no material fair value adjustments during the three quarters ended July 2, 2023 and July 3, 2022.

Inventories (in millions) :

Apr 2, 2023 Oct 2, 2022

Jul 2, 2023 Oct 2, 2022

Unroasted $ 926.7 $ 1,018.6

5 unchanged sentences

Inventory levels vary due to seasonality, commodity market supply and price fluctuations.

As of April 2, 2023, we had committed to purchasing green coffee totaling $ 408.4 million under fixed-price contracts and an estimated $ 828.3 million under price-to-be-fixed contracts.

As of July 2, 2023, we had committed to purchasing green coffee totaling $ 300.5 million under fixed-price contracts and an estimated $ 786.0 million under price-to-be-fixed contracts.

A portion of our price-to-be-fixed contracts are effectively fixed through the use of futures.

7 unchanged sentences

Property, Plant and Equipment, net

Apr 2, 2023 Oct 2, 2022

Jul 2, 2023 Oct 2, 2022

Land $ 46.1 $ 46.1

9 unchanged sentences

Accrued Liabilities

Apr 2, 2023 Oct 2, 2022

Jul 2, 2023 Oct 2, 2022

Accrued occupancy costs $ 82.3 $ 84.6

6 unchanged sentences

Store Operating Expenses

Quarter Ended Two Quarters Ended

Apr 2, 2023 Apr 3, 2022 Apr 2, 2023 Apr 3, 2022

Quarter Ended Three Quarters Ended

Jul 2, 2023 Jul 3, 2022 Jul 2, 2023 Jul 3, 2022

Wages and benefits $ 2,185.7 $ 1,983.0 $ 6,575.6 $ 6,012.0

4 unchanged sentences

Indefinite-Lived Intangible Assets

(in millions) Apr 2, 2023 Oct 2, 2022

(in millions) Jul 2, 2023 Oct 2, 2022

Trade names, trademarks and patents $ 79.1 $ 97.5

Finite-Lived Intangible Assets

Apr 2, 2023 Oct 2, 2022

Jul 2, 2023 Oct 2, 2022

(in millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount

5 unchanged sentences

Total finite-lived intangible assets $ 1,161.5 $ ( 1,116.2 ) $ 45.3 $ 1,182.1 $ ( 1,123.7 ) $ 58.4

Amortization expense for finite-lived intangible assets was $ 5.3 million and $ 10.9 million for the quarter and two quarters ended April 2, 2023, respectively and $ 49.2 million and $ 99.4 million for the quarter and two quarters ended April 3, 2022, respectively.

Estimated future amortization expense as of April 2, 2023 ( in millions ):

Amortization expense for finite-lived intangible assets was $ 5.4 million and $ 16.4 million for the quarter and three quarters ended July 2, 2023, respectively, and $ 47.6 million and $ 147.0 million for the quarter and three quarters ended July 3, 2022, respectively.

Estimated future amortization expense as of July 2, 2023 ( in millions ):

Fiscal Year Total

2023 (excluding the two quarters ended April 2, 2023)

2023 (excluding the three quarters ended July 2, 2023)

Thereafter 2.9

5 unchanged sentences

0.9 ( 33.5 ) — — ( 32.6 )

Goodwill balance at April 2, 2023

Goodwill balance at July 2, 2023

$ 492.0 $ 2,723.2 $ 34.7 $ 1.0 $ 3,250.9

4 unchanged sentences

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 2021 credit facility bear interest at a variable rate based on LIBOR, and, for U.S.

dollar-denominated loans under certain circumstances, a Base Rate (as defined in the 2021 credit facility), in each case plus an applicable margin.

The applicable margin is based on the Company’s long-term credit ratings assigned by the Moody’s and Standard & Poor’s rating agencies.

The 2021 credit facility contains alternative interest rate provisions specifying rate calculations to be used at such time LIBOR ceases to be available as a benchmark due to reference rate reform.

The “Base Rate” is the highest of (i) the Federal Funds Rate (as defined in the 2021 credit facility) plus 0.500 %, (ii) Bank of America’s prime rate, and (iii) the Eurocurrency Rate (as defined in the 2021 credit facility) plus 1.000 %.

On April 17, 2023, Starbucks amended the 2021 credit facility to replace LIBOR with Term SOFR (Secured Overnight Financing Rate) as a successor rate.

All other material terms and conditions of the 2021 credit facility were unchanged.

Borrowings under the amended 2021 credit facility will bear interest at a variable rate based on Term SOFR, and, for U.S.

Borrowings under the 2021 credit facility, which was most recently amended in April 2023, will bear interest at a variable rate based on Term SOFR, and, for U.S.

dollar-denominated loans under certain circumstances, a Base Rate (as defined in the 2021 credit facility), in each case plus an applicable margin.

3 unchanged sentences

The 2021 credit facility contains provisions requiring us to maintain compliance with certain covenants, including a minimum fixed charge coverage ratio, which measures our ability to cover financing expenses.

As of April 2, 2023, we were in compliance with all applicable covenants.

No amounts were outstanding under our 2021 credit facility as of April 2, 2023 or October 2, 2022.

As of July 2, 2023, we were in compliance with all applicable covenants.

No amounts were outstanding under our 2021 credit facility as of July 2, 2023 or October 2, 2022.

Short-term Debt

2 unchanged sentences

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 April 2, 2023, we had no borrowings outstanding under the program.

As of July 2, 2023, we had no borrowings outstanding under the program.

As of October 2, 2022, we had $ 175.0 million in borrowings outstanding under this program.

4 unchanged sentences

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 April 2, 2023, we had ¥ 7 billion, or $ 52.8 million, of borrowings outstanding under these credit facilities.

As of July 2, 2023, we had ¥ 5 billion, or $ 34.5 million, of borrowings outstanding under these credit facilities.

As of October 2, 2022, we had no borrowings outstanding under these credit facilities.

1 unchanged sentence

Components of long-term debt including the associated interest rates and related estimated fair values by calendar maturity ( in millions, except interest rates) :

Apr 2, 2023 Oct 2, 2022 Stated Interest Rate Effective Interest Rate (1)

Jul 2, 2023 Oct 2, 2022 Stated Interest Rate Effective Interest Rate (1)

Issuance Amount Estimated Fair Value Amount Estimated Fair Value

32 unchanged sentences

Refer to Note 3 , Derivative Financial Instruments, for additional information on our interest rate swaps designated as fair value hedges.

(3) Floating rate notes which bear interest at a rate equal to Compounded SOFR (as defined in the February 2024 notes) plus 0.420 %, resulting in a stated interest rate of 5.147 % at April 2, 2023.

(3) Floating rate notes which bear interest at a rate equal to Compounded SOFR (as defined in the February 2024 notes) plus 0.420 %, resulting in a stated interest rate of 5.600 % at July 2, 2023.

(4) Japanese yen-denominated long-term debt.

The following table summarizes our long-term debt maturities as of April 2, 2023 by fiscal year ( in millions ):

The following table summarizes our long-term debt maturities as of July 2, 2023 by fiscal year ( in millions ):

Fiscal Year Total

2 unchanged sentences

The components of lease costs (in millions) :

Quarter Ended Two Quarters Ended

Apr 2, 2023 Apr 3, 2022 Apr 2, 2023 Apr 3, 2022

Quarter Ended Three Quarters Ended

Jul 2, 2023 Jul 3, 2022 Jul 2, 2023 Jul 3, 2022

Operating lease costs (1)

5 unchanged sentences

The following table includes supplemental information (in millions) :

Two Quarters Ended

Apr 2, 2023 Apr 3, 2022

Three Quarters Ended

Jul 2, 2023 Jul 3, 2022

Cash paid related to operating lease liabilities $ 1,234.8 $ 1,248.7

Operating lease liabilities arising from obtaining ROU assets 1,245.5 1,121.6

Apr 2, 2023 Apr 3, 2022

Jul 2, 2023 Jul 3, 2022

Weighted-average remaining operating lease term 8.5 years 8.5 years

1 unchanged sentence

Finance lease assets are recorded in property, plant and equipment, net with the corresponding lease liabilities included in accrued liabilities and other long-term liabilities on the consolidated balance sheet.

There were no material finance leases as of April 2, 2023 and October 2, 2022.

There were no material finance leases as of July 2, 2023 and October 2, 2022.

Minimum future maturities of operating lease liabilities (in millions) :

Fiscal Year Total

2023 (excluding the two quarters ended April 2, 2023)

2023 (excluding the three quarters ended July 2, 2023)

Thereafter 4,428.2

2 unchanged sentences

Total $ 8,956.4

As of April 2, 2023, we have entered into operating leases that have not yet commenced of $ 1.3 billion, primarily related to real estate leases.

These leases will commence between fiscal year 2023 and fiscal year 2029 with lease terms ranging from three to twenty years.

As of July 2, 2023, we have entered into operating leases that have not yet commenced of $ 1.4 billion, primarily related to real estate leases.

These leases will commence between fiscal year 2023 and fiscal year 2026 with lease terms ranging from two to twenty years.

Deferred Revenue

Our deferred revenue primarily consists of the prepaid royalty from Nestlé, for which we have continuing performance obligations to support the Global Coffee Alliance, our unredeemed stored value card liability and unredeemed loyalty points (“Stars”) associated with our loyalty program.

As of April 2, 2023, the current and long-term deferred revenue related to Nestlé was $ 177.0 million and $ 6.1 billion, respectively.

As of July 2, 2023, the current and long-term deferred revenue related to Nestlé was $ 177.0 million and $ 6.0 billion, respectively.

As of October 2, 2022, the current and long-term deferred revenue related to the Nestlé up-front payment was $ 177.0 million and $ 6.2 billion, respectively.

During the quarter and two quarters ended April 2, 2023, we recognized $ 44.1 million and $ 88.2 million of prepaid royalty revenue related to Nestlé.

During the quarter and two quarters ended April 3, 2022, we recognized $ 44.2 million and $ 88.4 million of prepaid royalty revenue related to Nestlé.

During the quarter and three quarters ended July 2, 2023, we recognized $ 44.1 million and $ 132.3 million of prepaid royalty revenue related to Nestlé.

During the quarter and three quarters ended July 3, 2022, we recognized $ 44.1 million and $ 132.5 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) :

Quarter Ended April 2, 2023

Stored value cards and loyalty program at January 1, 2023

Quarter Ended July 2, 2023

Stored value cards and loyalty program at April 2, 2023

Revenue deferred - card activations, card reloads and Stars earned 3,641.3

Revenue recognized - card and Stars redemptions and breakage ( 3,662.9 )

Stored value cards and loyalty program at July 2, 2023 (2)

Quarter Ended July 3, 2022

Stored value cards and loyalty program at April 3, 2022

Quarter Ended April 3, 2022

Stored value cards and loyalty program at January 2, 2022

Revenue deferred - card activations, card reloads and Stars earned 3,282.6

Revenue recognized - card and Stars redemptions and breakage ( 3,312.3 )

Stored value cards and loyalty program at April 3, 2022 (2)

Two Quarters Ended April 2, 2023

Stored value cards and loyalty program at July 3, 2022 (2)

Three Quarters Ended July 2, 2023

Stored value cards and loyalty program at October 2, 2022

1 unchanged sentence

Revenue recognized - card and Stars redemptions and breakage ( 11,155.4 )

Stored value cards and loyalty program at April 2, 2023 (2)

Two Quarters Ended April 3, 2022

Stored value cards and loyalty program at July 2, 2023 (2)

Three Quarters Ended July 3, 2022

Stored value cards and loyalty program at October 3, 2021

1 unchanged sentence

Revenue recognized - card and Stars redemptions and breakage ( 10,149.4 )

Stored value cards and loyalty program at April 3, 2022 (2)

Stored value cards and loyalty program at July 3, 2022 (2)

(1) “Other” primarily consists of changes in the stored value cards and loyalty program balances resulting from foreign currency translation.

(2) As of April 2, 2023 and April 3, 2022, approximately $ 1.6 billion and $ 1.5 billion of these amounts were current, respectively.

(2) As of July 2, 2023 and July 3, 2022, approximately $ 1.5 billion and $ 1.5 billion of these amounts were current, respectively.

Changes in AOCI by component, net of tax (in millions) :

Quarter Ended Available-for-Sale Debt Securities Cash Flow Hedges Net Investment Hedges Translation Adjustment and Other Total

April 2, 2023

Net gains/(losses) in AOCI, beginning of period $ ( 10.9 ) $ ( 88.1 ) $ 149.6 $ ( 572.2 ) $ ( 521.6 )

2 unchanged sentences

Other comprehensive income/(loss) attributable to Starbucks ( 1.5 ) ( 6.0 ) 69.7 ( 317.4 ) ( 255.2 )

Other comprehensive income/(loss) attributable to NCI — — — ( 0.7 ) ( 0.7 )

Net gains/(losses) in AOCI, end of period $ ( 12.4 ) $ ( 94.1 ) $ 219.3 $ ( 890.3 ) $ ( 777.5 )

April 3, 2022

Net gains/(losses) in AOCI, beginning of period $ ( 9.0 ) $ 251.7 $ 103.0 $ ( 85.4 ) $ 260.3

3 unchanged sentences

Net gains/(losses) in AOCI, end of period $ ( 10.5 ) $ 246.0 $ 181.8 $ ( 482.3 ) $ ( 65.0 )

Two Quarters Ended Available-for-Sale Debt Securities Cash Flow Hedges Net Investment Hedges Translation Adjustment and Other Total

April 2, 2023

Three Quarters Ended Available-for-Sale Debt Securities Cash Flow Hedges Net Investment Hedges Translation Adjustment and Other Total

Net gains/(losses) in AOCI, beginning of period $ ( 15.5 ) $ 199.0 $ 209.1 $ ( 855.8 ) $ ( 463.2 )

2 unchanged sentences

Other comprehensive income/(loss) attributable to Starbucks 3.1 ( 293.1 ) 10.2 ( 33.8 ) ( 313.6 )

Other comprehensive income/(loss) attributable to NCI — — — ( 0.7 ) ( 0.7 )

Net gains/(losses) in AOCI, end of period $ ( 12.4 ) $ ( 94.1 ) $ 219.3 $ ( 890.3 ) $ ( 777.5 )

April 3, 2022

Net gains/(losses) in AOCI, beginning of period $ 1.5 $ 158.3 $ 48.6 $ ( 61.2 ) $ 147.2

7 unchanged sentences

the Statements of Earnings

Apr 2, 2023 Apr 3, 2022

Jul 2, 2023 Jul 3, 2022

Gains/(losses) on available-for-sale debt securities $ ( 0.1 ) $ ( 0.2 ) Interest income and other, net

4 unchanged sentences

$ 12.4 $ 49.4 Net of tax

Two Quarters Ended

Three Quarters Ended

Components Amounts Reclassified from AOCI Affected Line Item in

the Statements of Earnings

Apr 2, 2023 Apr 3, 2022

Jul 2, 2023 Jul 3, 2022

Gains/(losses) on available-for-sale debt securities $ ( 0.5 ) $ ( 0.2 ) Interest income and other, net

4 unchanged sentences

$ 156.1 $ 90.8 Net of tax

In addition to 2.4 billion shares of authorized common stock with $ 0.001 par value per share, the Company has authorized 7.5 million shares of preferred stock, none of which was outstanding as of April 2, 2023.

During the two quarters ended April 2, 2023 and April 3, 2022, we repurchased 4.9 million and 36.3 million shares of common stock for $ 495.3 million and $ 4,013.0 million, respectively.

As of April 2, 2023, 47.7 million shares remained available for repurchase under current authorizations.

During the second quarter of fiscal 2023, our Board of Directors approved a quarterly cash dividend to shareholders of $ 0.53 per share to be paid on May 26, 2023 to shareholders of record as of the close of business on May 12, 2023 .

During the three quarters ended July 2, 2023 and July 3, 2022, we repurchased 6.9 million and 36.3 million shares of common stock for $ 699.3 million and $ 4.0 billion, respectively.

As of July 2, 2023, 45.7 million shares remained available for repurchase under current authorizations.

During the third quarter of fiscal 2023, our Board of Directors approved a quarterly cash dividend to shareholders of $ 0.53 per share to be paid on August 25, 2023 to shareholders of record as of the close of business on August 11, 2023 .

Employee Stock Plans

As of April 2, 2023, there were 92.3 million shares of common stock available for issuance pursuant to future equity-based compensation awards and 10.5 million shares available for issuance under our employee stock purchase plan.

As of July 2, 2023, there were 92.5 million shares of common stock available for issuance pursuant to future equity-based compensation awards and 10.4 million shares available for issuance under our employee stock purchase plan.

Stock-based compensation expense recognized in the consolidated statements of earnings (in millions) :

Quarter Ended Two Quarters Ended

Apr 2, 2023 Apr 3, 2022 Apr 2, 2023 Apr 3, 2022

Quarter Ended Three Quarters Ended

Jul 2, 2023 Jul 3, 2022 Jul 2, 2023 Jul 3, 2022

Restricted Stock Units (“RSUs”) $ 69.1 $ 57.4 $ 228.3 $ 207.2

1 unchanged sentence

Total stock-based compensation expense $ 69.2 $ 57.3 $ 228.5 $ 206.6

Stock option and RSU transactions from October 2, 2022 through April 2, 2023 ( in millions ):

Stock option and RSU transactions from October 2, 2022 through July 2, 2023 ( in millions ):

Stock Options RSUs

3 unchanged sentences

Forfeited/expired 0.0 ( 0.9 )

Options outstanding/Nonvested RSUs, April 2, 2023

Total unrecognized stock-based compensation expense, net of estimated forfeitures, as of April 2, 2023

Options outstanding/Nonvested RSUs, July 2, 2023

Total unrecognized stock-based compensation expense, net of estimated forfeitures, as of July 2, 2023

Earnings per Share

Calculation of net earnings per common share (“EPS”) — basic and diluted ( in millions, except EPS ):

Quarter Ended Two Quarters Ended

Apr 2, 2023 Apr 3, 2022 Apr 2, 2023 Apr 3, 2022

Quarter Ended Three Quarters Ended

Jul 2, 2023 Jul 3, 2022 Jul 2, 2023 Jul 3, 2022

Net earnings attributable to Starbucks $ 1,141.7 $ 912.9 $ 2,905.2 $ 2,403.3

8 unchanged sentences

Legal Proceedings

In 2010 and 2011, an organization named Council for Education and Research on Toxics (“Plaintiff”) filed lawsuits in the Superior Court of the State of California, County of Los Angeles, against the Company and other companies who manufacture, package, distribute or sell brewed coffee.

The suits were later consolidated into a single action.

Plaintiff alleged that the Company and the other defendants failed to provide warnings for their coffee products of exposure to the chemical acrylamide as required under California Health and Safety Code section 25249.5, the California Safe Drinking Water and Toxic Enforcement Act of 1986, better known as Proposition 65.

In 2020, the trial court granted defendants’ motion for summary judgment, which was affirmed by the California Court of Appeal.

The California Supreme Court denied Plaintiff’s petition for review on February 15, 2023, concluding the matter.

Starbucks is involved in various other legal proceedings arising in the ordinary course of business, including 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.

Starbucks is involved in various legal proceedings arising in the ordinary course of business, including 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.

Segment Reporting

1 unchanged sentence

Consolidated revenue mix by product type ( in millions ):

Quarter Ended Two Quarters Ended

Apr 2, 2023 Apr 3, 2022 Apr 2, 2023 Apr 3, 2022

Quarter Ended Three Quarters Ended

Jul 2, 2023 Jul 3, 2022 Jul 2, 2023 Jul 3, 2022

$ 5,587.9 61 % $ 4,944.6 61 % $ 15,988.9 60 % $ 14,442.9 61 %

4 unchanged sentences

(2) Food includes sales within our company-operated stores.

(3) Other primarily consists of packaged and single-serve coffees and teas, royalty and licensing revenues, beverage-related ingredients, serveware and ready-to-drink beverages, among other items.

(3) Other primarily consists of packaged and single-serve coffees and teas, royalty and licensing revenues, beverage-related ingredients and serveware, among other items.

The tables below present financial information for our reportable operating segments and Corporate and Other segment (in millions) :

1 unchanged sentence

North America International Channel Development Corporate and Other Total

April 2, 2023

Total net revenues $ 6,737.8 $ 1,972.9 $ 448.8 $ 8.8 $ 9,168.3

2 unchanged sentences

Operating income/(loss) 1,463.9 374.5 208.0 ( 462.5 ) 1,583.9

April 3, 2022

Total net revenues $ 6,058.4 $ 1,584.7 $ 479.7 $ 27.3 $ 8,150.1

2 unchanged sentences

Operating income/(loss) 1,330.1 135.3 191.7 ( 361.6 ) 1,295.5

Two Quarters Ended

Three Quarters Ended

North America International Channel Development Corporate and Other Total

April 2, 2023

Total net revenues $ 19,669.7 $ 5,507.8 $ 1,407.7 $ 16.8 $ 26,602.0

2 unchanged sentences

Operating income/(loss) 3,894.3 929.6 696.4 ( 1,355.7 ) 4,164.6

April 3, 2022

Total net revenues $ 17,236.4 $ 5,163.1 $ 1,359.9 $ 76.7 $ 23,836.1

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements