Item 1. Financial Statements
Item 1. Financial Statements
STARBUCKS CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(in millions, except per share data, unaudited)
Quarter Ended Two Quarters Ended
Mar 29,
2026 Mar 30,
2025 Mar 29,
2026 Mar 30,
2025
Net revenues:
Company-operated stores $ 7,816.4 $ 7,285.0 $ 16,004.4 $ 15,070.3
Licensed stores 1,088.4 1,016.0 2,218.8 2,151.7
Other 626.7 460.6 1,223.4 937.4
Total net revenues 9,531.5 8,761.6 19,446.6 18,159.4
Product and distribution costs 3,208.5 2,737.6 6,482.1 5,631.3
Store operating expenses 4,408.6 4,176.0 8,961.0 8,379.1
Other operating expenses 130.5 138.7 261.7 291.3
Depreciation and amortization expenses 363.4 418.9 764.3 826.2
General and administrative expenses 618.1 632.3 1,256.8 1,298.0
Restructuring and impairments
25.1 116.2 113.2 116.2
Total operating expenses 8,754.2 8,219.7 17,839.1 16,542.1
Income from equity investees 50.8 59.1 111.3 105.5
Operating income 828.1 601.0 1,718.8 1,722.8
Interest income and other, net 37.0 28.4 50.1 56.2
Interest expense ( 137.0 ) ( 127.3 ) ( 276.0 ) ( 254.5 )
Earnings before income taxes 728.1 502.1 1,492.9 1,524.5
Income tax expense 217.3 118.0 688.9 359.4
Net earnings including noncontrolling interests 510.8 384.1 804.0 1,165.1
Net earnings/(loss) attributable to noncontrolling interests
( 0.1 ) ( 0.1 ) ( 0.2 ) 0.1
Net earnings attributable to Starbucks $ 510.9 $ 384.2 $ 804.2 $ 1,165.0
Earnings per share - basic $ 0.45 $ 0.34 $ 0.71 $ 1.03
Earnings per share - diluted $ 0.45 $ 0.34 $ 0.70 $ 1.02
Weighted average shares outstanding:
Basic 1,139.4 1,136.0 1,138.7 1,135.3
Diluted 1,143.2 1,140.0 1,142.6 1,139.2
See Notes to Consolidated Financial Statements.
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STARBUCKS CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions, unaudited)
Quarter Ended Two Quarters Ended
Mar 29,
2026 Mar 30,
2025 Mar 29,
2026 Mar 30,
2025
Net earnings including noncontrolling interests $ 510.8 $ 384.1 $ 804.0 $ 1,165.1
Other comprehensive income/(loss):
Unrealized holding gains/(losses) on available-for-sale debt securities ( 2.8 ) 2.2 ( 2.1 ) 0.1
Tax (expense)/benefit 0.7 ( 0.5 ) 0.5 —
Unrealized gains/(losses) on cash flow hedging instruments 19.0 ( 6.6 ) 14.8 63.0
Tax (expense)/benefit ( 4.5 ) 1.7 ( 4.8 ) ( 16.4 )
Unrealized gains/(losses) on net investment hedging instruments 8.4 13.1 63.8 220.6
Tax (expense)/benefit ( 2.1 ) ( 3.3 ) ( 16.1 ) ( 55.7 )
Translation adjustment and other ( 2.8 ) 90.6 18.5 ( 220.9 )
Reclassification adjustment for net (gains)/losses realized in net earnings for available-for-sale securities, hedging instruments, translation adjustment, and other ( 12.2 ) ( 54.5 ) ( 46.0 ) ( 121.4 )
Tax expense/(benefit) 4.9 11.9 13.4 30.5
Other comprehensive income/(loss), net of tax
8.6 54.6 42.0 ( 100.2 )
Comprehensive income including noncontrolling interests 519.4 438.7 846.0 1,064.9
Comprehensive income/(loss) attributable to noncontrolling interests
— ( 0.1 ) — ( 0.2 )
Comprehensive income attributable to Starbucks $ 519.4 $ 438.8 $ 846.0 $ 1,065.1
See Notes to Consolidated Financial Statements.
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STARBUCKS CORPORATION
CONSOLIDATED BALANCE SHEETS
(in millions, except per share data, unaudited)
Mar 29,
2026 Sep 28,
2025
ASSETS
Current assets:
Cash and cash equivalents $ 1,532.0 $ 3,219.8
Short-term investments 168.3 247.2
Accounts receivable, net 1,288.9 1,277.5
Inventories 2,157.8 2,185.6
Prepaid expenses and other current assets 368.8 452.2
Assets held for sale
5,043.4 —
Total current assets 10,559.2 7,382.3
Long-term investments 306.3 246.9
Equity investments 483.1 466.2
Property, plant and equipment, net 7,188.7 8,493.5
Operating lease, right-of-use asset 8,189.5 9,315.7
Deferred income taxes, net 1,541.8 1,826.9
Other long-term assets 817.8 752.5
Other intangible assets 176.0 166.8
Goodwill 1,295.1 3,368.9
TOTAL ASSETS $ 30,557.5 $ 32,019.7
LIABILITIES AND SHAREHOLDERS’ EQUITY/(DEFICIT)
Current liabilities:
Accounts payable $ 1,674.3 $ 1,852.8
Accrued liabilities 2,168.0 2,359.7
Accrued payroll and benefits 793.9 1,093.9
Current portion of operating lease liability 1,301.2 1,564.5
Stored value card liability and current portion of deferred revenue 1,828.7 1,840.6
Current portion of long-term debt 1,997.7 1,498.9
Liabilities held for sale
1,685.6 —
Total current liabilities 11,449.4 10,210.4
Long-term debt 13,084.2 14,575.9
Operating lease liability 8,008.3 8,972.2
Deferred revenue 5,678.7 5,772.6
Other long-term liabilities 794.6 577.8
Total liabilities 39,015.2 40,108.9
Shareholders’ deficit:
Common stock ($ 0.001 par value) — authorized, 2,400.0 shares; issued and outstanding, 1,139.5 and 1,136.9 shares, respectively
1.1 1.1
Additional paid-in capital 832.1 634.1
Retained deficit ( 8,881.0 ) ( 8,272.5 )
Accumulated other comprehensive income/(loss) ( 417.3 ) ( 459.3 )
Total shareholders’ deficit ( 8,465.1 ) ( 8,096.6 )
Noncontrolling interests 7.4 7.4
Total deficit ( 8,457.7 ) ( 8,089.2 )
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY/(DEFICIT)
$ 30,557.5 $ 32,019.7
See Notes to Consolidated Financial Statements.
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STARBUCKS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions, unaudited)
Two Quarters Ended
Mar 29,
2026 Mar 30,
2025
OPERATING ACTIVITIES:
Net earnings including noncontrolling interests $ 804.0 $ 1,165.1
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization 821.1 867.5
Deferred income taxes, net 363.0 ( 12.4 )
Income earned from equity method investees, net ( 128.0 ) ( 115.5 )
Distributions received from equity method investees 109.7 133.8
Stock-based compensation 219.3 178.3
Non-cash lease costs 675.3 811.6
Loss on disposal, impairment, and accelerated amortization of assets 138.0 82.1
Other ( 2.0 ) 3.4
Cash provided by/(used in) changes in operating assets and liabilities:
Accounts receivable ( 83.4 ) 17.0
Inventories ( 90.4 ) ( 281.0 )
Income taxes payable ( 5.9 ) 6.4
Accounts payable ( 41.4 ) 339.4
Deferred revenue 103.2 65.4
Operating lease liability ( 879.3 ) ( 834.4 )
Other operating assets and liabilities ( 41.0 ) ( 62.7 )
Net cash provided by operating activities 1,962.2 2,364.0
INVESTING ACTIVITIES:
Purchases of investments ( 105.6 ) ( 169.4 )
Sales of investments 16.4 —
Maturities and calls of investments 106.0 141.0
Additions to property, plant and equipment ( 596.4 ) ( 1,282.1 )
Acquisitions, net of cash acquired — ( 177.1 )
Other ( 73.7 ) ( 11.6 )
Net cash used in investing activities ( 653.3 ) ( 1,499.2 )
FINANCING ACTIVITIES:
Net proceeds from issuance of short-term debt 2.5 1.1
Repayments of short-term debt — ( 5.4 )
Repayments of long-term debt ( 1,000.0 ) —
Proceeds from issuance of common stock 36.5 44.4
Cash dividends paid ( 1,411.4 ) ( 1,384.9 )
Minimum tax withholdings on share-based awards ( 60.2 ) ( 76.5 )
Net cash used in financing activities ( 2,432.6 ) ( 1,421.3 )
Effect of exchange rate changes on cash and cash equivalents 5.9 ( 58.3 )
Less: Net change in cash balances classified as assets held for sale ( 570.0 ) —
Net increase/(decrease) in cash and cash equivalents ( 1,687.8 ) ( 614.8 )
CASH AND CASH EQUIVALENTS:
Beginning of period 3,219.8 3,286.2
End of period $ 1,532.0 $ 2,671.4
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest, net of capitalized interest $ 314.4 $ 294.2
Income taxes $ 320.5 $ 459.2
See Notes to Consolidated Financial Statements.
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STARBUCKS CORPORATION
CONSOLIDATED STATEMENTS OF EQUITY
For the Quarter Ended March 29, 2026 and March 30, 2025
(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, December 28, 2025
1,139.1 $ 1.1 $ 721.5 $ ( 8,685.4 ) $ ( 425.9 ) $ ( 8,388.7 ) $ 7.4 $ ( 8,381.3 )
Net earnings — — — 510.9 — 510.9 ( 0.1 ) 510.8
Other comprehensive income/(loss) — — — — 8.5 8.5 0.1 8.6
Stock-based compensation expense — — 94.0 — — 94.0 — 94.0
Exercise of stock options/vesting of RSUs 0.2 — 5.1 — — 5.1 — 5.1
Sale of common stock 0.2 — 11.5 — — 11.5 — 11.5
Cash dividends declared, $ 0.62 per share
— — — ( 706.5 ) — ( 706.5 ) — ( 706.5 )
Other
— — — 0.1 0.1 — 0.1
Balance, March 29, 2026
1,139.5 $ 1.1 $ 832.1 $ ( 8,881.0 ) $ ( 417.3 ) $ ( 8,465.1 ) $ 7.4 $ ( 8,457.7 )
Balance, December 29, 2024
1,135.8 $ 1.1 $ 367.2 $ ( 7,256.4 ) $ ( 583.6 ) $ ( 7,471.7 ) $ 7.1 $ ( 7,464.6 )
Net earnings — — — 384.2 — 384.2 ( 0.1 ) 384.1
Other comprehensive income/(loss) — — — — 54.6 54.6 — 54.6
Stock-based compensation expense — — 78.3 — — 78.3 — 78.3
Exercise of stock options/vesting of RSUs 0.3 — 11.7 — — 11.7 — 11.7
Sale of common stock 0.1 — 13.7 — — 13.7 — 13.7
Cash dividends declared, $ 0.61 per share
— — — ( 693.3 ) — ( 693.3 ) — ( 693.3 )
Other — — — — — — 0.1 0.1
Balance, March 30, 2025
1,136.2 $ 1.1 $ 470.9 $ ( 7,565.5 ) $ ( 529.0 ) $ ( 7,622.5 ) $ 7.1 $ ( 7,615.4 )
See Notes to Consolidated Financial Statements.
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STARBUCKS CORPORATION
CONSOLIDATED STATEMENTS OF EQUITY
For the Two Quarters Ended March 29, 2026 and March 30, 2025
(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 — — — 804.2 — 804.2 ( 0.2 ) 804.0
Other comprehensive income/(loss) — — — — 41.8 41.8 0.2 42.0
Stock-based compensation expense — — 221.7 — — 221.7 — 221.7
Exercise of stock options/vesting of RSUs 2.3 — ( 47.0 ) — — ( 47.0 ) — ( 47.0 )
Sale of common stock 0.3 — 23.3 — — 23.3 — 23.3
Cash dividends declared, $ 1.24 per share
— — — ( 1,412.7 ) — ( 1,412.7 ) — ( 1,412.7 )
Other — — — — 0.2 0.2 — 0.2
Balance, March 29, 2026
1,139.5 $ 1.1 $ 832.1 $ ( 8,881.0 ) $ ( 417.3 ) $ ( 8,465.1 ) $ 7.4 $ ( 8,457.7 )
Balance, September 29, 2024
1,133.5 $ 1.1 $ 322.6 $ ( 7,343.8 ) $ ( 428.8 ) $ ( 7,448.9 ) $ 7.3 $ ( 7,441.6 )
Net earnings — — — 1,165.0 1,165.0 0.1 1,165.1
Other comprehensive income/(loss) — — — — ( 99.9 ) ( 99.9 ) ( 0.3 ) ( 100.2 )
Stock-based compensation expense — — 180.4 — — 180.4 — 180.4
Exercise of stock options/vesting of RSUs 2.4 — ( 59.0 ) — — ( 59.0 ) — ( 59.0 )
Sale of common stock 0.3 — 26.9 — — 26.9 — 26.9
Cash dividends declared, $ 1.22 per share
— — — ( 1,386.7 ) — ( 1,386.7 ) — ( 1,386.7 )
Other — — — — ( 0.3 ) ( 0.3 ) — ( 0.3 )
Balance, March 30, 2025
1,136.2 $ 1.1 $ 470.9 $ ( 7,565.5 ) $ ( 529.0 ) $ ( 7,622.5 ) $ 7.1 $ ( 7,615.4 )
See Notes to Consolidated Financial Statements.
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STARBUCKS CORPORATION
INDEX FOR NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 Summary of Significant Accounting Policies and Estimates
10
Note 2 Acquisitions and Divestitures
12
Note 3 Derivative Financial Instruments
13
Note 4 Fair Value Measurements
17
Note 5 Inventories
19
Note 6 Supplemental Balance Sheet and Statement of Earnings Information
19
Note 7 Other Intangible Assets and Goodwill
20
Note 8 Debt
21
Note 9 Leases
24
Note 10 Deferred Revenue
25
Note 11 Equity
26
Note 12 Employee Stock Plans
27
Note 13 Income Taxes
28
Note 14 Earnings per Share
28
Note 15 Commitments and Contingencies
28
Note 16 Segment Reporting
28
Note 17 Restructuring
31
Note 18 Subsequent Event
33
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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 March 29, 2026, and for the quarters and two quarters ended March 29, 2026 and March 30, 2025, 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 29, 2026, and March 30, 2025, 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 and two quarters ended March 29, 2026, 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.
In the second quarter of fiscal 2026, management approved a restructuring plan to relocate certain functions of our support organization to an additional office in Nashville, Tennessee, further supporting the Company’s “Back to Starbucks” strategy and the intention to establish a more strategic presence in the Southeast region of the United States.
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.
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We initially measure a long-lived asset or disposal group classified as held for sale at the lower of its carrying value or fair value less any costs to sell, and we recognize any resulting 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 acquired a 60% interest in Starbucks retail operations in China. Starbucks retained a 40% interest in the joint venture and continues 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.
On March 30, 2026, in the third quarter of fiscal 2026, the previously announced transaction subsequently closed, and we transitioned from recording revenues and expenses of the disposal group to recording our share of income from the joint venture, recognized as income from equity investees under the equity method of accounting, and recording revenues related to product sales and royalties. The disposal group was deconsolidated from our financial statements and will be reported as part of our licensed portfolio in the third quarter of fiscal 2026. Refer to Note 18 , Subsequent Event, 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.
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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 acquired a 60 % interest in Starbucks retail operations in China. The partial divestiture resulted in the conversion of 7,991 company-operated stores to licensed stores within our International segment. Starbucks retained 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 acquired its interest based on a cash-free, debt-free mutually agreed-upon total enterprise value of approximately $ 4 billion.
In the first quarter of 2026, we determined that the disposal group met the held-for-sale criteria and remained classified as held for sale as of March 29, 2026. Accordingly, we have presented the assets and liabilities of the disposal group as held for sale on the consolidated balance sheets.
As of March 29, 2026, 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 $ 570.0
Accounts receivable, net 63.7
Inventories 112.9
Prepaid expenses and other current assets 54.5
Property, plant and equipment, net 912.4
Operating lease, right-of-use asset 1,075.6
Deferred income taxes, net 98.0
Other long-term assets 56.3
Goodwill 2,100.0
Assets held for sale $ 5,043.4
Accounts payable $ 129.6
Accrued liabilities 119.7
Accrued payroll and benefits 106.0
Current portion of operating lease liability 226.6
Stored value card liability and current portion of deferred revenue 187.5
Short-term debt
2.5
Operating lease liability 829.3
Deferred revenue
16.4
Other long-term liabilities 68.0
Liabilities held for sale $ 1,685.6
On March 30, 2026, in the third quarter of fiscal 2026, the previously announced transaction subsequently closed for total consideration of $ 3.1 billion. We transitioned from recording revenues and expenses of the disposal group to recording our share of income from the joint venture, recognized as income from equity investees under the equity method of accounting, and recording revenues related to product sales and royalties. The disposal group was deconsolidated from our financial statements and will be reported as part of our licensed portfolio in the third quarter of fiscal 2026. Refer to Note 18 , Subsequent Event, for further discussion.
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.
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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.
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.
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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.
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)
Mar 29, 2026 Sep 28, 2025
Cash Flow Hedges:
Coffee $ 27.4 $ 23.3 $ 26.2 9
Foreign currency - other 28.1 19.0 17.6 35
Interest rates 0.4 ( 1.4 ) ( 3.4 ) 0
Net Investment Hedges:
Cross-currency swaps 215.9 206.2 96
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)
Mar 29, 2026 Mar 30, 2025 Mar 29, 2026 Mar 30, 2025
Cash Flow Hedges:
Coffee $ 1.6 $ 0.6 $ ( 17.8 ) $ 17.4 Product and distribution costs
Cross-currency swaps — — — 0.6 Interest income and other, net
Dairy — ( 0.2 ) — — Product and distribution costs
Foreign currency - other 17.4 ( 7.0 ) 5.7 7.4 Licensed stores revenue
1.7 2.6 Product and distribution costs
Interest rates — — ( 1.2 ) ( 1.0 ) Interest expense
Net Investment Hedges:
Cross-currency swaps (1)
8.4 13.1 24.1 27.7 Interest expense
Two Quarters Ended
Gains/(Losses) Recognized in
OCI Before Reclassifications Gains/(Losses) Reclassified from
AOCI to Earnings Location of gain/(loss)
Mar 29, 2026 Mar 30, 2025 Mar 29, 2026 Mar 30, 2025
Cash Flow Hedges:
Coffee $ ( 12.6 ) $ 13.4 $ ( 17.6 ) $ 45.1 Product and distribution costs
Cross-currency swaps — 0.9 — 1.4 Interest income and other, net
Dairy — ( 1.3 ) — 1.4 Product and distribution costs
Foreign currency - other 27.4 50.0 12.4 16.2 Licensed stores revenue
3.3 4.3 Product and distribution costs
Interest rates — — ( 2.4 ) ( 2.0 ) Interest expense
Net Investment Hedges:
Cross-currency swaps (1)
63.8 220.6 50.8 55.4 Interest expense
(1) Gains and losses recognized in earnings relate to components excluded from the assessment of effectiveness.
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Pre-tax gains and losses on non-designated derivatives and designated fair value hedging instruments and the related fair value hedged item recognized in earnings ( in millions ):
Gains/(Losses) Recognized in Earnings
Location of gain/(loss) recognized in earnings Quarter Ended Two Quarters Ended
Mar 29, 2026 Mar 30, 2025 Mar 29, 2026 Mar 30, 2025
Non-Designated Derivatives:
Dairy Interest income and other, net $ — $ — $ — $ 0.1
Cross-currency swaps
Interest income and other, net
( 2.0 ) — ( 2.0 ) —
Foreign currency - other Interest income and other, net 3.5 ( 2.8 ) 5.4 6.1
Diesel fuel and other commodities Interest income and other, net — ( 0.2 ) — ( 0.3 )
Fair Value Hedges:
Interest rate swaps
Interest expense ( 3.7 ) 4.6 ( 4.0 ) ( 8.5 )
Long-term debt (hedged item) Interest expense 2.2 ( 6.8 ) 0.7 3.8
Notional amounts of outstanding derivative contracts (in millions) :
Mar 29, 2026 Sep 28, 2025
Coffee $ 193 $ 387
Cross-currency swaps (1)
1,697 4,197
Diesel fuel and other commodities — 2
Foreign currency - other 976 930
Interest rate swaps 350 350
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Fair value of outstanding derivative contracts ( in millions ) including the location of the asset and/or liability on the consolidated balance sheets:
Derivative Assets
Balance Sheet Location Mar 29, 2026 Sep 28, 2025
Designated Derivative Instruments (2) :
Cross-currency swaps Other long-term assets 379.9 271.9
Foreign currency - other Prepaid expenses and other current assets 21.7 13.0
Other long-term assets 13.4 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 2.3 2.7
Derivative Liabilities
Balance Sheet Location Mar 29, 2026 Sep 28, 2025
Designated Derivative Instruments:
Cross-currency swaps Accrued liabilities $ — $ 5.8
Other long-term liabilities — 3.5
Foreign currency - other Accrued liabilities 0.1 0.2
Other long-term liabilities 0.1 0.2
Interest rate swaps Other long-term liabilities 17.1 17.0
Non-designated Derivative Instruments:
Foreign currency Accrued liabilities 0.5 1.1
Other long-term liabilities — 0.2
(1) The reduction in hedged notional in the current period reflects the maturity and early termination of Net Investment Hedges related to the divestiture of Starbucks retail operations in China. The AOCI will be released to earnings in the third quarter of fiscal 2026 consistent with the timing of the transaction closing.
(2) 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
Mar 29, 2026 Sep 28, 2025 Mar 29, 2026 Sep 28, 2025
Location on the balance sheet
Long-term debt $ 333.4 $ 334.1 $ ( 16.6 ) $ ( 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.
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Note 4: Fair Value Measurements
Assets and liabilities measured at fair value on a recurring basis (in millions) :
Fair Value Measurements at Reporting Date Using
Balance at
Mar 29, 2026 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 $ 1,532.0 $ 1,532.0 $ — $ —
Short-term investments:
Available-for-sale debt securities:
Corporate debt securities 54.2 — 41.9 12.3
Mortgage and other asset-backed securities 0.7 — 0.7 —
State and local government obligations 3.8 — 3.8 —
U.S. government treasury securities 32.3 32.3 — —
Total available-for-sale debt securities 91.0 32.3 46.4 12.3
Marketable equity securities 77.3 77.3 — —
Total short-term investments 168.3 109.6 46.4 12.3
Prepaid expenses and other current assets:
Derivative assets 24.0 — 24.0 —
Long-term investments:
Available-for-sale debt securities:
Corporate debt securities 154.6 — 126.4 28.2
Mortgage and other asset-backed securities 71.3 — 71.3 —
U.S. government treasury securities 80.4 80.4 — —
Total available-for-sale debt securities 306.3 80.4 197.7 28.2
Total long-term investments 306.3 80.4 197.7 28.2
Other long-term assets:
Derivative assets 393.3 — 393.3 —
Total assets 2,423.9 1,722.0 661.4 40.5
Liabilities:
Accrued liabilities:
Derivative liabilities 0.6 — 0.6 —
Other long-term liabilities:
Derivative liabilities 17.2 — 17.2 —
Total liabilities $ 17.8 $ — $ 17.8 $ —
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Fair Value Measurements at Reporting Date Using
Balance at
Sep 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 March 29, 2026, 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 two quarters ended March 29, 2026, and March 30, 2025.
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Note 5: Inventories (in millions) :
Mar 29, 2026 (2)
Sep 28, 2025
Coffee:
Unroasted $ 992.5 $ 911.2
Roasted 425.8 342.0
Other merchandise held for sale (1)
307.0 399.7
Packaging and other supplies 432.5 532.7
Total $ 2,157.8 $ 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 March 29, 2026, we had committed to purchasing green coffee totaling $ 467 million under fixed-price contracts and an estimated $ 497 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
Mar 29, 2026 (1)
Sep 28, 2025
Land $ 54.9 $ 54.9
Buildings 665.7 673.7
Leasehold improvements 10,379.9 11,762.4
Store equipment 3,427.3 3,963.6
Roasting equipment 971.3 982.2
Capitalized software 1,025.9 1,177.7
Furniture, fixtures and other 738.7 893.9
Work in progress 309.1 334.3
Property, plant and equipment, gross 17,572.8 19,842.7
Accumulated depreciation ( 10,384.1 ) ( 11,349.2 )
Property, plant and equipment, net $ 7,188.7 $ 8,493.5
(1) The fiscal year 2026 balances exclude Starbucks retail operations in China that were classified as held for sale.
Accrued Liabilities
Mar 29, 2026 (1)
Sep 28, 2025
Accrued occupancy costs $ 58.2 $ 89.5
Accrued dividends payable 706.4 704.8
Accrued capital and other operating expenditures 760.0 897.0
Insurance reserves
357.4 282.3
Income taxes payable 70.3 150.3
Accrued business taxes 215.7 235.8
Total accrued liabilities $ 2,168.0 $ 2,359.7
(1) The fiscal year 2026 balances exclude Starbucks retail operations in China that were classified as held for sale.
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Store Operating Expenses
Quarter Ended Two Quarters Ended
Mar 29, 2026 Mar 30, 2025 Mar 29, 2026 Mar 30, 2025
Wages and benefits $ 2,645.3 $ 2,406.1 $ 5,304.0 $ 4,795.2
Occupancy costs 768.1 807.2 1,572.9 1,609.3
Other expenses 995.2 962.7 2,084.1 1,974.6
Total store operating expenses $ 4,408.6 $ 4,176.0 $ 8,961.0 $ 8,379.1
Note 7: Other Intangible Assets and Goodwill
Indefinite-Lived Intangible Assets
(in millions) Mar 29, 2026 Sep 28, 2025
Trade names, trademarks and patents $ 79.5 $ 79.5
Finite-Lived Intangible Assets
Mar 29, 2026 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)
$ 312.3 $ ( 235.2 ) $ 77.1 $ 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 130.2 ( 123.9 ) 6.3 131.2 ( 122.9 ) 8.3
Licensing agreements 12.2 ( 12.2 ) — 13.0 ( 13.0 ) —
Other finite-lived intangible assets 18.6 ( 5.5 ) 13.1 20.5 ( 20.5 ) —
Total finite-lived intangible assets $ 500.9 $ ( 404.4 ) $ 96.5 $ 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 $ 1.2 million and $ 2.7 million for the quarter and two quarters ended March 29, 2026, respectively, and $ 5.8 million and $ 11.4 million for the quarter and two quarters ended March 30, 2025, respectively.
Estimated future amortization expense as of March 29, 2026 ( in millions ):
Fiscal Year Total
2026 (excluding the two quarters ended March 29, 2026)
$ 6.1
2027 12.0
2028 8.2
2029 4.9
2030 4.7
Thereafter 60.6
Total estimated future amortization expense $ 96.5
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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
Divestiture (1)
— ( 2,100.0 ) — — ( 2,100.0 )
Other (2)
0.2 26.0 — — 26.2
Goodwill balance at March 29, 2026
$ 490.8 $ 768.6 $ 34.7 $ 1.0 $ 1,295.1
(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 March 29, 2026, we were in compliance with all applicable covenants. No amounts were outstanding under our 2025 credit facility as of March 29, 2026, 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 March 29, 2026, and September 28, 2025. Our total available contractual borrowing capacity for general corporate purposes was $ 3.0 billion as of the end of our second 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 $ 31.3 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 $ 62.6 million, credit facility is currently set to mature on March 27, 2027 . Borrowings under this credit facility are subject to terms defined within the facility and will bear interest at a variable rate based on TIBOR plus an applicable margin of 0.300 %.
As of March 29, 2026, and September 28, 2025, we had no borrowings outstanding under these credit facilities.
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Long-term Debt
Components of long-term debt including the associated interest rates and related estimated fair values by calendar maturity ( in millions, except interest rates) :
Mar 29, 2026 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 $ 1,001.7 4.750 % 4.788 %
June 2026 notes 500.0 498.1 500.0 494.0 2.450 % 2.511 %
February 2027 notes 1,000.0 1,004.6 1,000.0 1,009.8 4.850 % 4.958 %
March 2027 notes 500.0 489.4 500.0 484.7 2.000 % 2.058 %
March 2028 notes 600.0 589.4 600.0 591.9 3.500 % 3.529 %
May 2028 notes 750.0 749.3 750.0 757.1 4.500 % 4.719 %
November 2028 notes 750.0 741.5 750.0 747.9 4.000 % 3.958 %
August 2029 notes (2)
1,000.0 970.0 1,000.0 978.5 3.550 % 3.840 %
March 2030 notes 750.0 684.0 750.0 687.8 2.250 % 3.084 %
May 2030 notes 500.0 503.0 500.0 510.2 4.800 % 4.932 %
November 2030 notes 1,250.0 1,137.5 1,250.0 1,145.9 2.550 % 2.582 %
February 2031 notes 500.0 503.7 500.0 514.2 4.900 % 5.046 %
February 2032 notes 1,000.0 904.8 1,000.0 918.1 3.000 % 3.155 %
February 2033 notes 500.0 495.7 500.0 505.7 4.800 % 3.798 %
February 2034 notes 500.0 498.3 500.0 509.9 5.000 % 5.127 %
May 2035 notes 500.0 505.3 500.0 516.6 5.400 % 5.510 %
June 2045 notes 350.0 282.0 350.0 292.1 4.300 % 4.348 %
December 2047 notes 500.0 362.0 500.0 378.0 3.750 % 3.765 %
November 2048 notes 1,000.0 815.4 1,000.0 849.6 4.500 % 4.504 %
August 2049 notes 1,000.0 802.4 1,000.0 839.5 4.450 % 4.447 %
March 2050 notes 500.0 333.9 500.0 346.0 3.350 % 3.362 %
November 2050 notes 1,250.0 852.5 1,250.0 889.0 3.500 % 3.528 %
Total 15,200.0 13,722.8 16,200.0 14,968.2
Aggregate debt issuance costs and unamortized premium/(discount), net ( 101.5 ) ( 109.3 )
Hedge accounting fair value adjustment (2)
( 16.6 ) ( 15.9 )
Total $ 15,081.9 $ 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.
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The following table summarizes our long-term debt maturities as of March 29, 2026, by fiscal year ( in millions ):
Fiscal Year Total
2026 (excluding the two quarters ended March 29, 2026)
$ 500.0
2027 1,500.0
2028 1,350.0
2029 1,750.0
2030 1,250.0
Thereafter 8,850.0
Total $ 15,200.0
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Note 9: Leases
The components of lease costs (in millions) :
Quarter Ended Two Quarters Ended
Mar 29, 2026 Mar 30, 2025 Mar 29, 2026 Mar 30, 2025
Operating lease costs (1) (2)
$ 406.9 $ 458.4 $ 898.5 $ 917.2
Variable lease costs 315.1 297.5 628.3 590.9
Short-term lease costs 4.6 5.3 9.4 10.8
Total lease costs $ 726.6 $ 761.2 $ 1,536.2 $ 1,518.9
(1) Includes immaterial amounts of sublease income and rent concessions.
(2) The decrease in fiscal 2026 was a result of Starbucks retail operations in China being classified as held for sale during the fiscal quarter, which required us to cease operating lease ROU asset amortization of the related long-lived assets.
The following table includes supplemental information (in millions) :
Two Quarters Ended
Mar 29, 2026 Mar 30, 2025
Cash paid related to operating lease liabilities $ 1,049.2 $ 928.8
Operating lease liabilities arising from obtaining ROU assets (1)
630.0 1,076.6
Mar 29, 2026 Mar 30, 2025
Weighted-average remaining operating lease term (1)
8.6 years 8.6 years
Weighted-average operating lease discount rate (1)
3.8 % 3.6 %
(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 March 29, 2026, and September 28, 2025. Finance lease costs were also immaterial for the quarter and two quarters ended March 29, 2026, and March 30, 2025.
Minimum future maturities of operating lease liabilities (in millions) :
Fiscal Year Total (1)
2026 (excluding the two quarters ended March 29, 2026)
$ 836.2
2027 1,600.2
2028 1,446.8
2029 1,293.0
2030 1,155.2
Thereafter 4,660.7
Total lease payments 10,992.1
Less imputed interest ( 1,682.6 )
Total $ 9,309.5
(1) Balances exclude Starbucks retail operations in China that were classified as held for sale.
As of March 29, 2026, we have entered into operating leases that have not yet commenced of $ 678.5 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. During the quarter and two quarters ended March 29, 2026, total lease exit costs of $ 3.0 million and $ 51.9 million, respectively, were recorded in restructuring and impairments on the consolidated statement of earnings. See Note 17 , Restructuring, for further discussion.
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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 March 29, 2026, the current and long-term deferred revenue related to the Nestlé up-front payment was $ 177.0 million and $ 5.6 billion, respectively. As of September 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 March 29, 2026, and March 30, 2025, we recognized $ 44.1 million of prepaid royalty revenue related to Nestlé. During each of the two quarters ended March 29, 2026, and March 30, 2025, 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 March 29, 2026
Total
Stored value cards and loyalty program at December 28, 2025
$ 2,073.3
Revenue deferred - card activations, card reloads and Stars earned 3,577.0
Revenue recognized - card and Stars redemptions and breakage ( 3,900.8 )
Other (1)
( 4.4 )
Divestiture (2)
8.5
Stored value cards and loyalty program at March 29, 2026 (3)
$ 1,753.6
Quarter Ended March 30, 2025
Total
Stored value cards and loyalty program at December 29, 2024
$ 2,213.1
Revenue deferred - card activations, card reloads and Stars earned 3,496.8
Revenue recognized - card and Stars redemptions and breakage ( 3,862.9 )
Other (1)
6.2
Stored value cards and loyalty program at March 30, 2025 (3)
$ 1,853.2
Two Quarters Ended March 29, 2026
Total
Stored value cards and loyalty program at September 28, 2025
$ 1,751.7
Revenue deferred - card activations, card reloads and Stars earned 7,931.7
Revenue recognized - card and Stars redemptions and breakage ( 7,724.4 )
Other (1)
( 5.7 )
Divestiture (2)
( 199.7 )
Stored value cards and loyalty program at March 29, 2026 (3)
$ 1,753.6
Two Quarters Ended March 30, 2025
Total
Stored value cards and loyalty program at September 29, 2024
$ 1,718.7
Revenue deferred - card activations, card reloads and Stars earned 7,911.2
Revenue recognized - card and Stars redemptions and breakage ( 7,755.8 )
Other (1)
( 20.9 )
Stored value cards and loyalty program at March 30, 2025 (3)
$ 1,853.2
(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 March 29, 2026, and March 30, 2025, approximately $ 1.6 billion and $ 1.7 billion, respectively, of these amounts were current.
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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
March 29, 2026
Net gains/(losses) in AOCI, beginning of period $ 1.2 $ 30.9 $ 378.8 $ ( 836.8 ) $ ( 425.9 )
Net gains/(losses) recognized in OCI before reclassifications ( 2.1 ) 14.5 6.3 ( 2.9 ) 15.8
Net (gains)/losses reclassified from AOCI to earnings 0.2 10.5 ( 18.0 ) — ( 7.3 )
Other comprehensive income/(loss) attributable to Starbucks ( 1.9 ) 25.0 ( 11.7 ) ( 2.9 ) 8.5
Other comprehensive income/(loss) attributable to NCI — — — 0.1 0.1
Net gains/(losses) in AOCI, end of period $ ( 0.7 ) $ 55.9 $ 367.1 $ ( 839.6 ) $ ( 417.3 )
March 30, 2025
Net gains/(losses) in AOCI, beginning of period $ ( 3.7 ) $ 94.2 $ 382.1 $ ( 1,056.2 ) $ ( 583.6 )
Net gains/(losses) recognized in OCI before reclassifications 1.7 ( 4.9 ) 9.8 90.6 97.2
Net (gains)/losses reclassified from AOCI to earnings 0.2 ( 22.0 ) ( 20.8 ) — ( 42.6 )
Other comprehensive income/(loss) attributable to Starbucks 1.9 ( 26.9 ) ( 11.0 ) 90.6 54.6
Net gains/(losses) in AOCI, end of period $ ( 1.8 ) $ 67.3 $ 371.1 $ ( 965.6 ) $ ( 529.0 )
Two Quarters Ended Available-for-Sale Debt Securities Cash Flow Hedges Net Investment Hedges Translation Adjustment and Other Total
March 29, 2026
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 ( 1.6 ) 10.0 47.7 18.3 74.4
Net (gains)/losses reclassified from AOCI to earnings 0.4 5.0 ( 38.0 ) ( 32.6 )
Other comprehensive income/(loss) attributable to Starbucks ( 1.2 ) 15.0 9.7 18.3 41.8
Other comprehensive income/(loss) attributable to NCI — — — 0.2 0.2
Net gains/(losses) in AOCI, end of period $ ( 0.7 ) $ 55.9 $ 367.1 $ ( 839.6 ) $ ( 417.3 )
March 30, 2025
Net gains/(losses) in AOCI, beginning of period $ ( 2.3 ) $ 70.5 $ 247.7 $ ( 744.7 ) $ ( 428.8 )
Net gains/(losses) recognized in OCI before reclassifications 0.1 46.6 164.9 ( 220.6 ) ( 9.0 )
Net (gains)/losses reclassified from AOCI to earnings 0.4 ( 49.8 ) ( 41.5 ) — ( 90.9 )
Other comprehensive income/(loss) attributable to Starbucks 0.5 ( 3.2 ) 123.4 ( 220.6 ) ( 99.9 )
Other comprehensive income/(loss) attributable to NCI — — — ( 0.3 ) ( 0.3 )
Net gains/(losses) in AOCI, end of period $ ( 1.8 ) $ 67.3 $ 371.1 $ ( 965.6 ) $ ( 529.0 )
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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
Mar 29, 2026 Mar 30, 2025
Gains/(losses) on available-for-sale debt securities $ ( 0.3 ) $ ( 0.2 ) Interest income and other, net
Gains/(losses) on cash flow hedges ( 11.6 ) 27.0 Please refer to Note 3 , Derivative Financial Instruments for additional information.
Gains/(losses) on net investment hedges 24.1 27.7 Interest expense
12.2 54.5 Total before tax
( 4.9 ) ( 11.9 ) Tax (expense)/benefit
$ 7.3 $ 42.6 Net of tax
Two Quarters Ended
AOCI
Components Amounts Reclassified from AOCI Affected Line Item in
the Statements of Earnings
Mar 29, 2026 Mar 30, 2025
Gains/(losses) on available-for-sale debt securities $ ( 0.5 ) $ ( 0.4 ) Interest income and other, net
Gains/(losses) on cash flow hedges ( 4.3 ) 66.4 Please refer to Note 3 , Derivative Financial Instruments for additional information.
Gains/(losses) on net investment hedges 50.8 55.4 Interest expense
46.0 121.4 Total before tax
( 13.4 ) ( 30.5 ) Tax (expense)/benefit
$ 32.6 $ 90.9 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 March 29, 2026.
During the two quarters ended March 29, 2026, and March 30, 2025, we made no share repurchases. As of March 29, 2026, 29.8 million shares of common stock remained available for repurchase under current authorizations.
During the second quarter of fiscal 2026, our Board of Directors approved a quarterly cash dividend to shareholders of $ 0.62 per share to be paid on May 29, 2026, to shareholders of record as of the close of business on May 15, 2026.
Note 12: Employee Stock Plans
As of March 29, 2026 , there were 67.3 million shares of common stock available for issuance pursuant to future equity-based compensation awards and 8.8 million sh ares available for issuance under our employee stock purchase plan.
Stock-based compensation expense recognized in the consolidated statements of earnings (in millions) :
Quarter Ended Two Quarters Ended
Mar 29, 2026 Mar 30, 2025 Mar 29, 2026 Mar 30, 2025
Restricted Stock Units (“RSUs”) $ 93.2 $ 77.8 $ 219.3 $ 178.3
Total stock-based compensation expense $ 93.2 $ 77.8 $ 219.3 $ 178.3
RSU transactions from September 28, 2025 through March 29, 2026 ( in millions ):
Total
Nonvested, September 28, 2025
9.0
Granted 4.4
Vested
( 2.7 )
Forfeited/expired ( 0.5 )
Nonvested, March 29, 2026
10.2
Total unrecognized stock-based compensation expense, net of estimated forfeitures, as of March 29, 2026
$ 364.8
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Note 13: Income Taxes
The effective tax rate for the quarter ended March 29, 2026, was 29.8 % compared to 23.5 % for the same period in fiscal 2025. The increase was primarily due to the impact of reorganizing certain entities in China (approximately 280 basis points), the $8 million discrete increase to the change in indefinite reinvestment assertions as a result of classifying the Starbucks retail operations in China as held for sale in the first quarter of fiscal 2026 (approximately 110 basis points), and the effect of higher pre-tax earnings and the proportionate impacts from certain permanent differences and discrete items.
The effective tax rate for the two quarters ended March 29, 2026, was 46.1 % compared to 23.6 % for the same period in fiscal 2025. The increase was primarily due to the $273 million discrete impact of changes in indefinite reinvestment assertions as a result of classifying Starbucks retail operations in China as held for sale in the first quarter of fiscal 2026 (approximately 1,830 basis points), lapping the discrete impact of a tax status change for a certain foreign entity in the first quarter of fiscal 2025 (approximately 200 basis points), and the impact of reorganizing certain entities in China (approximately 130 basis points).
Note 14: Earnings per Share
Calculation of net earnings per common share (“EPS”) — basic and diluted ( in millions, except EPS ):
Quarter Ended Two Quarters Ended
Mar 29, 2026 Mar 30, 2025 Mar 29, 2026 Mar 30, 2025
Net earnings attributable to Starbucks $ 510.9 $ 384.2 $ 804.2 $ 1,165.0
Weighted average common shares outstanding (for basic calculation) 1,139.4 1,136.0 1,138.7 1,135.3
Dilutive effect of outstanding common stock options and RSUs 3.8 4.0 3.9 3.9
Weighted average common and common equivalent shares outstanding (for diluted calculation) 1,143.2 1,140.0 1,142.6 1,139.2
EPS — basic $ 0.45 $ 0.34 $ 0.71 $ 1.03
EPS — diluted $ 0.45 $ 0.34 $ 0.70 $ 1.02
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 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.
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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 Two Quarters Ended
Mar 29, 2026 Mar 30, 2025 Mar 29, 2026 Mar 30, 2025
Beverage (1)
$ 5,659.0 59 % $ 5,293.6 60 % $ 11,603.4 60 % $ 10,971.6 60 %
Food (2)
1,830.6 19 % 1,691.9 19 % 3,712.0 19 % 3,482.3 19 %
Other (3)
2,041.9 22 % 1,776.1 21 % 4,131.2 21 % 3,705.5 21 %
Total $ 9,531.5 100 % $ 8,761.6 100 % $ 19,446.6 100 % $ 18,159.4 100 %
(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, serveware, and ready to drink beverages, among other items.
Information by geographic area ( in millions ):
Quarter Ended
Two Quarters Ended
Mar 29, 2026 Mar 30, 2025 Mar 29, 2026 Mar 30, 2025
Net revenues (1) :
United States $ 6,930.3 $ 6,403.5 $ 14,174.3 $ 13,384.7
China
809.2 752.1 1,644.9 1,508.8
Other countries 1,792.0 1,606.0 3,627.4 3,265.9
Total $ 9,531.5 $ 8,761.6 $ 19,446.6 $ 18,159.4
Mar 29, 2026 Sep 28, 2025
Long-lived assets:
United States $ 15,645.7 $ 15,952.7
China (2)
170.6 4,276.8
Other countries 4,182.0 4,407.9
Total $ 19,998.3 $ 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.
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 72 % of net revenues from other countries for the quarter and two quarters ended March 29, 2026, and 74 % for the quarter and two quarters ended March 30, 2025, respectively.
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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
March 29, 2026
Total net revenues $ 6,893.8 $ 2,051.1 $ 567.8 $ 18.8 $ 9,531.5
Product and distribution costs 2,068.8 749.7 370.5 19.5 3,208.5
Store operating expenses
3,691.9 716.7 — — 4,408.6
Other operating expenses 56.0 55.6 17.7 1.2 130.5
Depreciation and amortization expenses 299.5 32.6 — 31.3 363.4
General and administrative expenses 92.4 89.0 0.7 436.0 618.1
Restructuring and impairments 5.3 8.8 ( 0.1 ) 11.1 25.1
Total operating expenses
6,213.9 1,652.4 388.8 499.1 8,754.2
Income from equity method investees — ( 0.1 ) 50.9 — 50.8
Operating income/(loss) $ 679.9 $ 398.6 $ 229.9 $ ( 480.3 ) $ 828.1
Interest income and other, net 37.0
Interest expense ( 137.0 )
Earnings before income taxes $ 728.1
Quarter Ended
North America International Channel
Development
Corporate and Other
Total
March 30, 2025
Total net revenues $ 6,472.7 $ 1,867.1 $ 409.0 $ 12.8 $ 8,761.6
Product and distribution costs 1,807.1 659.8 257.7 13.0 2,737.6
Store operating expenses 3,431.6 744.4 — — 4,176.0
Other operating expenses 68.6 55.1 15.0 — 138.7
Depreciation and amortization expenses 299.2 89.0 — 30.7 418.9
General and administrative expenses 96.6 84.8 1.2 449.7 632.3
Restructuring and impairments
21.3 16.8 0.9 77.2 116.2
Total operating expenses
5,724.4 1,649.9 274.8 570.6 8,219.7
Income from equity method investees — ( 0.2 ) 59.3 — 59.1
Operating income/(loss) $ 748.3 $ 217.0 $ 193.5 $ ( 557.8 ) $ 601.0
Interest income and other, net 28.4
Interest expense ( 127.3 )
Earnings before income taxes $ 502.1
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Two Quarters Ended
North America International Channel
Development
Corporate and Other
Total
March 29, 2026
Total net revenues $ 14,174.3 $ 4,116.0 $ 1,090.5 $ 65.8 $ 19,446.6
Product and distribution costs 4,204.3 1,497.8 723.1 56.9 6,482.1
Store operating expenses
7,477.0 1,484.0 — — 8,961.0
Other operating expenses 115.8 112.3 31.5 2.1 261.7
Depreciation and amortization expenses 598.3 102.7 — 63.3 764.3
General and administrative expenses 186.7 184.9 1.9 883.3 1,256.8
Restructuring and impairments 45.3 52.4 0.1 15.4 113.2
Total operating expenses
12,627.4 3,434.1 756.6 1,021.0 17,839.1
Income from equity method investees — ( 0.5 ) 111.8 — 111.3
Operating income/(loss) $ 1,546.9 $ 681.4 $ 445.7 $ ( 955.2 ) $ 1,718.8
Interest income and other, net 50.1
Interest expense ( 276.0 )
Earnings before income taxes $ 1,492.9
Two Quarters Ended
North America International Channel
Development
Corporate and Other
Total
March 30, 2025
Total net revenues $ 13,544.6 $ 3,738.4 $ 845.3 $ 31.1 $ 18,159.4
Product and distribution costs 3,774.6 1,306.8 517.5 32.4 5,631.3
Store operating expenses 6,890.1 1,489.0 — — 8,379.1
Other operating expenses 147.0 115.7 28.4 0.2 291.3
Depreciation and amortization expenses 588.1 178.1 — 60.0 826.2
General and administrative expenses 193.9 177.2 3.1 923.8 1,298.0
Restructuring and impairments
21.3 16.8 0.9 77.2 116.2
Total operating expenses
11,615.0 3,283.6 549.9 1,093.6 16,542.1
Income from equity method investees — ( 0.7 ) 106.2 — 105.5
Operating income/(loss) $ 1,929.6 $ 454.1 $ 401.6 $ ( 1,062.5 ) $ 1,722.8
Interest income and other, net $ 56.2
Interest expense ( 254.5 )
Earnings before income taxes $ 1,524.5
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. During the quarter and two quarters ended March 30, 2025, we recognized pre-tax restructuring charges of $ 116.2 million, primarily associated with partner severance costs. These costs were recorded to restructuring and impairments on our consolidated statement of earnings.
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.
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During the quarter and two quarters ended March 29, 2026, 62 and 227 stores, respectively, were closed, and approximately $ 25.1 million and $ 113.2 million, respectively, 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.
In the second quarter of fiscal 2026, management approved a restructuring plan to relocate certain functions of our support organization to an additional office in Nashville, Tennessee, further supporting the Company’s “Back to Starbucks” strategy and the intention to establish a more strategic presence in the Southeast region of the United States. Restructuring charges under this plan were immaterial during the quarter ended March 29, 2026.
The tables below present the restructuring and impairment charges by reportable operating segment and Corporate and Other ( in millions ):
Quarter Ended March 29, 2026
North America International Channel
Development
Corporate and Other
Total
Disposal and impairment of store assets $ 14.2 $ 0.1 $ — $ — $ 14.3
Employee severance, separation and other costs ( 6.4 ) 3.2 ( 0.1 ) 11.1 7.8
Amortization of ROU lease assets and other lease exit costs
( 2.5 ) 5.5 — — 3.0
Total Restructuring and impairment costs
$ 5.3 $ 8.8 $ ( 0.1 ) $ 11.1 $ 25.1
Two Quarters Ended March 29, 2026
North America International Channel
Development
Corporate and Other
Total
Disposal and impairment of store assets $ 39.0 $ 0.1 $ — $ — $ 39.1
Employee severance, separation and other costs 1.6 5.1 0.1 15.4 22.2
Amortization of ROU lease assets and other lease exit costs
4.7 47.2 — — 51.9
Total Restructuring and impairment costs
$ 45.3 $ 52.4 $ 0.1 $ 15.4 $ 113.2
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
22.2 51.9 74.1
Cash payments
( 137.9 ) ( 93.0 ) ( 230.9 )
Divestiture (2)
( 2.6 ) ( 1.9 ) ( 4.5 )
Other (3)
( 14.2 ) — ( 14.2 )
Ending balance at March 29, 2026
$ 26.4 $ 195.9 $ 222.3
(1) The operating lease liability balance for total stores under the restructuring plan was $ 243.2 million as of March 29, 2026.
(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 March 29, 2026 , 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.
We anticipate substantial completion of the fiscal 2025 restructuring plan and remaining store closures within fiscal year 2026. The Company estimates that it will incur approximatel y $ 150 million related to that plan during the remainder of fiscal 2026, primarily related to other lease exit costs and accelerated ROU lease asset amortization in our North America operating segment. The majority of the accrued liability balance as of March 29, 2026, relates to restructuring charges expected to be paid out by the end of fiscal year 2026.
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Note 18: Subsequent Event
On March 30, 2026, following completion of the second fiscal quarter of 2026, we closed the previously announced divestiture of 60 % of our Starbucks retail operations in China to Boyu Capital, our joint venture partner, for total consideration of $ 3.1 billion . Starbucks retained a 40 % interest in the joint venture and continues to own and license the Starbucks brand and intellectual property to the new entity. The partial divestiture resulted in the conversion of 7,991 company-operated stores to licensed stores within our International segment. We currently plan to use the proceeds for debt reduction, strengthening our balance sheet, and allowing us to execute our long-term growth strategy with greater financial flexibility. As of March 29, 2026, all assets and liabilities related to the retail operations in China were classified as held for sale within the Company’s Consolidated Balance Sheets. See Note 2 , Acquisitions and Divestitures, for further discussion. While the Company is still evaluating the effects the transaction will have on its fiscal third quarter financial results, we anticipate recognizing a material pre-tax gain on the sale. Following the closing, we transitioned from recording revenues and expenses of the disposal group to recording our share of income from the joint venture, recognized as income from equity investees under the equity method of accounting, and recording revenues related to product sales and royalties. The disposal group was deconsolidated from our financial statements and will be reported as part of our licensed portfolio in the third quarter of fiscal 2026.
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.