STARBUCKS CORP 10-Q

Item 1. Financial Statements STARBUCKS CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS (in millions, except per share data, unaudited) Quarter Ended Dec 28, 2025 Dec 29, 2024 Net revenues: Company-operated stores $ 8,188.0 $ 7,785.3 Licensed stores 1,130.4 1,135.7 Other 596.7 476.8 Total net revenues 9,915.1 9,397.8 Product and distribution costs 3,273.6 2,893.7 Store operating expenses 4,552.3 4,203.0 Other operating expenses 131.2 152.5 Depreciation and amortization expenses 400.9 407.6 General and administrative expenses 638.8 665.8 Restructuring and impairments 88.1 — Total operating expenses 9,084.9 8,322.6 Income from equity investees 60.6 46.5 Operating income 890.8 1,121.7 Interest income and other, net 13.0 27.8 Interest expense ( 139.0 ) ( 127.2 ) Earnings before income taxes 764.8 1,022.3 Income tax expense 471.6 241.4 Net earnings including noncontrolling interests 293.2 780.9 Net earnings/(loss) attributable to noncontrolling interests ( 0.1 ) 0.1 Net earnings attributable to Starbucks $ 293.3 $ 780.8 Earnings per share - basic $ 0.26 $ 0.69 Earnings per share - diluted $ 0.26 $ 0.69 Weighted average shares outstanding: Basic 1,138.0 1,134.7 Diluted 1,141.9 1,138.4 See Notes to Consolidated Financial Statements. 3 Table of Contents STARBUCKS CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in millions, unaudited) Quarter Ended Dec 28, 2025 Dec 29, 2024 Net earnings including noncontrolling interests $ 293.2 $ 780.9 Other comprehensive income/(loss): Unrealized holding gains/(losses) on available-for-sale debt securities 0.7 ( 2.1 ) Tax (expense)/benefit ( 0.2 ) 0.5 Unrealized gains/(losses) on cash flow hedging instruments ( 4.2 ) 69.6 Tax (expense)/benefit ( 0.3 ) ( 18.1 ) Unrealized gains/(losses) on net investment hedging instruments 55.4 207.5 Tax (expense)/benefit ( 14.0 ) ( 52.4 ) Translation adjustment and other 21.3 ( 311.5 ) Reclassification adjustment for net (gains)/losses realized in net earnings for available-for-sale securities, hedging instruments, translation adjustment, and other ( 33.8 ) ( 66.9 ) Tax expense/(benefit) 8.5 18.6 Other comprehensive income/(loss), net of tax 33.4 ( 154.8 ) Comprehensive income including noncontrolling interests 326.6 626.1 Comprehensive income/(loss) attributable to noncontrolling interests — ( 0.2 ) Comprehensive income attributable to Starbucks $ 326.6 $ 626.3 See Notes to Consolidated Financial Statements. 4 Table of Contents STARBUCKS CORPORATION CONSOLIDATED BALANCE SHEETS (in millions, except per share data, unaudited) Dec 28, 2025 Sep 28, 2025 ASSETS Current assets: Cash and cash equivalents $ 3,413.4 $ 3,219.8 Short-term investments 184.9 247.2 Accounts receivable, net 1,219.2 1,277.5 Inventories 2,114.4 2,185.6 Prepaid expenses and other current assets 374.1 452.2 Assets held for sale 4,716.6 — Total current assets 12,022.6 7,382.3 Long-term investments 288.3 246.9 Equity investments 432.0 466.2 Property, plant and equipment, net 7,399.5 8,493.5 Operating lease, right-of-use asset 8,228.2 9,315.7 Deferred income taxes, net 1,600.8 1,826.9 Other long-term assets 778.6 752.5 Other intangible assets 167.2 166.8 Goodwill 1,311.1 3,368.9 TOTAL ASSETS $ 32,228.3 $ 32,019.7 LIABILITIES AND SHAREHOLDERS’ EQUITY/(DEFICIT) Current liabilities: Accounts payable $ 1,682.2 $ 1,852.8 Accrued liabilities 2,334.3 2,359.7 Accrued payroll and benefits 751.4 1,093.9 Current portion of operating lease liability 1,342.9 1,564.5 Stored value card liability and current portion of deferred revenue 2,121.7 1,840.6 Current portion of long-term debt 1,499.5 1,498.9 Liabilities held for sale 1,754.6 — Total current liabilities 11,486.6 10,210.4 Long-term debt 14,580.9 14,575.9 Operating lease liability 8,047.6 8,972.2 Deferred revenue 5,748.0 5,772.6 Other long-term liabilities 746.5 577.8 Total liabilities 40,609.6 40,108.9 Shareholders’ deficit: Common stock ($ 0.001 par value) — authorized, 2,400.0 shares; issued and outstanding, 1,139.1 and 1,136.9 shares, respectively 1.1 1.1 Additional paid-in capital 721.5 634.1 Retained deficit ( 8,685.4 ) ( 8,272.5 ) Accumulated other comprehensive income/(loss) ( 425.9 ) ( 459.3 ) Total shareholders’ deficit ( 8,388.7 ) ( 8,096.6 ) Noncontrolling interests 7.4 7.4 Total deficit ( 8,381.3 ) ( 8,089.2 ) TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY/(DEFICIT) $ 32,228.3 $ 32,019.7 See Notes to Consolidated Financial Statements. 5 Table of Contents STARBUCKS CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions, unaudited) Quarter Ended Dec 28, 2025 Dec 29, 2024 OPERATING ACTIVITIES: Net earnings including noncontrolling interests $ 293.2 $ 780.9 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 431.9 432.2 Deferred income taxes, net 302.6 ( 14.9 ) Income earned from equity method investees, net ( 62.3 ) ( 53.1 ) Distributions received from equity method investees 96.7 81.9 Stock-based compensation 126.1 100.6 Non-cash lease costs 352.8 493.7 Loss on disposal, impairment, and accelerated amortization of assets 109.7 40.9 Other 5.4 ( 7.0 ) Cash provided by/(used in) changes in operating assets and liabilities: Accounts receivable ( 0.2 ) ( 75.8 ) Inventories ( 31.8 ) 25.1 Income taxes payable 55.4 104.9 Accounts payable ( 39.0 ) 230.2 Deferred revenue 472.3 480.9 Operating lease liability ( 433.2 ) ( 510.2 ) Other operating assets and liabilities ( 81.9 ) ( 38.3 ) Net cash provided by operating activities 1,597.7 2,072.0 INVESTING ACTIVITIES: Purchases of investments ( 51.0 ) ( 66.3 ) Sales of investments 0.3 — Maturities and calls of investments 77.2 87.6 Additions to property, plant and equipment ( 323.7 ) ( 692.9 ) Acquisitions, net of cash acquired — ( 177.1 ) Other ( 25.7 ) ( 6.5 ) Net cash used in investing activities ( 322.9 ) ( 855.2 ) FINANCING ACTIVITIES: Net proceeds from issuance of short-term debt 2.5 — Repayments of short-term debt — ( 5.4 ) Proceeds from issuance of common stock 17.7 17.1 Cash dividends paid ( 705.1 ) ( 691.9 ) Minimum tax withholdings on share-based awards ( 58.1 ) ( 74.6 ) Net cash used in financing activities ( 743.0 ) ( 754.8 ) Effect of exchange rate changes on cash and cash equivalents 9.0 ( 76.8 ) Less: Net change in cash balances classified as assets held for sale ( 347.2 ) — Net increase/(decrease) in cash and cash equivalents 193.6 385.2 CASH AND CASH EQUIVALENTS: Beginning of period 3,219.8 3,286.2 End of period $ 3,413.4 $ 3,671.4 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Interest, net of capitalized interest $ 142.4 $ 98.3 Income taxes $ 94.9 $ 121.4 See Notes to Consolidated Financial Statements. 6 Table of Contents STARBUCKS CORPORATION CONSOLIDATED STATEMENTS OF EQUITY For the Quarter Ended December 28, 2025 and December 29, 2024 (in millions, except per share data, unaudited) Common Stock Additional Paid-in Capital Retained Earnings/(Deficit) Accumulated Other Comprehensive Income/(Loss) Shareholders’ Equity/(Deficit) Noncontrolling Interests Total Shares Amount Balance, September 28, 2025 1,136.9 $ 1.1 $ 634.1 $ ( 8,272.5 ) $ ( 459.3 ) $ ( 8,096.6 ) $ 7.4 $ ( 8,089.2 ) Net earnings — — — 293.3 — 293.3 ( 0.1 ) 293.2 Other comprehensive income/(loss) — — — — 33.3 33.3 0.1 33.4 Stock-based compensation expense — — 127.7 — — 127.7 — 127.7 Exercise of stock options/vesting of RSUs 2.1 — ( 52.1 ) — — ( 52.1 ) — ( 52.1 ) Sale of common stock 0.1 — 11.8 — — 11.8 — 11.8 Cash dividends declared, $ 0.62 per share — — — ( 706.2 ) — ( 706.2 ) — ( 706.2 ) Other — — — — 0.1 0.1 — 0.1 Balance, December 28, 2025 1,139.1 $ 1.1 $ 721.5 $ ( 8,685.4 ) $ ( 425.9 ) $ ( 8,388.7 ) $ 7.4 $ ( 8,381.3 ) Balance, September 29, 2024 1,133.5 $ 1.1 $ 322.6 $ ( 7,343.8 ) $ ( 428.8 ) $ ( 7,448.9 ) $ 7.3 $ ( 7,441.6 ) Net earnings — — — 780.8 — 780.8 0.1 780.9 Other comprehensive income/(loss) — — — — ( 154.5 ) ( 154.5 ) ( 0.3 ) ( 154.8 ) Stock-based compensation expense — — 102.1 — — 102.1 — 102.1 Exercise of stock options/vesting of RSUs 2.1 — ( 70.7 ) — — ( 70.7 ) — ( 70.7 ) Sale of common stock 0.2 — 13.2 — — 13.2 — 13.2 Cash dividends declared, $ 0.61 per share — — — ( 693.4 ) — ( 693.4 ) — ( 693.4 ) Other — — — — ( 0.3 ) ( 0.3 ) — ( 0.3 ) Balance, December 29, 2024 1,135.8 $ 1.1 $ 367.2 $ ( 7,256.4 ) $ ( 583.6 ) $ ( 7,471.7 ) $ 7.1 $ ( 7,464.6 ) See Notes to Consolidated Financial Statements. 7 Table of Contents STARBUCKS CORPORATION INDEX FOR NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1 Summary of Significant Accounting Policies and Estimates 9 Note 2 Acquisitions and Divestitures 11 Note 3 Derivative Financial Instruments 12 Note 4 Fair Value Measurements 15 Note 5 Inventories 17 Note 6 Supplemental Balance Sheet and Statement of Earnings Information 17 Note 7 Other Intangible Assets and Goodwill 18 Note 8 Debt 19 Note 9 Leases 21 Note 10 Deferred Revenue 22 Note 11 Equity 23 Note 12 Employee Stock Plans 23 Note 13 Income Taxes 24 Note 14 Earnings per Share 24 Note 15 Commitments and Contingencies 24 Note 16 Segment Reporting 24 Note 17 Restructuring 26 8 Table of Contents STARBUCKS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Note 1: Summary of Significant Accounting Policies Financial Statement Preparation The unaudited consolidated financial statements as of December 28, 2025, and for the quarters ended December 28, 2025 and December 29, 2024, 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 28, 2025 and December 29, 2024 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 (together with its subsidiaries) is referred to as “Starbucks,” the “Company,” “we,” “us,” or “our.” Segment information is prepared on the same basis that our chief executive officer, who is our Chief Operating Decision Maker (“CODM”), manages the segments, evaluates financial results, and makes key operating decisions. The financial information as of September 28, 2025 is derived from our audited consolidated financial statements and notes for the fiscal year ended September 28, 2025 (“fiscal 2025”) included in Item 8 in the fiscal 2025 Annual Report on Form 10-K filed with the SEC on November 14, 2025 (“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 28, 2025 are not necessarily indicative of the results of operations that may be achieved for the entire fiscal year ending September 27, 2026 (“fiscal 2026”). Restructuring In the fourth quarter of fiscal 2024 , we announced our “Back to Starbucks” strategy, which was implemented with the goal to bring customers back to our stores and return to growth by revitalizing coffeehouses, enhancing the customer experience, and improving efficiency. As part of this strategy, during the second quarter of fiscal 2025 , we announced our plan to restructure our support organization in an effort to operate more efficiently, increase accountability, reduce complexity, and drive better integration, which resulted in a reduction in our support partner workforce. In the fourth quarter of fiscal 2025 , we announced a restructuring plan involving the closure of coffeehouses, and the further transformation of our support organization, as part of the Company’s “Back to Starbucks” strategy. We assessed our existing store portfolio with respect to both whether coffeehouses had a viable path to offering the physical environment consistent with the brand and a clear path to financial performance, and we closed, or plan to close, coffeehouses that did not meet these criteria. Refer to Note 17 , Restructuring, for further discussion. Assets Held for Sale We classify long-lived assets or disposal groups as held for sale in the period when all of the following conditions have been met: • we have approved and committed to a plan to sell the assets or disposal group; • the asset or disposal group is available for immediate sale in its present condition; • an active program to locate a buyer and other actions required to complete the sale have been initiated; • the sale of the asset or disposal group is probable and expected to be completed within one year; • the asset or disposal group is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and • it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. We initially measure a long-lived asset or disposal group that is classified as held for sale at the lower of its carrying value or fair value less any costs to sell and recognize any loss in the period in which the held-for-sale criteria are met. Gains are not recognized until the date of sale. We cease depreciation and amortization of a long-lived asset, or assets within a disposal group, upon their designation as held for sale and subsequently assess fair value less any costs to sell at each reporting period until the asset or disposal group is no longer classified as held for sale. In the first quarter of fiscal 2026, the company announced an agreement to form a joint venture with Boyu Capital to operate Starbucks retail in China (the “disposal group”). Under the agreement, Boyu Capital will acquire up to a 60% interest in 9 Table of Contents Starbucks retail operations in China. Starbucks will retain a 40% interest in the joint venture and will continue to own and license the Starbucks brand and intellectual property to the new entity. We classified the assets and liabilities of the disposal group as held for sale on the consolidated balance sheets, which required us to cease property, plant, and equipment depreciation and operating lease right-of-use (“ROU”) asset amortization of the related long-lived assets, resulting in reduced depreciation and amortization and store operating expenses. We also changed our indefinite reinvestment assertions upon classification as held for sale, resulting in an increase in our income tax expense. No impairment was recorded upon the classification of the disposal group as held for sale. Refer to Note 2 , Acquisitions and Divestitures, for further discussion. Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In the fourth quarter of fiscal 2025, we adopted the Financial Accounting Standards Board (“FASB”) issued guidance expanding segment disclosure requirements. The amendments require enhanced disclosure for certain segment items and disclosure on how our CODM uses reported measures to assess segment performance. The amendments do not change how segments are determined, aggregated, or how thresholds are applied to determine reportable segments. The adoption of this guidance did not have a significant impact on our consolidated financial statement disclosures. Refer to Note 16 , Segment Reporting, for our segment disclosures including enhancements as a result of the amendments. Recent Accounting Pronouncements Not Yet Adopted In December 2023, the FASB issued guidance expanding disclosure requirements related to income taxes. The amendments require enhanced jurisdictional disclosures for the income tax rate reconciliation and related to cash income taxes paid. Additionally, certain disclosures related to unrecognized tax benefits and indefinite reinvestment assertions were removed. The amendments are effective for our fiscal year ending September 27, 2026. While we are still evaluating the specific impacts, we anticipate this guidance will have a significant impact on our annual income tax disclosures. In November 2024, the FASB issued guidance expanding disclosure requirements related to certain income statement expenses. The amendments require tabular disclosure of certain operating expenses disaggregated into categories, such as purchases of inventory, employee compensation, depreciation, and intangible asset amortization. The amendments are effective for our fiscal year ending October 1, 2028, and may be applied retrospectively. While we are still evaluating the specific impacts and adoption method, we anticipate this guidance will have a significant impact on our consolidated financial statement disclosures. In July 2025, the FASB issued guidance providing a practical expedient for measuring expected credit losses on current accounts receivable and current contract assets arising from revenue transactions. The amendment is effective for our fiscal year ending October 3, 2027. While we are still evaluating the specific impacts, we anticipate the impact to be limited to the simplification of the estimation process, with no material impact on the allowance for credit losses. 10 Table of Contents Note 2: Acquisitions and Divestitures Fiscal 2026 O n November 3, 2025, we announced that the Company entered into an agreement to form a joint venture with Boyu Capital, to operate Starbucks retail in China. We believe this partnership marks a significant milestone in the Company’s ongoing transformation and underscores its commitment to accelerating long-term growth in China. Under the agreement, Boyu Capital will acquire up to a 60 % interest in Starbucks retail operations in China. The partial divestiture is expected to result in the conversion of 8,011 company-operated stores to licensed stores within our International segment. Starbucks will retain a 40 % interest in the joint venture and will continue to own and license the Starbucks brand and intellectual property to the new entity. Boyu Capital will acquire its interest based on a cash-free, debt-free mutually agreed-upon total enterprise value of approximately $ 4 billion , to be further adjusted for other contractually agreed-upon items. The transaction is subject to required regulatory a pprovals as we ll as customary closing conditions, and is expected to close by early calendar year 2026. In the first quarter of 2026, we determined that the disposal group met the held-for-sale criteria. Accordingly, we have presented the assets and liabilities of the disposal group as held for sale on the consolidated balance sheets. As of December 28, 2025, the net carrying amounts of the major classes of assets and liabilities of the disposal group were as follows ( in millions ): Amount Cash and cash equivalents $ 347.2 Accounts receivable, net 60.3 Inventories 101.6 Prepaid expenses and other current assets 52.5 Property, plant and equipment, net 875.3 Operating lease, right-of-use asset 1,037.4 Deferred income taxes, net 113.1 Other long-term assets 56.1 Goodwill 2,073.1 Assets held for sale $ 4,716.6 Accounts payable $ 129.0 Accrued liabilities 148.4 Accrued payroll and benefits 110.7 Current portion of operating lease liability 227.5 Stored value card liability and current portion of deferred revenue 197.7 Short-term debt 2.5 Operating lease liability 854.1 Deferred revenue 17.4 Other long-term liabilities 67.3 Liabilities held for sale $ 1,754.6 Fiscal 2025 On October 14, 2024, we acquired a 100% ownership interest in 23.5 Degrees Topco Limited, a U.K. licensed business partner, to expand our portfolio of company-operated stores and enhance the coffeehouse experience for customers. The acquisition converted 113 licensed stores to company-operated stores within our International operating segment. The assets acquired and liabilities assumed are included in our International operating segment. Assets acquired primarily include operating lease ROU assets, intangible assets, goodwill, and property, plant and equipment. The intangible assets acquired as part of this transaction include reacquired licensee agreement rights, which will be amortized over the estimated useful life. In addition, we assumed various liabilities, primarily consisting of operating lease liabilities. The transaction was not material to our consolidated financial statements. 11 Table of Contents Note 3: Derivative Financial Instruments Interest Rates From time to time, we enter into designated cash flow hedges to manage the variability in cash flows due to changes in benchmark interest rates. We enter into interest rate swap agreements, including forward-starting interest rate swaps and treasury locks, settled in cash based upon the difference between an agreed-upon benchmark rate and the prevailing benchmark rate at settlement. These agreements are generally settled around the time of the pricing of the related debt. Each derivative agreement’s gain or loss is recorded in accumulated other comprehensive income (“AOCI”) and is subsequently reclassified to interest expense over the life of the related debt. To hedge the exposure to changes in the fair value of our fixed-rate debt, we enter into interest rate swap agreements, which are designated as fair value hedges. The changes in fair values of these derivative instruments and the offsetting changes in fair values of the underlying hedged debt due to changes in the relevant benchmark interest rates are recorded in interest expense. Refer to Note 8 , Debt, for additional information on our long-term debt. Foreign Currency To reduce cash flow volatility from foreign currency fluctuations, we enter into forward and swap contracts to hedge portions of cash flows of anticipated royalty revenue, inventory purchases, and intercompany borrowing and lending activities. The resulting gains and losses from these derivatives are recorded in AOCI and subsequently reclassified to revenue, product and distribution costs, or interest income and other, net, respectively, when the hedged exposures affect net earnings. From time to time, we may enter into financial instruments, including, but not limited to, forward and swap contracts or foreign currency-denominated debt, to hedge the currency exposure of our net investments in certain international operations. The resulting gains and losses from these derivatives are recorded in AOCI and are subsequently reclassified to net earnings when the hedged net investment is either sold or substantially liquidated. Gains and losses from these derivatives, representing hedged components excluded from the assessment of effectiveness, are amortized over the life of the hedging instrument using a systematic and rational method and recognized in interest expense. Foreign currency forward and swap contracts not designated as hedging instruments are used to mitigate the foreign exchange risk of certain other balance sheet items. Gains and losses from these derivatives are largely offset by the financial impact of translating foreign currency-denominated payables and receivables, and these gains and losses are recorded in interest income and other, net. Commodities Depending on market conditions, we may enter into coffee forward contracts, futures contracts, and collars to hedge anticipated cash flows under our price-to-be-fixed green coffee contracts, which are described further in Note 5, Inventories, or our longer-dated forecasted coffee demand where underlying fixed price and price-to-be-fixed contracts are not yet available. The resulting gains and losses are recorded in AOCI and are subsequently reclassified to product and distribution costs when the hedged exposure affects net earnings. Depending on market conditions, we may also enter into dairy forward contracts and futures contracts to hedge a portion of anticipated cash flows under our dairy purchase contracts and our forecasted dairy demand. The resulting gains or losses are recorded in AOCI and are subsequently reclassified to product and distribution costs when the hedged exposure affects net earnings. Cash flow hedges related to anticipated transactions are designated and documented at the inception of each hedge. Cash flows from hedging transactions are classified in the same categories as the cash flows from the respective hedged items. For de-designated cash flow hedges in which the underlying transactions are no longer probable of occurring or where price variability in the underlying cash flow ceases to exist, the related accumulated derivative gains or losses are recognized in interest income and other, net on our consolidated statements of earnings. These derivatives may be accounted for prospectively as non-designated derivatives until maturity, re-designated to new hedging relationships, or terminated early. We continue to believe transactions related to our designated cash flow hedges are probable to occur. To mitigate the price uncertainty of a portion of our future purchases, including diesel fuel and other commodities, we enter into swap contracts, futures, and collars that are not designated as hedging instruments. The resulting gains and losses are recorded in interest income and other, net to help offset price fluctuations on our beverage, food, packaging, and transportation costs, which are included in product and distribution costs on our consolidated statements of earnings. 12 Table of Contents Gains and losses on derivative contracts and foreign currency-denominated debt designated as hedging instruments included in AOCI and expected to be reclassified into earnings within 12 months, net of tax ( in millions ): Net Gains/(Losses) Included in AOCI Net Gains/(Losses) Expected to be Reclassified from AOCI into Earnings within 12 Months Outstanding Contract/Debt Remaining Maturity (Months) Dec 28, 2025 Sep 28, 2025 Cash Flow Hedges: Coffee $ 11.0 $ 23.3 $ 11.0 5 Foreign currency - other 20.4 19.0 13.4 34 Interest rates ( 0.5 ) ( 1.4 ) ( 3.5 ) 0 Net Investment Hedges: Cross-currency swaps 227.6 206.2 — 99 Foreign currency 16.0 16.0 — 0 Foreign currency debt 135.2 135.2 — 0 Pre-tax gains and losses on derivative contracts and foreign currency-denominated long-term debt designated as hedging instruments recognized in other comprehensive income (“OCI”) and reclassifications from AOCI to earnings ( in millions ): Quarter Ended Gains/(Losses) Recognized in OCI Before Reclassifications Gains/(Losses) Reclassified from AOCI to Earnings Location of gain/(loss) Dec 28, 2025 Dec 29, 2024 Dec 28, 2025 Dec 29, 2024 Cash Flow Hedges: Coffee $ ( 14.2 ) $ 12.8 $ 0.2 $ 27.7 Product and distribution costs Cross-currency swaps — 0.9 — 0.8 Interest income and other, net Dairy — ( 1.1 ) — 1.4 Product and distribution costs Foreign currency - other 10.0 57.0 6.7 8.8 Licensed stores revenue 1.6 1.7 Product and distribution costs Interest rates — — ( 1.2 ) ( 1.0 ) Interest expense Net Investment Hedges: Cross-currency swaps (1) 55.4 207.5 26.7 27.7 Interest expense (1) Gains and losses recognized in earnings relate to components excluded from the assessment of effectiveness. Pre-tax gains and losses on non-designated derivatives and designated fair value hedging instruments and the related fair value hedged item recognized in earnings ( in millions ): Gains/(Losses) Recognized in Earnings Location of gain/(loss) recognized in earnings Quarter Ended Dec 28, 2025 Dec 29, 2024 Non-Designated Derivatives: Dairy Interest income and other, net $ — $ 0.1 Foreign currency - other Interest income and other, net 1.9 8.9 Diesel fuel and other commodities Interest income and other, net — ( 0.1 ) Fair Value Hedges: Interest rate swaps Interest expense ( 0.3 ) ( 13.1 ) Long-term debt (hedged item) Interest expense ( 1.5 ) 10.6 13 Table of Contents Notional amounts of outstanding derivative contracts (in millions) : Dec 28, 2025 Sep 28, 2025 Coffee $ 205 $ 387 Cross-currency swaps 4,197 4,197 Diesel fuel and other commodities — 2 Foreign currency - other 874 930 Interest rate swaps 350 350 Fair value of outstanding derivative contracts ( in millions ) including the location of the asset and/or liability on the consolidated balance sheets: Derivative Assets Balance Sheet Location Dec 28, 2025 Sep 28, 2025 Designated Derivative Instruments (1) : Cross-currency swaps Other long-term assets 349.5 271.9 Foreign currency - other Prepaid expenses and other current assets 15.9 13.0 Other long-term assets 9.8 6.7 Non-designated Derivative Instruments: Diesel fuel and other commodities Prepaid expenses and other current assets — 0.1 Foreign currency Prepaid expenses and other current assets 0.8 2.7 Derivative Liabilities Balance Sheet Location Dec 28, 2025 Sep 28, 2025 Designated Derivative Instruments: Cross-currency swaps Accrued liabilities $ 40.6 $ 5.8 Other long-term liabilities 17.5 3.5 Foreign currency - other Accrued liabilities 1.2 0.2 Other long-term liabilities 1.0 0.2 Interest rate swaps Other long-term liabilities 17.3 17.0 Non-designated Derivative Instruments: Foreign currency Accrued liabilities 2.0 1.1 Other long-term liabilities — 0.2 (1) We also hold cash and cash equivalents from various settled-to-market exchange traded futures related to coffee hedging. The following amounts were recorded on the consolidated balance sheets related to fixed-to-floating interest rate swaps designated in fair value hedging relationships ( in millions ): Carrying amount of hedged item Cumulative amount of fair value hedging adjustment included in the carrying amount Dec 28, 2025 Sep 28, 2025 Dec 28, 2025 Sep 28, 2025 Location on the balance sheet Long-term debt $ 335.6 $ 334.1 $ ( 14.4 ) $ ( 15.9 ) Additional disclosures related to cash flow gains and losses included in AOCI, as well as subsequent reclassifications to earnings, are included in Note 11 , Equity. 14 Table of Contents Note 4: Fair Value Measurements Assets and liabilities measured at fair value on a recurring basis (in millions) : Fair Value Measurements at Reporting Date Using Balance at December 28, 2025 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash and cash equivalents $ 3,413.4 $ 3,413.4 $ — $ — Short-term investments: Available-for-sale debt securities: Corporate debt securities 55.0 — 42.9 12.1 Mortgage and other asset-backed securities 0.3 — 0.3 — State and local government obligations 1.1 — 1.1 — U.S. government treasury securities 28.9 28.9 — — Total available-for-sale debt securities 85.3 28.9 44.3 12.1 Marketable equity securities 99.6 99.6 — — Total short-term investments 184.9 128.5 44.3 12.1 Prepaid expenses and other current assets: Derivative assets 16.7 — 16.7 — Long-term investments: Available-for-sale debt securities: Corporate debt securities 137.9 — 110.5 27.4 Mortgage and other asset-backed securities 74.2 — 74.2 — State and local government obligations 2.7 — 2.7 — U.S. government treasury securities 73.5 73.5 — — Total available-for-sale debt securities 288.3 73.5 187.4 27.4 Total long-term investments 288.3 73.5 187.4 27.4 Other long-term assets: Derivative assets 359.3 — 359.3 — Total assets $ 4,262.6 $ 3,615.4 $ 607.7 $ 39.5 Liabilities: Accrued liabilities: Derivative liabilities 43.8 — 43.8 — Other long-term liabilities: Derivative liabilities 35.9 — 35.9 — Total liabilities $ 79.7 $ — $ 79.7 $ — 15 Table of Contents Fair Value Measurements at Reporting Date Using Balance at September 28, 2025 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash and cash equivalents $ 3,219.8 $ 3,219.8 $ — $ — Short-term investments: Available-for-sale debt securities: Corporate debt securities 67.8 — 55.9 11.9 Mortgage and other asset-backed securities 0.4 — 0.4 — State and local government obligations 1.1 — 1.1 — U.S. government treasury securities 82.6 82.6 — — Total available-for-sale debt securities 151.9 82.6 57.4 11.9 Marketable equity securities 95.3 95.3 — — Total short-term investments 247.2 177.9 57.4 11.9 Prepaid expenses and other current assets: Derivative assets 15.9 — 15.9 — Long-term investments: Available-for-sale debt securities: Corporate debt securities 132.2 — 105.5 26.7 Mortgage and other asset-backed securities 75.7 — 75.7 — State and local government obligations 2.7 — 2.7 — U.S. government treasury securities 36.3 36.3 — — Total available-for-sale debt securities 246.9 36.3 183.9 26.7 Total long-term investments 246.9 36.3 183.9 26.7 Other long-term assets: Derivative assets 278.6 — 278.6 — Total assets $ 4,008.4 $ 3,434.0 $ 535.8 $ 38.6 Liabilities: Accrued liabilities: Derivative liabilities 7.1 — 7.1 — Other long-term liabilities: Derivative liabilities 20.9 — 20.9 — Total liabilities $ 28.0 $ — $ 28.0 $ — There were no material transfers between levels, and there was no significant activity within Level 3 instruments during the periods presented. The fair values of any financial instruments presented above exclude the impact of netting assets and liabilities when a legally enforceable master netting agreement exists. Gross unrealized holding gains and losses on available-for-sale debt securities, structured deposits, and marketable equity securities were not material as of December 28, 2025 and September 28, 2025. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Assets and liabilities recognized or disclosed at fair value on the consolidated financial statements on a nonrecurring basis include items such as property, plant and equipment, ROU assets, goodwill and other intangible assets, equity and other investments, and other assets. These assets are measured at fair value if determined to be impaired. 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 quarters ended December 28, 2025 and December 29, 2024. 16 Table of Contents Note 5: Inventories (in millions) : Dec 28, 2025 (2) Sep 28, 2025 Coffee: Unroasted $ 990.6 $ 911.2 Roasted 350.5 342.0 Other merchandise held for sale (1) 335.4 399.7 Packaging and other supplies 437.9 532.7 Total $ 2,114.4 $ 2,185.6 (1) “Other merchandise held for sale” includes, among other items, food, serveware, and tea. Inventory levels vary due to seasonality, commodity market supply, and price fluctuations. (2) The fiscal year 2026 balances exclude Starbucks retail operations in China that were classified as held for sale. As of December 28, 2025, we had committed to purchasing green coffee totaling $ 382 million under fixed-price contracts and an estimated $ 879 million under price-to-be-fixed contracts. A portion of our price-to-be-fixed contracts are effectively fixed through the use of futures. See Note 3 , Derivative Financial Instruments, for further discussion. Price-to-be-fixed contracts are purchase commitments whereby the quality, quantity, delivery period, and other negotiated terms are agreed upon, but the date, and therefore the price, at which the base “C” coffee commodity price component will be fixed has not yet been established. For most contracts, either Starbucks or the seller has the option to “fix” the base “C” coffee commodity price prior to the delivery date. For other contracts, Starbucks and the seller may agree upon pricing parameters determined by the base “C” coffee commodity price. Until prices are fixed, we estimate the total cost of these purchase commitments. We believe, based on established relationships with our suppliers and continuous monitoring, the risk of non-delivery on these purchase commitments is remote. Note 6: Supplemental Balance Sheet and Statement of Earnings Information (in millions) : Property, Plant and Equipment, net Dec 28, 2025 (1) Sep 28, 2025 Land $ 55.0 $ 54.9 Buildings 670.4 673.7 Leasehold improvements 10,399.2 11,762.4 Store equipment 3,411.4 3,963.6 Roasting equipment 970.8 982.2 Capitalized software 1,027.8 1,177.7 Furniture, fixtures and other 736.6 893.9 Work in progress 309.1 334.3 Property, plant and equipment, gross 17,580.3 19,842.7 Accumulated depreciation ( 10,180.8 ) ( 11,349.2 ) Property, plant and equipment, net $ 7,399.5 $ 8,493.5 (1) The fiscal year 2026 balances exclude Starbucks retail operations in China that were classified as held for sale. Accrued Liabilities Dec 28, 2025 (1) Sep 28, 2025 Accrued occupancy costs $ 59.6 $ 89.5 Accrued dividends payable 706.2 704.8 Accrued capital and other operating expenditures 861.6 897.0 Insurance reserves 335.5 282.3 Income taxes payable 127.5 150.3 Accrued business taxes 243.9 235.8 Total accrued liabilities $ 2,334.3 $ 2,359.7 (1) The fiscal year 2026 balances exclude Starbucks retail operations in China that were classified as held for sale. 17 Table of Contents Store Operating Expenses Quarter Ended Dec 28, 2025 Dec 29, 2024 Wages and benefits $ 2,658.7 $ 2,389.1 Occupancy costs 804.8 802.1 Other expenses 1,088.8 1,011.8 Total store operating expenses $ 4,552.3 $ 4,203.0 Note 7: Other Intangible Assets and Goodwill Indefinite-Lived Intangible Assets (in millions) Dec 28, 2025 Sep 28, 2025 Trade names, trademarks and patents $ 79.5 $ 79.5 Finite-Lived Intangible Assets Dec 28, 2025 Sep 28, 2025 (in millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Acquired and reacquired rights (1) $ 319.0 $ ( 239.8 ) $ 79.2 $ 1,053.9 $ ( 974.9 ) $ 79.0 Acquired trade secrets and processes 27.6 ( 27.6 ) — 27.6 ( 27.6 ) — Trade names, trademarks and patents 132.0 ( 123.5 ) 8.5 131.2 ( 122.9 ) 8.3 Licensing agreements 12.5 ( 12.5 ) — 13.0 ( 13.0 ) — Other finite-lived intangible assets 2.3 ( 2.3 ) — 20.5 ( 20.5 ) — Total finite-lived intangible assets $ 493.4 $ ( 405.7 ) $ 87.7 $ 1,246.2 $ ( 1,158.9 ) $ 87.3 (1) The decrease in acquired and reacquired rights was a result of Starbucks retail operations in China being classified as held for sale. Amortization expense for finite-lived intangible assets was $ 1.5 million for the quarter ended December 28, 2025 and $ 5.6 million for the quarter ended December 29, 2024, respectively. Estimated future amortization expense as of December 28, 2025 ( in millions ): Fiscal Year Total 2026 (excluding the quarter ended December 28, 2025) $ 4.7 2027 6.0 2028 5.4 2029 5.0 2030 4.8 Thereafter 61.8 Total estimated future amortization expense $ 87.7 18 Table of Contents Goodwill Changes in the carrying amount of goodwill by reportable operating segment (in millions) : North America International Channel Development Corporate and Other Total Goodwill balance at September 28, 2025 $ 490.6 $ 2,842.6 $ 34.7 $ 1.0 $ 3,368.9 Planned divestiture (1) — ( 2,073.1 ) — — ( 2,073.1 ) Other (2) 0.5 14.8 — — 15.3 Goodwill balance at December 28, 2025 $ 491.1 $ 784.3 $ 34.7 $ 1.0 $ 1,311.1 (1) The decrease in the International segment was a result of Starbucks retail operations in China being classified as held for sale. (2) “Other” consists of changes in the goodwill balance resulting from foreign currency translation. Note 8: Debt 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 December 28, 2025, we were in compliance with all applicable covenants. No amounts were outstanding under our 2025 credit facility as of December 28, 2025 or September 28, 2025. Short-term Debt Under our commercial paper program, we may issue unsecured commercial paper notes up to a maximum aggregate amount outstanding at any time of $ 3.0 billion, with individual maturities that may vary but not exceed 397 days from the date of issue. Amounts outstanding under the commercial paper program are required to be backstopped by available commitments under our 2025 credit facility. The proceeds from borrowings under our commercial paper program may be used for working capital needs, capital expenditures, and other corporate purposes, including, but not limited to, business expansion, payment of cash dividends on our common stock, and share repurchases. We had no borrowings outstanding under our commercial paper program as of December 28, 2025 and September 28, 2025. Our total available contractual borrowing capacity for general corporate purposes was $ 3.0 billion as of the end of our first quarter of fiscal 2026. 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 $ 32.1 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 Tokyo Interbank Offered Rate (“TIBOR”) plus an applicable margin of 0.400 %. • A ¥ 10.0 billion, or $ 64.2 million, credit facility is currently set to mature on March 27, 2026 . Borrowings under this credit facility are subject to terms defined within the facility and will bear interest at a variable rate based on TIBOR plus an applicable margin of 0.300 %. As of December 28, 2025 and September 28, 2025, we had no borrowings outstanding under these credit facilities. 19 Table of Contents Long-term Debt Components of long-term debt including the associated interest rates and related estimated fair values by calendar maturity ( in millions, except interest rates) : Dec 28, 2025 Sep 28, 2025 Stated Interest Rate Effective Interest Rate (1) Issuance Amount Estimated Fair Value Amount Estimated Fair Value February 2026 notes $ 1,000.0 $ 1,000.7 $ 1,000.0 $ 1,001.7 4.750 % 4.788 % June 2026 notes 500.0 496.4 500.0 494.0 2.450 % 2.511 % February 2027 notes 1,000.0 1,009.1 1,000.0 1,009.8 4.850 % 4.958 % March 2027 notes 500.0 488.4 500.0 484.7 2.000 % 2.058 % March 2028 notes 600.0 593.8 600.0 591.9 3.500 % 3.529 % May 2028 notes 750.0 757.7 750.0 757.1 4.500 % 4.719 % November 2028 notes 750.0 749.9 750.0 747.9 4.000 % 3.958 % August 2029 notes (2) 1,000.0 983.0 1,000.0 978.5 3.550 % 3.840 % March 2030 notes 750.0 691.8 750.0 687.8 2.250 % 3.084 % May 2030 notes 500.0 510.8 500.0 510.2 4.800 % 4.932 % November 2030 notes 1,250.0 1,155.0 1,250.0 1,145.9 2.550 % 2.582 % February 2031 notes 500.0 515.6 500.0 514.2 4.900 % 5.046 % February 2032 notes 1,000.0 924.1 1,000.0 918.1 3.000 % 3.155 % February 2033 notes 500.0 508.3 500.0 505.7 4.800 % 3.798 % February 2034 notes 500.0 511.9 500.0 509.9 5.000 % 5.127 % May 2035 notes 500.0 521.1 500.0 516.6 5.400 % 5.510 % June 2045 notes 350.0 292.6 350.0 292.1 4.300 % 4.348 % December 2047 notes 500.0 376.9 500.0 378.0 3.750 % 3.765 % November 2048 notes 1,000.0 838.1 1,000.0 849.6 4.500 % 4.504 % August 2049 notes 1,000.0 831.1 1,000.0 839.5 4.450 % 4.447 % March 2050 notes 500.0 343.3 500.0 346.0 3.350 % 3.362 % November 2050 notes 1,250.0 884.0 1,250.0 889.0 3.500 % 3.528 % Total 16,200.0 14,983.6 16,200.0 14,968.2 Aggregate debt issuance costs and unamortized premium/(discount), net ( 105.2 ) ( 109.3 ) Hedge accounting fair value adjustment (2) ( 14.4 ) ( 15.9 ) Total $ 16,080.4 $ 16,074.8 (1) Includes the effects of the amortization of any premium or discount and any gain or loss upon settlement of related treasury locks or forward-starting interest rate swaps utilized to hedge interest rate risk prior to the debt issuance. (2) Amount includes the change in fair value due to changes in benchmark interest rates related to hedging $ 350.0 million of our August 2029 notes. Refer to Note 3 , Derivative Financial Instruments, for additional information on our interest rate swap agreements designated as fair value hedges. 20 Table of Contents The following table summarizes our long-term debt maturities as of December 28, 2025 by fiscal year ( in millions ): Fiscal Year Total 2026 (excluding the quarter ended December 28, 2025) $ 1,500.0 2027 1,500.0 2028 1,350.0 2029 1,750.0 2030 1,250.0 Thereafter 8,850.0 Total $ 16,200.0 Note 9: Leases The components of lease costs (in millions) : Quarter Ended Dec 28, 2025 Dec 29, 2024 Operating lease costs (1) $ 491.6 $ 458.8 Variable lease costs 313.2 293.4 Short-term lease costs 4.8 5.5 Total lease costs $ 809.6 $ 757.7 (1) Includes immaterial amounts of sublease income and rent concessions. The following table includes supplemental information (in millions) : Quarter Ended Dec 28, 2025 Dec 29, 2024 Cash paid related to operating lease liabilities $ 523.6 $ 468.4 Operating lease liabilities arising from obtaining ROU assets (1) 312.6 628.7 Dec 28, 2025 Dec 29, 2024 Weighted-average remaining operating lease term (1) 8.7 years 8.6 years Weighted-average operating lease discount rate (1) 3.8 % 3.5 % (1) The fiscal year 2026 amounts exclude Starbucks retail operations in China that were classified as held for sale and the fiscal year 2025 amounts include leases obtained in the acquisition of 23.5 Degrees Topco Limited. Finance lease assets are recorded in property, plant and equipment, net or assets held for sale, and the corresponding lease liabilities are included in accrued liabilities or liabilities held for sale on the consolidated balance sheets. These balances were not material as of December 28, 2025 and September 28, 2025. Finance lease costs were also immaterial for the quarters ended December 28, 2025 and December 29, 2024. Minimum future maturities of operating lease liabilities (in millions) : Fiscal Year Total (1) 2026 (excluding the quarter ended December 28, 2025) $ 1,251.9 2027 1,561.1 2028 1,400.9 2029 1,250.5 2030 1,115.9 Thereafter 4,509.1 Total lease payments 11,089.4 Less imputed interest ( 1,698.9 ) Total $ 9,390.5 21 Table of Contents (1) Balances exclude Starbucks retail operations in China that were classified as held for sale. As of December 28, 2025, we have entered into operating leases that have not yet commenced of $ 639.0 million, primarily related to real estate leases. These leases will commence between fiscal year 2026 and fiscal year 2030 with lease terms ranging from 5 to 20 years. Lease exit costs associated with our restructuring efforts primarily relate to the closure of certain Starbucks company-operated stores. Total lease exit costs of $48.9 million were recorded in restructuring and impairments on the consolidated statement of earnings in the first quarter of fiscal 2026. See Note 17 , Restructuring, for further discussion. Note 10: 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 December 28, 2025 and September 28, 2025, the current and long-term deferred revenue related to the Nestlé up-front payment was $ 177.0 million and $ 5.6 billion, respectively. During each of the quarters ended December 28, 2025 and December 29, 2024, we recognized $ 44.1 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 28, 2025 Total Stored value cards and loyalty program at September 28, 2025 $ 1,751.7 Revenue deferred - card activations, card reloads and Stars earned 4,354.7 Revenue recognized - card and Stars redemptions and breakage ( 3,823.6 ) Other (1) ( 1.3 ) Planned divestiture (2) ( 208.2 ) Stored value cards and loyalty program at December 28, 2025 (3) $ 2,073.3 Quarter Ended December 29, 2024 Total Stored value cards and loyalty program at September 29, 2024 $ 1,718.7 Revenue deferred - card activations, card reloads and Stars earned 4,414.4 Revenue recognized - card and Stars redemptions and breakage ( 3,892.9 ) Other (1) ( 27.1 ) Stored value cards and loyalty program at December 29, 2024 (3) $ 2,213.1 (1) “Other” primarily consists of changes in the stored value cards and loyalty program balances resulting from foreign currency translation. (2) The decrease was a result of Starbucks retail operations in China being classified as held for sale. (3) As of December 28, 2025 and December 29, 2024, approximately $ 1.9 billion and $ 2.1 billion, respectively, of these amounts were current. 22 Table of Contents Note 11: Equity 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 28, 2025 Net gains/(losses) in AOCI, beginning of period $ 0.5 $ 40.9 $ 357.4 $ ( 858.1 ) $ ( 459.3 ) Net gains/(losses) recognized in OCI before reclassifications 0.5 ( 4.5 ) 41.4 21.2 58.6 Net (gains)/losses reclassified from AOCI to earnings 0.2 ( 5.5 ) ( 20.0 ) — ( 25.3 ) Other comprehensive income/(loss) attributable to Starbucks 0.7 ( 10.0 ) 21.4 21.2 33.3 Other comprehensive income/(loss) attributable to NCI — — — 0.1 0.1 Net gains/(losses) in AOCI, end of period $ 1.2 $ 30.9 $ 378.8 $ ( 836.8 ) $ ( 425.9 ) December 29, 2024 Net gains/(losses) in AOCI, beginning of period $ ( 2.3 ) $ 70.5 $ 247.7 $ ( 744.7 ) $ ( 428.8 ) Net gains/(losses) recognized in OCI before reclassifications ( 1.6 ) 51.5 155.1 ( 311.2 ) ( 106.2 ) Net (gains)/losses reclassified from AOCI to earnings 0.2 ( 27.8 ) ( 20.7 ) — ( 48.3 ) Other comprehensive income/(loss) attributable to Starbucks ( 1.4 ) 23.7 134.4 ( 311.2 ) ( 154.5 ) Other comprehensive income/(loss) attributable to NCI — — — ( 0.3 ) ( 0.3 ) Net gains/(losses) in AOCI, end of period $ ( 3.7 ) $ 94.2 $ 382.1 $ ( 1,056.2 ) $ ( 583.6 ) Impact of reclassifications from AOCI on the consolidated statements of earnings (in millions) : Quarter Ended AOCI Components Amounts Reclassified from AOCI Affected Line Item in the Statements of Earnings Dec 28, 2025 Dec 29, 2024 Gains/(losses) on available-for-sale debt securities $ ( 0.2 ) $ ( 0.2 ) Interest income and other, net Gains/(losses) on cash flow hedges 7.3 39.4 Please refer to Note 3 , Derivative Financial Instruments for additional information. Gains/(losses) on net investment hedges 26.7 27.7 Interest expense 33.8 66.9 Total before tax ( 8.5 ) ( 18.6 ) Tax (expense)/benefit $ 25.3 $ 48.3 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 28, 2025. During the quarters ended December 28, 2025 and December 29, 2024 we made no share repurchases. As of December 28, 2025, 29.8 million shares of common stock remained available for repurchase under current authorizations. During the first quarter of fiscal 2026, our Board of Directors approved a quarterly cash dividend to shareholders of $ 0.62 per share to be paid on February 27, 2026 to shareholders of record as of the close of business on February 13, 2026. Note 12: Employee Stock Plans As of December 28, 2025, there we re 66.9 million shares of common stock available for issuance pursuant to future equity-based compensation awards and 8.9 million shares available for issuance under our employee stock purchase plan. 23 Table of Contents Stock-based compensation expense recognized in the consolidated statements of earnings (in millions) : Quarter Ended Dec 28, 2025 Dec 29, 2024 Restricted Stock Units (“RSUs”) $ 126.1 $ 100.6 Total stock-based compensation expense $ 126.1 $ 100.6 RSU transactions from September 28, 2025 through December 28, 2025 ( in millions ): Total Nonvested, September 28, 2025 9.0 Granted 4.2 Vested ( 2.6 ) Forfeited/expired ( 0.1 ) Nonvested, December 28, 2025 10.5 Total unrecognized stock-based compensation expense, net of estimated forfeitures, as of December 28, 2025 $ 452.4 Note 13: Income Taxes The effective tax rate for the quarter ended December 28, 2025 was 61.7 % compared to 23.6 % for the same period in fiscal 2025. The increase was primarily due to the $266 million discrete impact of changes in indefinite reinvestment assertions as a result of classifying our Starbucks retail operations in China as held for sale in the first quarter of fiscal 2026 (approximately 3,500 basis points) and lapping the discrete impact of a tax status change for a certain foreign entity in the first quarter of fiscal 2025 (300 basis points). Note 14: Earnings per Share Calculation of net earnings per common share (“EPS”) — basic and diluted ( in millions, except EPS ): Quarter Ended Dec 28, 2025 Dec 29, 2024 Net earnings attributable to Starbucks $ 293.3 $ 780.8 Weighted average common shares outstanding (for basic calculation) 1,138.0 1,134.7 Dilutive effect of outstanding common stock options and RSUs 3.9 3.7 Weighted average common and common equivalent shares outstanding (for diluted calculation) 1,141.9 1,138.4 EPS — basic $ 0.26 $ 0.69 EPS — diluted $ 0.26 $ 0.69 Potential dilutive shares consist of the incremental common shares issuable upon the exercise of outstanding stock options (both vested and non-vested) and unvested RSUs, calculated using the treasury stock method. The calculation of dilutive shares outstanding excludes anti-dilutive stock options or unvested RSUs, which were immaterial in the periods presented. Note 15: Commitments and Contingencies Legal Proceedings Starbucks is involved in various legal proceedings arising in the ordinary course of business, including litigation matters associated with labor union organizing efforts and certain employment litigation cases that have been certified as class or collective actions, routine liability claims arising from alleged customer injuries, shareholder-related actions, and consumer fraud claims, but is not currently a party to any legal proceeding that management believes could have a material adverse effect on our consolidated financial position, results of operations, or cash flows. While we are closely monitoring the operational and financial impacts of labor union organizing efforts on our business, as of the date of this filing, we believe the risk of a material contingent loss associated with these litigation matters is remote. Refer to the Risk Factors in Part I, Item 1A of our most recently filed 10-K for further discussion of potential risks to our brand and related impacts on our financial results. Note 16: Segment Reporting We have three reportable operating segments: 1) North America, which is inclusive of the U.S. and Canada; 2) International, which is inclusive of China, Japan, Asia Pacific, Europe, Middle East, Africa, Latin America, and the Caribbean; and 3) Channel Development. North America and International operations sell coffee and other beverages, complementary food, packaged coffees, single-serve coffee products, and a focused selection of merchandise through company-operated stores and licensed stores. Our North 24 Table of Contents America segment is our most mature business and has achieved significant scale. Certain markets within our International operations are in various stages of development and may require more extensive support, relative to their current levels of revenue and operating income, than our North America operations. Channel Development revenues include packaged coffee, tea, foodservice products, and ready-to-drink beverage sales to customers outside of our company-operated and licensed stores. Most of our Channel Development revenues are from product sales to, and royalty revenues from, Nestlé through the Global Coffee Alliance. Our CODM evaluates the performance of our operating segments based primarily on net revenues and operating income, which represents earnings before other income and expenses and income taxes. Financial information and forecasts are reviewed by our CODM at the segment level, and are used to evaluate performance, monitor actual results versus forecasts, and allocate resources for the consolidated entity. Our CODM does not use total assets by segment as a basis for decision making. The accounting policies of the operating segments are the same as those described in Note 1, Summary of Significant Accounting Policies and Estimates in Part II, Item 8 of our most recently filed 10-K. Consolidated revenue mix by product type ( in millions ): Quarter Ended Dec 28, 2025 Dec 29, 2024 Beverage (1) $ 5,944.2 60 % $ 5,678.0 60 % Food (2) 1,881.2 19 % 1,790.4 19 % Other (3) 2,089.7 21 % 1,929.4 21 % Total $ 9,915.1 100 % $ 9,397.8 100 % (1) “ Beverage” represents sales within our company-operated stores. (2) “ Food” represents sales within our company-operated stores. (3) “ Other” primarily consists of packaged and single-serve coffees and teas, royalty and licensing revenues, beverage-related ingredients, and serveware, among other items. Information by geographic area ( in millions ): Quarter Ended Dec 28, 2025 Dec 29, 2024 Net revenues (1) : United States $ 7,244.1 $ 6,981.2 China 835.6 756.7 Other countries 1,835.4 1,659.9 Total $ 9,915.1 $ 9,397.8 Dec 28, 2025 Sep 28, 2025 Long-lived assets: United States $ 15,747.5 $ 15,952.7 China (2) 173.9 4,276.8 Other countries 4,284.3 4,407.9 Total $ 20,205.7 $ 24,637.4 (1) Includes Channel Development segment and other net revenues. (2) The fiscal year 2026 balance excludes Starbucks retail operations in China that were classified as held for sale. 25 Table of Contents No customer accounts for 10% or more of our revenues . Revenues are shown based on the geographic location of our customers. Revenues from countries other than the U.S. and China consist primarily of revenues from Japan, Canada, and the U.K., which together account for approximately 71 % and 73 % of net revenues from other countries for the first quarter ended December 28, 2025 and December 29, 2024 , respectively. The financial information below is presented for our reportable operating segments and Corporate and Other (in millions) : Quarter Ended North America International Channel Development Corporate and Other Total December 28, 2025 Total net revenues $ 7,280.5 $ 2,064.9 $ 522.7 $ 47.0 $ 9,915.1 Product and distribution costs 2,135.5 748.1 352.6 37.4 3,273.6 Store operating expenses 3,785.1 767.2 — — 4,552.3 Other operating expenses 59.8 56.8 13.8 0.8 131.2 Depreciation and amortization expenses 298.8 70.1 — 32.0 400.9 General and administrative expenses 94.3 96.0 1.2 447.3 638.8 Restructuring and impairments 40.0 43.6 0.3 4.2 88.1 Total operating expenses 6,413.5 1,781.8 367.9 521.7 9,084.9 Income from equity method investees — ( 0.4 ) 61.0 — 60.6 Operating income/(loss) $ 867.0 $ 282.7 $ 215.8 $ ( 474.7 ) $ 890.8 Interest income and other, net 13.0 Interest expense ( 139.0 ) Earnings before income taxes $ 764.8 Quarter Ended North America International Channel Development Corporate and Other Total December 29, 2024 Total net revenues $ 7,071.9 $ 1,871.3 $ 436.3 $ 18.3 $ 9,397.8 Product and distribution costs 1,967.5 647.0 259.8 19.4 2,893.7 Store operating expenses 3,458.4 744.6 — — 4,203.0 Other operating expenses 78.4 60.7 13.4 — 152.5 Depreciation and amortization expenses 289.0 89.1 — 29.5 407.6 General and administrative expenses 97.3 92.4 2.0 474.1 665.8 Restructuring and impairments — — — — — Total operating expenses 5,890.6 1,633.8 275.2 523.0 8,322.6 Income from equity method investees — ( 0.4 ) 46.9 — 46.5 Operating income/(loss) $ 1,181.3 $ 237.1 $ 208.0 $ ( 504.7 ) $ 1,121.7 Interest income and other, net 27.8 Interest expense ( 127.2 ) Earnings before income taxes $ 1,022.3 Note 17: Restructuring In the fourth quarter of fiscal 2024 , we announced our “Back to Starbucks” strategy, which was implemented with the goal to bring customers back to our stores and return to growth by revitalizing coffeehouses, enhancing the customer experience, and improving efficiency. As part of this strategy, during the second quarter of fiscal 2025 , we further decided and announced our plan to restructure our support organization in an effort to operate more efficiently, increase accountability, reduce complexity, and drive better integration, which resulted in a reduction in our support partner workforce. In the fourth quarter of fiscal 2025 , we announced a restructuring plan involving the closure of coffeehouses and the further transformation of our support organization, as part of the Company’s “Back to Starbucks” strategy. We assessed our existing 26 Table of Contents store portfolio with respect to both whether coffeehouses had a viable path to offering the physical environment consistent with the brand and a clear path to financial performance, and we closed, or plan to close, coffeehouses that did not meet these criteria. During the first quarter of fiscal 2026, 165 stores were closed and approximately $ 88.1 million was recorded to restructuring and impairments on our consolidated statement of earnings. This total consists of accelerated amortization of ROU lease assets and other lease exit costs, disposal and impairment of company-operated store assets, and employee severance, separation and other costs. The table below presents the restructuring and impairment charges by reportable operating segment and Corporate and Other (in millions): Quarter Ended December 28, 2025 North America International Channel Development Corporate and Other Total Disposal and impairment of store assets $ 24.8 $ — $ — $ — $ 24.8 Employee severance, separation and other costs 8.0 1.9 0.3 4.2 14.4 Amortization of ROU lease assets and other lease exit costs 7.2 41.7 — — 48.9 Total Restructuring and impairment costs $ 40.0 $ 43.6 $ 0.3 $ 4.2 $ 88.1 The table below presents the balance of liabilities related to the restructuring plan by major type of cost (in millions): Employee severance, separation and other costs Lease exit and other related costs (1) Total Beginning balance at September 28, 2025 $ 158.9 $ 238.9 $ 397.8 Restructuring costs incurred 14.4 48.9 63.3 Cash payments ( 103.3 ) ( 43.6 ) ( 146.9 ) Planned divestiture (2) ( 6.0 ) ( 5.1 ) ( 11.1 ) Other (3) ( 5.4 ) — ( 5.4 ) Ending balance at December 28, 2025 $ 58.6 $ 239.1 $ 297.7 (1) The operating lease liability balance for total stores under the restructuring plan was $ 284.6 million as of December 28, 2025. (2) The decrease was a result of Starbucks retail operations in China being classified as held for sale. (3) “Other” primarily consists of updates to accrual estimates. As of December 28, 2025 , the majority of the remaining accrued employee separation costs are reflected in accrued payroll and benefits and the remaining accrued lease-related costs are reflected in the operating lease liability on the consolidated balance sheet. The Company estimates that it will incur approximatel y $ 140 million during the remainder of fiscal 2026, primarily related to accelerated ROU lease asset amortization and other lease exit costs in our North America and International operating segments. We anticipate completion of the restructuring plan and remaining store closures within fiscal year 2026. The majority of the accrued liability balance as of December 28, 2025 relates to restructuring charges expected to be paid out by the end of fiscal year 2026. 27 Table of Contents