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Item 1. Financial Statements

2024-04-30 compared with 2024-01-30 · 216 added, 89 removed, 602 unchanged (34% of the section changed)

2 unchanged sentences

CONSOLIDATED STATEMENTS OF EARNINGS

(in millions, except per share data)

Quarter Ended

(in millions, except per share data, unaudited)

Quarter Ended Two Quarters Ended

Net revenues:

11 unchanged sentences

Income from equity investees 68.0 51.4 123.8 109.2

Gain from sale of assets — 91.3 — 91.3

Operating income 1,098.9 1,327.5 2,584.3 2,580.7

15 unchanged sentences

(in millions, unaudited)

Quarter Ended

Quarter Ended Two Quarters Ended

Net earnings including noncontrolling interests $ 772.5 $ 908.3 $ 1,796.9 $ 1,763.6

17 unchanged sentences

CONSOLIDATED BALANCE SHEETS

(in millions, except per share data)

(in millions, except per share data, unaudited)

Current assets:

44 unchanged sentences

(in millions, unaudited)

Quarter Ended

Two Quarters Ended

OPERATING ACTIVITIES:

5 unchanged sentences

Distributions received from equity method investees 154.5 88.0

Gain on sale of assets — ( 91.3 )

Stock-based compensation 173.0 159.3

16 unchanged sentences

Additions to property, plant and equipment ( 1,255.0 ) ( 1,002.0 )

Proceeds from sale of assets — 110.0

Other ( 36.2 ) ( 39.2 )

4 unchanged sentences

Repayments of short-term debt ( 80.5 ) —

Net proceeds from issuance of long-term debt 1,995.3 1,497.8

Repayments of long-term debt ( 1,825.1 ) ( 1,000.0 )

3 unchanged sentences

Minimum tax withholdings on share-based awards ( 94.1 ) ( 81.4 )

Other ( 10.6 ) ( 10.7 )

Net cash used in financing activities ( 2,423.6 ) ( 1,283.4 )

11 unchanged sentences

CONSOLIDATED STATEMENTS OF EQUITY

For the Quarter Ended December 31, 2023 and January 1, 2023

For the Quarter Ended March 31, 2024 and April 2, 2023

(in millions, except per share data, unaudited)

6 unchanged sentences

Shares Amount

Balance, October 1, 2023

Balance, December 31, 2023

1,132.2 $ 1.1 $ 38.2 $ ( 8,097.5 ) $ ( 557.8 ) $ ( 8,616.0 ) $ 7.1 $ ( 8,608.9 )

Net earnings — — — 772.4 — 772.4 0.1 772.5

Other comprehensive loss — — — — ( 63.6 ) ( 63.6 ) ( 0.1 ) ( 63.7 )

Stock-based compensation expense — — 79.1 — — 79.1 — 79.1

Exercise of stock options/vesting of RSUs 0.3 — 10.9 — — 10.9 — 10.9

Sale of common stock 0.2 — 13.0 — — 13.0 — 13.0

Repurchase of common stock (1)

— — 0.5 0.1 — 0.6 — 0.6

Cash dividends declared, $0.57 per share

— — — ( 645.7 ) — ( 645.7 ) — ( 645.7 )

— — — — ( 0.1 ) ( 0.1 ) 0.1 —

Balance, March 31, 2024

1,132.7 $ 1.1 $ 141.7 $ ( 7,970.7 ) $ ( 621.5 ) $ ( 8,449.4 ) $ 7.2 $ ( 8,442.2 )

Balance, January 1, 2023

1,148.5 $ 1.1 $ 67.2 $ ( 8,203.2 ) $ ( 538.9 ) $ ( 8,673.8 ) $ 7.9 $ ( 8,665.9 )

Net earnings — — — 908.3 — 908.3 — 908.3

Other comprehensive income — — — — 17.3 17.3 — 17.3

5 unchanged sentences

— — — ( 608.2 ) — ( 608.2 ) — ( 608.2 )

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

Balance, April 2, 2023

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

Balance, December 31, 2023

(1) Includes excise tax on share repurchases.

See Notes to Consolidated Financial Statements.

STARBUCKS CORPORATION

CONSOLIDATED STATEMENTS OF EQUITY

For the Two Quarters Ended March 31, 2024 and April 2, 2023

(in millions, except per share data, unaudited)

Common Stock Additional Paid-in Capital Retained

Earnings/(Deficit) Accumulated

Comprehensive

Income/(Loss) Shareholders’

Equity/(Deficit) Noncontrolling

Interests Total

Shares Amount

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 — — — 1,796.8 — 1,796.8 0.1 1,796.9

Other comprehensive income — — — — 156.6 156.6 0.1 156.7

Stock-based compensation expense — — 175.2 — — 175.2 — 175.2

Exercise of stock options/vesting of RSUs 2.6 — ( 64.9 ) — — ( 64.9 ) — ( 64.9 )

Sale of common stock 0.3 — 29.2 — — 29.2 — 29.2

Repurchase of common stock (1)

( 12.8 ) — ( 35.9 ) ( 1,223.9 ) — ( 1,259.8 ) — ( 1,259.8 )

Cash dividends declared, $1.14 per share

— — — ( 1,287.8 ) — ( 1,287.8 ) — ( 1,287.8 )

Other — — — — 0.1 0.1 — 0.1

Balance, March 31, 2024

1,132.7 $ 1.1 $ 141.7 $ ( 7,970.7 ) $ ( 621.5 ) $ ( 8,449.4 ) $ 7.2 $ ( 8,442.2 )

Balance, October 2, 2022

8 unchanged sentences

— — — ( 1,216.9 ) — ( 1,216.9 ) — ( 1,216.9 )

Balance, January 1, 2023

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

Balance, April 2, 2023

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

(1) Includes excise tax on share repurchases.

See Notes to Consolidated Financial Statements.

2 unchanged sentences

Note 1 Summary of Significant Accounting Policies and Estimates

Note 2 Acquisitions, Divestitures , and Strategic Alliance

Note 3 Derivative Financial Instruments

14 unchanged sentences

Financial Statement Preparation

The unaudited consolidated financial statements as of December 31, 2023, and for the quarters ended December 31, 2023 and January 1, 2023, 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 ended December 31, 2023 and January 1, 2023 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 March 31, 2024, and for the quarters and two quarters ended March 31, 2024 and April 2, 2023, 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 March 31, 2024 and April 2, 2023 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 1, 2023 is derived from our audited consolidated financial statements and notes for the fiscal year ended October 1, 2023 (“fiscal 2023”) included in Item 8 in the fiscal 2023 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 ended December 31, 2023 are not necessarily indicative of the results of operations that may be achieved for the entire fiscal year ending September 29, 2024 (“fiscal 2024”).

The results of operations for the quarter and two quarters ended March 31, 2024 are not necessarily indicative of the results of operations that may be achieved for the entire fiscal year ending September 29, 2024 (“fiscal 2024”).

Recent Accounting Pronouncements Not Yet Adopted

In November 2023, the Financial Accounting Standards Board (“FASB”) issued guidance expanding segment disclosure requirements.

The amendments require enhanced disclosure for certain segment items and required disclosure on how management uses reported measures to assess segment performance.

The amendments require enhanced disclosure for certain segment items and require disclosure on how management 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.

We expect to adopt the guidance for the fiscal year ending September 28, 2025.

We are currently evaluating the expanded disclosure requirements and do not expect the adoption of the amendments to have a material impact on our consolidated financial statements.

We are currently evaluating the expanded disclosure requirements and do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

In December 2023, the FASB issued guidance expanding disclosure requirements related to income taxes.

3 unchanged sentences

While we are still evaluating the specific impacts and timing of adoption, we anticipate this guidance will have a significant impact on our annual income tax disclosures.

In March 2024, the SEC issued its final climate disclosure rules, which require the disclosure of climate-related information in annual reports and registration statements.

The rules require disclosure in the audited financial statements of certain effects of severe weather events and other natural conditions above certain financial thresholds, as well as amounts related to carbon offsets and renewable energy credits or certificates, if material.

Disclosure requirements will begin phasing in for fiscal years beginning on or after January 1, 2025.

On April 4, 2024, the SEC determined to voluntarily stay the final rules pending certain legal challenges.

We are currently evaluating the impact of the new rules and expect to include updated climate-related disclosures in our Annual Report on Form 10-K for our fiscal year ending September 27, 2026, depending on the outcome of the legal challenges.

Acquisitions, Divestitures, and Strategic Alliance

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 statements of earnings for the quarter and two quarters ended April 2, 2023.

Results from Seattle’s Best Coffee operations prior to the sale are reported in our Channel Development operating segment.

Derivative Financial Instruments

8 unchanged sentences

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 intercompany royalty payments, inventory purchases, and intercompany borrowing and lending activities.

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 payments, 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.

10 unchanged sentences

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, the related accumulated derivative gains or losses are recognized in interest income and other, net on our consolidated statements of earnings.

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.

6 unchanged sentences

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

Dec 31, 2023 Oct 1, 2023

Mar 31, 2024 Oct 1, 2023

Cash Flow Hedges:

14 unchanged sentences

Location of gain/(loss)

Dec 31, 2023 Jan 1, 2023 Dec 31, 2023 Jan 1, 2023

Mar 31, 2024 Apr 2, 2023 Mar 31, 2024 Apr 2, 2023

Cash Flow Hedges:

5 unchanged sentences

2.2 2.2 Product and distribution costs

Interest rates — 0.3 ( 1.0 ) 0.2 Interest expense

Net Investment Hedges:

Cross-currency swaps (1)

67.0 ( 1.1 ) 10.2 7.0 Interest expense

Foreign currency debt 25.5 ( 1.6 ) — —

Two Quarters Ended

Gains/(Losses) Recognized in

OCI Before Reclassifications Gains/(Losses) Reclassified from

AOCI to Earnings Location of gain/(loss)

Mar 31, 2024 Apr 2, 2023 Mar 31, 2024 Apr 2, 2023

Cash Flow Hedges:

Coffee $ 63.1 $ ( 119.9 ) $ ( 46.6 ) $ 156.6 Product and distribution costs

Cross-currency swaps 2.4 ( 14.2 ) 1.0 ( 5.7 ) Interest expense

0.6 ( 9.2 ) Interest income and other, net

Dairy ( 3.2 ) ( 5.9 ) ( 3.9 ) ( 4.8 ) Product and distribution costs

Foreign currency - other 9.5 ( 42.2 ) 16.2 11.9 Licensed stores revenue

5.0 4.4 Product and distribution costs

— 0.2 Interest income and other, net

Interest rates — 0.3 ( 2.0 ) ( 0.3 ) Interest expense

6 unchanged sentences

Gains/(Losses) Recognized in Earnings

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

Dec 31, 2023 Jan 1, 2023

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

Mar 31, 2024 Apr 2, 2023 Mar 31, 2024 Apr 2, 2023

Non-Designated Derivatives:

7 unchanged sentences

Notional amounts of outstanding derivative contracts (in millions) :

Dec 31, 2023 Oct 1, 2023

Mar 31, 2024 Oct 1, 2023

Coffee $ 68 $ 266

5 unchanged sentences

Derivative Assets

Balance Sheet Location Dec 31, 2023 Oct 1, 2023

Balance Sheet Location Mar 31, 2024 Oct 1, 2023

Designated Derivative Instruments:

7 unchanged sentences

Non-designated Derivative Instruments:

Dairy Prepaid expenses and other current assets 0.1 —

Diesel fuel and other commodities Prepaid expenses and other current assets 0.2 0.7

1 unchanged sentence

Derivative Liabilities

Balance Sheet Location Dec 31, 2023 Oct 1, 2023

Balance Sheet Location Mar 31, 2024 Oct 1, 2023

Designated Derivative Instruments:

Cross-currency swaps Other long-term liabilities $ 0.8 $ —

Dairy Accrued liabilities $ 1.7 $ 1.1

9 unchanged sentences

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

Dec 31, 2023 Oct 1, 2023 Dec 31, 2023 Oct 1, 2023

Mar 31, 2024 Oct 1, 2023 Mar 31, 2024 Oct 1, 2023

Location on the balance sheet

6 unchanged sentences

Fair Value Measurements at Reporting Date Using

December 31, 2023 Quoted Prices in Active Markets for Identical Assets

March 31, 2024 Quoted Prices in Active Markets for Identical Assets

(Level 1) Significant Other Observable Inputs

4 unchanged sentences

Corporate debt securities 37.7 — 37.7 —

government treasury securities 10.4 10.4 — —

Foreign government obligations 4.0 — 4.0 —

Foreign corporate bonds

Mortgage and other asset-backed securities 0.3 — 0.3 —

State and local government obligations 1.4 — 1.4 —

government treasury securities 16.5 16.5 — —

Total available-for-sale debt securities 56.1 16.5 39.6 —

10 unchanged sentences

government treasury securities 97.5 97.5 — —

Total available-for-sale debt securities 280.2 97.5 172.2 10.5

Structured deposits 0.2 — 0.2 —

Total long-term investments 280.4 97.5 172.4 10.5

1 unchanged sentence

Derivative assets 181.2 — 181.2 —

Structured deposits 0.1 — 0.1 —

Total assets $ 3,636.3 $ 2,962.6 $ 663.2 $ 10.5

38 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 December 31, 2023 and October 1, 2023.

Gross unrealized holding gains and losses on available-for-sale debt securities, structured deposits, and marketable equity securities were not material as of March 31, 2024 and October 1, 2023.

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 quarter ended December 31, 2023 and January 1, 2023.

There were no material fair value adjustments during the two quarters ended March 31, 2024 and April 2, 2023.

Inventories (in millions) :

Dec 31, 2023 Oct 1, 2023

Mar 31, 2024 Oct 1, 2023

Unroasted $ 694.9 $ 747.7

5 unchanged sentences

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

As of December 31, 2023, we had committed to purchasing green coffee totaling $ 396.4 million under fixed-price contracts and an estimated $ 843.7 million under price-to-be-fixed contracts.

As of March 31, 2024, we had committed to purchasing green coffee totaling $ 398.6 million under fixed-price contracts and an estimated $ 855.6 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

Dec 31, 2023 Oct 1, 2023

Mar 31, 2024 Oct 1, 2023

Land $ 46.1 $ 46.1

9 unchanged sentences

Accrued Liabilities

Dec 31, 2023 Oct 1, 2023

Mar 31, 2024 Oct 1, 2023

Accrued occupancy costs $ 78.0 $ 86.7

6 unchanged sentences

Store Operating Expenses

Quarter Ended

Dec 31, 2023 Jan 1, 2023

Quarter Ended Two Quarters Ended

Mar 31, 2024 Apr 2, 2023 Mar 31, 2024 Apr 2, 2023

Wages and benefits $ 2,139.4 $ 2,174.3 $ 4,348.7 $ 4,389.9

4 unchanged sentences

Indefinite-Lived Intangible Assets

(in millions) Dec 31, 2023 Oct 1, 2023

(in millions) Mar 31, 2024 Oct 1, 2023

Trade names, trademarks and patents $ 79.5 $ 79.4

Finite-Lived Intangible Assets

Dec 31, 2023 Oct 1, 2023

Mar 31, 2024 Oct 1, 2023

(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 $ 1,153.1 $ ( 1,121.9 ) $ 31.2 $ 1,149.3 $ ( 1,108.2 ) $ 41.1

Amortization expense for finite-lived intangible assets was $ 5.1 million for the quarter ended December 31, 2023 and $ 5.6 million for the quarter ended January 1, 2023.

Estimated future amortization expense as of December 31, 2023 ( in millions ):

Amortization expense for finite-lived intangible assets was $ 5.1 million and $ 10.2 million for the quarter and two quarters ended March 31, 2024, respectively, and $ 5.3 million and $ 10.9 million for the quarter and two quarters ended April 2, 2023, respectively.

Estimated future amortization expense as of March 31, 2024 ( in millions ):

Fiscal Year Total

2024 (excluding the quarter ended December 31, 2023)

2024 (excluding the two quarters ended March 31, 2024)

Thereafter 2.2

5 unchanged sentences

( 0.1 ) 11.1 — — 11.0

Goodwill balance at December 31, 2023

Goodwill balance at March 31, 2024

$ 491.4 $ 2,702.2 $ 34.7 $ 1.0 $ 3,229.3

10 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 December 31, 2023, we were in compliance with all applicable covenants.

No amounts were outstanding under our 2021 credit facility as of December 31, 2023 or October 1, 2023.

As of March 31, 2024, we were in compliance with all applicable covenants.

No amounts were outstanding under our 2021 credit facility as of March 31, 2024 or October 1, 2023.

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 December 31, 2023, we had $ 300.0 million in borrowings outstanding under the program.

As of October 1, 2023, we had no borrowings outstanding under this program.

No amounts were outstanding under our commercial paper program as of March 31, 2024 and October 1, 2023.

Additionally, we hold the following Japanese yen-denominated credit facilities that are available for working capital needs and capital expenditures within our Japanese market:

3 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 December 31, 2023, we had ¥ 7.0 billion, or $ 49.5 million, of borrowings outstanding under these credit facilities.

As of March 31, 2024, we had ¥ 5.0 billion, or $ 33.0 million, of borrowings outstanding under these credit facilities.

As of October 1, 2023, we had ¥ 5.0 billion, or $ 33.5 million, of 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) :

Dec 31, 2023 Oct 1, 2023 Stated Interest Rate Effective Interest Rate (1)

Mar 31, 2024 Oct 1, 2023 Stated Interest Rate Effective Interest Rate (1)

Issuance Amount Estimated Fair Value Amount Estimated Fair Value

8 unchanged sentences

June 2026 notes 500.0 472.5 500.0 463.5 2.450 % 2.511 %

February 2027 notes 1,000.0 998.0 — — 4.850 % 4.958 %

March 2027 notes 500.0 459.6 500.0 446.1 2.000 % 2.058 %

7 unchanged sentences

February 2032 notes 1,000.0 874.8 1,000.0 828.0 3.000 % 3.155 %

February 2033 notes 500.0 495.0 500.0 470.7 4.800 % 3.798 %

February 2034 notes 500.0 496.5 — — 5.000 % 5.127 %

June 2045 notes 350.0 303.7 350.0 275.3 4.300 % 4.348 %

11 unchanged sentences

(2) Amount includes the change in fair value due to changes in benchmark interest rates related to hedging our October 2023 notes and $ 350.0 million of our August 2029 notes.

Refer to Note 2 , Derivative Financial Instruments, for additional information on our interest rate swap designated as a fair value hedge.

(3) Floating rate notes that 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 5.998 % at December 31, 2023.

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

(3) Floating rate notes that 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 5.848 % at maturity on February 14, 2024.

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

The following table summarizes our long-term debt maturities as of December 31, 2023 by fiscal year ( in millions ):

The following table summarizes our long-term debt maturities as of March 31, 2024 by fiscal year ( in millions ):

Fiscal Year Total

2024 $ 1,101.1

Thereafter 10,850.0

1 unchanged sentence

The components of lease costs (in millions) :

Quarter Ended

Dec 31, 2023 Jan 1, 2023

Quarter Ended Two Quarters Ended

Mar 31, 2024 Apr 2, 2023 Mar 31, 2024 Apr 2, 2023

Operating lease costs (1)

5 unchanged sentences

The following table includes supplemental information (in millions) :

Quarter Ended

Dec 31, 2023 Jan 1, 2023

Two Quarters Ended

Mar 31, 2024 Apr 2, 2023

Cash paid related to operating lease liabilities $ 778.8 $ 819.0

Operating lease liabilities arising from obtaining right-of-use assets

Dec 31, 2023 Jan 1, 2023

Mar 31, 2024 Apr 2, 2023

Weighted-average remaining operating lease term 8.6 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 December 31, 2023 and October 1, 2023.

There were no material finance leases as of March 31, 2024 and October 1, 2023.

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

Fiscal Year Total

2024 (excluding the quarter ended December 31, 2023)

2024 (excluding the two quarters ended March 31, 2024)

Thereafter 4,589.9

2 unchanged sentences

Total $ 9,587.0

As of December 31, 2023, we have entered into operating leases that have not yet commenced of $ 1.5 billion, primarily related to real estate leases.

As of March 31, 2024, we have entered into operating leases that have not yet commenced of $ 1.6 billion, primarily related to real estate leases.

These leases will commence between fiscal year 2024 and fiscal year 2027 with lease terms ranging from two to twenty years.

1 unchanged sentence

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 December 31, 2023 and October 1, 2023, the current and long-term deferred revenue related to the Nestlé up-front payment was $ 177.0 million and $ 6.0 billion, respectively.

During each of the quarters ended December 31, 2023 and January 1, 2023, we recognized $ 44.1 million of prepaid royalty revenue related to Nestlé.

As of March 31, 2024, the current and long-term deferred revenue related to the Nestlé up-front payment was $ 177.0 million and $ 5.9 billion, respectively.

As of October 1, 2023, the current and long-term deferred revenue related to the Nestlé up-front payment was $ 177.0 million and $ 6.0 billion, respectively.

During each of the quarters ended March 31, 2024 and April 2, 2023, we recognized $ 44.1 million of prepaid royalty revenue related to Nestlé.

During each of the two quarters ended March 31, 2024 and April 2, 2023, we recognized $ 88.2 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 December 31, 2023

Quarter Ended March 31, 2024

Stored value cards and loyalty program at December 31, 2023

Revenue deferred - card activations, card reloads and Stars earned 3,456.5

Revenue recognized - card and Stars redemptions and breakage ( 3,792.4 )

Stored value cards and loyalty program at March 31, 2024 (2)

Quarter Ended April 2, 2023

Stored value cards and loyalty program at January 1, 2023

Revenue deferred - card activations, card reloads and Stars earned 3,416.0

Revenue recognized - card and Stars redemptions and breakage ( 3,778.4 )

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

Two Quarters Ended March 31, 2024

Stored value cards and loyalty program at October 1, 2023

1 unchanged sentence

Revenue recognized - card and Stars redemptions and breakage ( 7,890.8 )

Stored value cards and loyalty program at December 31, 2023 (2)

Quarter Ended January 1, 2023

Stored value cards and loyalty program at March 31, 2024 (2)

Two Quarters Ended April 2, 2023

Stored value cards and loyalty program at October 2, 2022

1 unchanged sentence

Revenue recognized - card and Stars redemptions and breakage ( 7,492.5 )

Stored value cards and loyalty program at January 1, 2023 (2)

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

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

(2) As of December 31, 2023 and January 1, 2023, approximately $ 2.0 billion and $ 1.9 billion, respectively, of these amounts were current.

(2) As of March 31, 2024 and April 2, 2023, approximately $ 1.7 billion and $ 1.6 billion, respectively, of these amounts were current.

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

December 31, 2023

March 31, 2024

Net gains/(losses) in AOCI, beginning of period $ ( 7.9 ) $ 15.7 $ 217.7 $ ( 783.3 ) $ ( 557.8 )

4 unchanged sentences

Net gains/(losses) in AOCI, end of period $ ( 7.9 ) $ 40.6 $ 279.2 $ ( 933.4 ) $ ( 621.5 )

January 1, 2023

April 2, 2023

Net gains/(losses) in AOCI, beginning of period $ ( 13.9 ) $ ( 34.9 ) $ 156.8 $ ( 646.9 ) $ ( 538.9 )

3 unchanged sentences

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

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

March 31, 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 3.9 60.7 50.3 28.2 143.1

Net (gains)/losses reclassified from AOCI to earnings 0.5 27.4 ( 14.4 ) — 13.5

Other comprehensive income/(loss) attributable to Starbucks 4.4 88.1 35.9 28.2 156.6

Other comprehensive income/(loss) attributable to NCI — — — 0.1 0.1

Net gains/(losses) in AOCI, end of period $ ( 7.9 ) $ 40.6 $ 279.2 $ ( 933.4 ) $ ( 621.5 )

April 2, 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 4.3 ( 152.3 ) ( 50.3 ) 283.6 85.3

Net (gains)/losses reclassified from AOCI to earnings 0.3 ( 134.8 ) ( 9.2 ) — ( 143.7 )

Other comprehensive income/(loss) attributable to Starbucks 4.6 ( 287.1 ) ( 59.5 ) 283.6 ( 58.4 )

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

Impact of reclassifications from AOCI on the consolidated statements of earnings (in millions) :

2 unchanged sentences

the Statements of Earnings

Dec 31, 2023 Jan 1, 2023

Mar 31, 2024 Apr 2, 2023

Gains/(losses) on available-for-sale debt securities $ ( 0.4 ) $ ( 0.3 ) Interest income and other, net

4 unchanged sentences

$ 9.6 $ 57.1 Net of tax

In addition to 2.4 billion shares of authorized common stock with $ 0.001 par value per share, we have 7.5 million shares of authorized preferred stock, none of which was outstanding as of December 31, 2023.

During the quarters ended December 31, 2023 and January 1, 2023, we repurchased 12.8 million and 1.9 million shares of common stock on the open market for $ 1,250.1 million and $ 191.4 million, respectively.

As of December 31, 2023, 29.8 million shares remained available for repurchase under current authorizations.

During the first quarter of fiscal 2024, our Board of Directors approved a quarterly cash dividend to shareholders of $ 0.57 per share to be paid on February 23, 2024 to shareholders of record as of the close of business on February 9, 2024 .

Two Quarters Ended

Components Amounts Reclassified from AOCI Affected Line Item in

the Statements of Earnings

Mar 31, 2024 Apr 2, 2023

Gains/(losses) on available-for-sale debt securities $ ( 0.7 ) $ ( 0.4 ) Interest income and other, net

Gains/(losses) on cash flow hedges ( 29.7 ) 153.1 Please refer to Note 3 , Derivative Financial Instruments for additional information.

Gains/(losses) on net investment hedges 19.1 12.3 Interest expense

( 11.3 ) 165.0 Total before tax

( 2.2 ) ( 21.3 ) Tax expense

$ ( 13.5 ) $ 143.7 Net of tax

During the two quarters ended March 31, 2024 and April 2, 2023, we repurchased 12.8 million and 4.9 million shares of common stock on the open market for $ 1,250.1 million and $ 495.3 million, respectively.

As of March 31, 2024, 29.8 million shares remained available for repurchase under current authorizations.

During the second quarter of fiscal 2024, our Board of Directors approved a quarterly cash dividend to shareholders of $ 0.57 per share to be paid on May 31, 2024 to shareholders of record as of the close of business on May 17, 2024.

Employee Stock Plans

As of December 31, 2023, there were 84.9 million shares of common stock available for issuance pursuant to future equity-based compensation awards and 10.1 million shares available for issuance under our employee stock purchase plan.

As of March 31, 2024, there were 84.9 million shares of common stock available for issuance pursuant to future equity-based compensation awards and 10.0 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

Dec 31, 2023 Jan 1, 2023

Quarter Ended Two Quarters Ended

Mar 31, 2024 Apr 2, 2023 Mar 31, 2024 Apr 2, 2023

Restricted Stock Units (“RSUs”) $ 78.3 $ 74.1 $ 173.2 $ 159.2

1 unchanged sentence

Total stock-based compensation expense $ 78.2 $ 74.1 $ 173.0 $ 159.3

Stock option and RSU transactions from October 1, 2023 through December 31, 2023 ( in millions ):

Stock option and RSU transactions from October 1, 2023 through March 31, 2024 ( in millions ):

Stock Options RSUs

3 unchanged sentences

Forfeited/expired — ( 0.4 )

Options outstanding/Nonvested RSUs, December 31, 2023

Total unrecognized stock-based compensation expense, net of estimated forfeitures, as of December 31, 2023

Options outstanding/Nonvested RSUs, March 31, 2024

Total unrecognized stock-based compensation expense, net of estimated forfeitures, as of March 31, 2024

Earnings per Share

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

Quarter Ended

Dec 31, 2023 Jan 1, 2023

Quarter Ended Two Quarters Ended

Mar 31, 2024 Apr 2, 2023 Mar 31, 2024 Apr 2, 2023

Net earnings attributable to Starbucks $ 772.4 $ 908.3 $ 1,796.8 $ 1,763.6

14 unchanged sentences

Consolidated revenue mix by product type ( in millions ):

Quarter Ended

Dec 31, 2023 Jan 1, 2023

Quarter Ended Two Quarters Ended

Mar 31, 2024 Apr 2, 2023 Mar 31, 2024 Apr 2, 2023

$ 5,160.6 60 % $ 5,226.9 60 % $ 10,856.4 60 % $ 10,401.4 60 %

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, serveware, and beverage-related ingredients, among other items.

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

(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 (in millions) :

Quarter Ended

North America International Channel Development Corporate and Other Total

December 31, 2023

March 31, 2024

Total net revenues $ 6,380.0 $ 1,757.3 $ 418.2 $ 7.5 $ 8,563.0

2 unchanged sentences

Operating income/(loss) $ 1,148.3 $ 233.8 $ 216.3 $ ( 499.5 ) $ 1,098.9

January 1, 2023

April 2, 2023

Total net revenues $ 6,380.6 $ 1,854.8 $ 480.7 $ 3.7 $ 8,719.8

2 unchanged sentences

Operating income/(loss) $ 1,217.9 $ 314.7 $ 262.1 $ ( 467.2 ) $ 1,327.5

Two Quarters Ended

North America International Channel Development Corporate and Other Total

March 31, 2024

Total net revenues $ 13,500.7 $ 3,603.6 $ 866.2 $ 17.8 $ 17,988.3

Depreciation and amortization expenses 507.5 168.3 — 61.4 737.2

Income from equity investees — 0.3 123.5 — 123.8

Operating income/(loss) $ 2,669.1 $ 475.3 $ 426.0 $ ( 986.1 ) $ 2,584.3

April 2, 2023

Total net revenues $ 12,931.8 $ 3,534.9 $ 958.9 $ 8.2 $ 17,433.8

Depreciation and amortization expenses 443.1 167.7 0.1 58.1 669.0

Income from equity investees — 1.2 108.0 — 109.2

Operating income/(loss) $ 2,430.4 $ 555.1 $ 488.4 $ ( 893.2 ) $ 2,580.7

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