Starbucks SBUX Form 10-Q filing Q3 FY2026

PART I. FINANCIAL INFORMATION

Item 1 Financial Statements (Unaudited) 3

Consolidated Statements of Earnings 3

Consolidated Statements of Comprehensive Income 4

Consolidated Balance Sheets 5

Consolidated Statements of Cash Flows 6

Consolidated Statements of Equity 7

Index for Notes to Consolidated Financial Statements 9

Notes to Consolidated Financial Statements 10

Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations 36

Item 3 Quantitative and Qualitative Disclosures About Market Risk 54

Item 4 Controls and Procedures 54

PART II. OTHER INFORMATION

Item 1 Legal Proceedings 55

Item 1A Risk Factors 55

Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 55

Item 3 Defaults Upon Senior Securities 55

Item 4 Mine Safety Disclosures 55

Item 5 Other Information 55

Item 6 Exhibits 56

Signatures 57

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PART I — FINANCIAL INFORMATION

Item 1.Financial Statements

See Notes to Consolidated Financial Statements.

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See Notes to Consolidated Financial Statements.

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See Notes to Consolidated Financial Statements.

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See Notes to Consolidated Financial Statements.

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STARBUCKS CORPORATION

CONSOLIDATED STATEMENTS OF EQUITY

For the Quarter Ended June 28, 2026, and June 29, 2025

(in millions, except per share data, unaudited)

See Notes to Consolidated Financial Statements.

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STARBUCKS CORPORATION

CONSOLIDATED STATEMENTS OF EQUITY

For the Three Quarters Ended June 28, 2026, and June 29, 2025

(in millions, except per share data, unaudited)

See Notes to Consolidated Financial Statements.

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STARBUCKS CORPORATION

INDEX FOR NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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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 June 28, 2026, and for the quarters and three quarters ended June 28, 2026 and June 29, 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 three quarters ended June 28, 2026, and June 29, 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 three quarters ended June 28, 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 the Company’s “Back to Starbucks” strategy, the following restructuring plans were approved.

Fiscal 2025 Restructuring Plans

In the second quarter of fiscal 2025, we announced a fiscal 2025 restructuring 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 an additional fiscal 2025 restructuring plan involving the closure of coffeehouses and the further transformation of our support organization. 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.

Fiscal 2026 Restructuring Plans

In the second quarter of fiscal 2026, management approved a fiscal 2026 restructuring plan to relocate certain functions of our support organization to an additional office in Nashville, Tennessee, with the intention to establish a more strategic presence in the Southeast region of the United States.

In the third quarter of fiscal 2026, we announced an additional fiscal 2026 restructuring plan focused on further transformation of our global support organization and non-retail facilities, as well as reducing the future operational complexity of our Starbucks Reserve and Roastery locations resulting in a reassessment and impairment of the associated asset group.

Refer to Note 17, Restructuring and Impairments, 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;

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• 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 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”). During the first and second quarters of fiscal 2026, 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.

On March 30, 2026, in the third quarter of fiscal 2026, the previously announced transaction closed, and as such, the disposal group was no longer classified as held for sale on the consolidated balance sheets. 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. We have substantially completed our evaluation of these amendments and expect the adoption to result in expanded income tax disclosures, including an enhanced rate reconciliation and cash income taxes paid disclosures. We do not expect the adoption to have a material impact on our consolidated financial statements.

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

On March 30, 2026, we completed the divestiture of Starbucks retail operations in China (“the disposal group”), which marked a significant milestone in the Company’s long-term strategy to unlock sustainable, disciplined growth in China.

Under the agreement, Boyu Capital acquired a 60% interest in Starbucks retail operations in China based on a cash-free, debt-free mutually agreed-upon total enterprise value of approximately $4 billion. The transaction was partially financed with debt issued by the newly formed joint venture and we received total consideration with respect to the transaction of $3.1 billion, inclusive of our share of the debt proceeds. Starbucks retained a 40% interest of approximately $1.2 billion, accounted for under the equity method of accounting. Our carrying value of the retained investment includes the impact of debt raised by the joint venture in conjunction with the transaction. The Company derecognized net assets with a carrying value of $3.4 billion, and reclassified approximately $282.8 million of cumulative translation adjustment (“CTA”) losses and net investment hedge losses of $99.7 million from accumulated other comprehensive income into earnings. As a result, we recognized a pre-tax gain of $536.3 million, which was included in net gain resulting from divestiture of certain operations on our consolidated statements of earnings.

Total incremental income tax expense associated with the divestiture gain is approximately $198.6 million, of which approximately $147.8 million was recognized in the third quarter of fiscal 2026, with the remainder expected to be recognized in the fourth quarter of fiscal 2026. The income tax expense is a component of the estimated annual effective tax rate and, accordingly, is recognized in proportion to year-to-date ordinary pre-tax income. We also recognized transaction costs of approximately $44.1 million and $73.8 million for the quarter and three quarters ended June 28, 2026, respectively.

Upon completion of the divestiture, the disposal group was deconsolidated from our financial statements and 7,991 company-operated stores previously included in the disposal group were converted to licensed stores within our International segment. We will continue to own and license the Starbucks brand and intellectual property to the joint venture.

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 to, and royalty revenues from, the joint venture. For the third quarter of fiscal 2026, revenues generated from the joint venture were $52.5 million and related product and distribution costs were $18.5 million. Accounts receivable from the joint venture as of June 28, 2026, was $30.7 million, on our consolidated balance sheets, primarily related to product sales to, and royalty revenues from, the joint venture. As of June 28, 2026, the carrying value of this investment was $1.2 billion.

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.

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.

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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.

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):

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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):

(1) Gains and losses recognized in earnings relate to components excluded from the assessment of effectiveness.

(2) Net investment hedge losses accumulated in AOCI were reclassified to earnings due to the divestiture of Starbucks retail operations in China in the third quarter of fiscal 2026.

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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):

Notional amounts of outstanding derivative contracts (in millions):

(1) The reduction in hedged notional reflects the maturity and early termination of net investment hedges in the second quarter of fiscal 2026 related to the divestiture of Starbucks retail operations in China. The net investment hedge losses accumulated in AOCI were reclassified from AOCI to earnings in the third quarter of fiscal 2026 consistent with the timing of the transaction closing.

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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:

(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):

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):

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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 and marketable equity securities were not material as of June 28, 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 three quarters ended June 28, 2026, and June 29, 2025.

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Note 5: Inventories (in millions):

(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) Balances exclude Starbucks retail operations in China that were divested during the third quarter of fiscal 2026.

As of June 28, 2026, we had committed to purchasing green coffee totaling $383 million under fixed-price contracts and an estimated $440 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

(1) Balances exclude Starbucks retail operations in China that were divested in the third quarter of fiscal 2026.

Accrued Liabilities

(1) Balances exclude Starbucks retail operations in China that were divested in the third quarter of fiscal 2026.

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Store Operating Expenses

Note 7: Other Intangible Assets and Goodwill

Indefinite-Lived Intangible Assets

Finite-Lived Intangible Assets

(1) The decrease in acquired and reacquired rights was a result of divesting Starbucks retail operations in China in the third quarter of fiscal 2026.

Amortization expense for finite-lived intangible assets was $2.9 million and $5.6 million for the quarter and three quarters ended June 28, 2026, respectively, and $4.4 million and $15.8 million for the quarter and three quarters ended June 29, 2025, respectively.

Estimated future amortization expense as of June 28, 2026 (in millions):

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Goodwill

Changes in the carrying amount of goodwill by reportable operating segment (in millions):

(1) The decrease in the International segment was a result of divesting Starbucks retail operations in China in the third quarter of fiscal 2026.

(2)“Other” consists primarily of changes in the goodwill balance resulting from foreign currency translation.

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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 June 28, 2026, we were in compliance with all applicable covenants. No amounts were outstanding under our 2025 credit facility as of June 28, 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 June 28, 2026, and September 28, 2025. Our total available contractual borrowing capacity for general corporate purposes was $3.0 billion as of the end of our third quarter of fiscal 2026.

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

• A ¥5.0 billion, or $30.9 million, credit facility is currently set to mature on December 30, 2026. Borrowings under this credit facility are subject to terms defined within the facility and will bear interest at a variable rate based on Tokyo Interbank Offered Rate (“TIBOR”) plus an applicable margin of 0.400%.
• A ¥10.0 billion, or $61.8 million, credit facility is currently set to mature on March 27, 2027. Borrowings under this credit facility are subject to terms defined within the facility and will bear interest at a variable rate based on TIBOR plus an applicable margin of 0.300%.

As of June 28, 2026, and September 28, 2025, we had no borrowings outstanding under these credit facilities.

Long-term Debt

In May 2026, the Company completed cash tender offers for certain series of its senior notes and repurchased approximately $1.3 billion aggregate principal amount of such notes using cash proceeds from the divestiture of Starbucks retail operations in China. The notes repurchased consisted of:

• $273.5 million of the $750.0 million, 4.500% Senior Notes (the “May 2028 notes”)
• $321.8 million of the $500.0 million, 4.800% Senior Notes (the “May 2030 notes”)
• $110.4 million of the $500.0 million, 5.000% Senior Notes (the “February 2034 notes”)
• $410.2 million of the $500.0 million, 5.400% Senior Notes (the “May 2035 notes”)
• $200.0 million of the $1.0 billion, 4.500% Senior Notes (the “November 2048 notes”)

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In connection with the redemptions, the Company recognized an immaterial gain on partial extinguishment of debt for the quarter ended June 28, 2026, which is included in Interest income and other, net in the consolidated statement of earnings. In determining the value of the gain, the Company expensed the proportional amount of the related unamortized discount, premium, and debt issuance costs attributable to the repurchased notes.

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

(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 June 28, 2026, by fiscal year (in millions):

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Note 9: Leases

The components of lease costs (in millions):

(1) Includes immaterial amounts of sublease income and rent concessions.

The following table includes supplemental information (in millions):

(1) The fiscal 2026 amounts exclude Starbucks retail operations in China that were divested during the third quarter of fiscal 2026, and the fiscal 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 with the corresponding lease liabilities included in accrued liabilities on the consolidated balance sheets. These balances were not material as of June 28, 2026, and September 28, 2025. Finance lease costs were also immaterial for the quarter and three quarters ended June 28, 2026, and June 29, 2025.

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

(1) Balances exclude Starbucks retail operations in China that were divested in the third quarter of fiscal 2026.

As of June 28, 2026, we have entered into operating leases that have not yet commenced of $583.4 million, primarily related to real estate leases. These leases will commence between fiscal year 2026 and fiscal year 2030 with lease terms ranging from 10 to 20 years.

During the quarter and three quarters ended June 28, 2026, total lease costs of $112.9 million and $164.8 million, respectively, were recorded in restructuring and impairments on the consolidated statement of earnings. Lease costs associated with our restructuring efforts primarily relate to the impairment of ROU assets and the closure of certain Starbucks company-operated stores. See Note 17, Restructuring and Impairments, 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 June 28, 2026, the current and long-term deferred revenue related to the Nestlé up-front payment was $177.0 million and $5.5 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 June 28, 2026, and June 29, 2025, we recognized $44.1 million of prepaid royalty revenue related to Nestlé. During each of the three quarters ended June 28, 2026, and June 29, 2025, we recognized $132.3 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):

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

(2) The balance excludes Starbucks retail operations in China that were classified as held for sale in the first quarter of fiscal 2026 and divested in the third quarter of fiscal 2026.

(3) As of June 28, 2026 and June 29, 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):

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

(1) Reclassification of CTA from AOCI to earnings upon sale or liquidation of foreign businesses.

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 June 28, 2026.

During the three quarters ended June 28, 2026, and June 29, 2025, we made no share repurchases. As of June 28, 2026, 29.8 million shares of common stock remained available for repurchase under current authorizations.

During the third quarter of fiscal 2026, our Board of Directors approved a quarterly cash dividend to shareholders of $0.62 per share to be paid on August 28, 2026, to shareholders of record as of the close of business on August 14, 2026.

Note 12: Employee Stock Plans

As of June 28, 2026, there were 69.6 million shares of common stock available for issuance pursuant to future equity-based compensation awards and 8.7 million shares available for issuance under our employee stock purchase plan.

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

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RSU transactions from September 28, 2025 through June 28, 2026 (in millions):

Note 13: Income Taxes

The effective tax rate for the quarter ended June 28, 2026, was 26.4% compared to 31.8% for the same period in fiscal 2025. The decrease was primarily due to lapping the discrete impact of changes in indefinite reinvestment assertions for certain foreign entities in the third quarter of fiscal 2025 (approximately 850 basis points), partially offset by impacts resulting from the divestiture of Starbucks retail operations in China in the third quarter of fiscal 2026 (370 basis points).

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

Note 14: Earnings per Share

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

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.

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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.

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):

(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):

(1) Includes Channel Development segment and other net revenues.

(2) The fiscal year 2026 balance excludes Starbucks retail operations in China that were divested during the third quarter of fiscal 2026.

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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 three quarters ended June 28, 2026, and 73% for the quarter and three quarters ended June 29, 2025, respectively.

The financial information below is presented for our reportable operating segments and Corporate and Other (in millions):

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Note 17: Restructuring and Impairments

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 the Company’s “Back to Starbucks” strategy, the following restructuring plans were approved.

Fiscal 2025 Restructuring Plans

In the second quarter of fiscal 2025, we announced a fiscal 2025 restructuring 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 an additional fiscal 2025 restructuring plan involving the closure of coffeehouses and the further transformation of our support organization. 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 three quarters ended June 28, 2026, 20 and 247 stores, respectively, were closed, and approximately $10.0 million and $115.9 million, respectively, was recorded to restructuring and impairments on our consolidated statement of earnings related to our fiscal 2025 restructuring plans. 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.

During the quarter and three quarters ended June 29, 2025, we recognized pre-tax restructuring charges of $20.8 million and $137.0 million, respectively, primarily associated with partner severance costs. These costs were recorded to restructuring and impairments on our consolidated statement of earnings.

Fiscal 2026 Restructuring Plans

In the second quarter of fiscal 2026, management approved a fiscal 2026 restructuring plan to relocate certain functions of our support organization to an additional office in Nashville, Tennessee, with the intention to establish a more strategic presence in the Southeast region of the United States.

In the third quarter of fiscal 2026, we announced an additional fiscal 2026 restructuring plan focused on further transformation of our global support organization and non-retail facilities, as well as reducing the future operational complexity of our Starbucks Reserve and Roastery locations resulting in a reassessment and impairment of the associated asset group.

During the quarter and three quarters ended June 28, 2026, we recognized pre-tax restructuring charges of $292.6 million and $299.9 million, respectively, to restructuring and impairments on our consolidated statement of earnings related to our fiscal 2026 restructuring plans. This total consists of disposal and impairment of company-operated store assets primarily associated with the impairment of Starbucks Reserve and Roastery store locations, and employee severance, separation and other costs.

The tables below present the restructuring and impairment charges by fiscal year restructuring plans, reportable operating segment, and Corporate and Other (in millions):

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The table below presents the balance of liabilities related to the restructuring plans by major type of cost (in millions):

(1) The operating lease liability balances for total stores under the fiscal 2025 and fiscal 2026 restructuring plans were $183.1 million and $6.9 million, respectively, as of June 28, 2026.

(2) The decrease was a result of divesting Starbucks retail operations in China during the third quarter of fiscal 2026 .

(3) “Other” primarily consists of updates to accrual estimates and adjustments for non-cash charges.

As of June 28, 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.

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We anticipate completion of both the fiscal 2025 and fiscal 2026 restructuring plans and remaining store closures by the first half of fiscal 2027. The Company estimates that it will incur approximately $120 million and $110 million relating to the fiscal 2025 and fiscal 2026 restructuring plans, respectively, during the remainder of fiscal 2026 and first half of fiscal 2027, primarily related to accelerated ROU lease asset amortization in our North America operating segment, impairment charges, and partner severance costs in our International operating segment. The majority of the accrued liability balance as of June 28, 2026, relates to restructuring charges expected to be paid out by the end of fiscal year 2026.

Item 1F. Financial Statements (Unaudited)

Item 1.Financial Statements

See Notes to Consolidated Financial Statements.

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See Notes to Consolidated Financial Statements.

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See Notes to Consolidated Financial Statements.

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See Notes to Consolidated Financial Statements.

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STARBUCKS CORPORATION

CONSOLIDATED STATEMENTS OF EQUITY

For the Quarter Ended June 28, 2026, and June 29, 2025

(in millions, except per share data, unaudited)

See Notes to Consolidated Financial Statements.

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STARBUCKS CORPORATION

CONSOLIDATED STATEMENTS OF EQUITY

For the Three Quarters Ended June 28, 2026, and June 29, 2025

(in millions, except per share data, unaudited)

See Notes to Consolidated Financial Statements.

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STARBUCKS CORPORATION

INDEX FOR NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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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 June 28, 2026, and for the quarters and three quarters ended June 28, 2026 and June 29, 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 three quarters ended June 28, 2026, and June 29, 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 three quarters ended June 28, 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 the Company’s “Back to Starbucks” strategy, the following restructuring plans were approved.

Fiscal 2025 Restructuring Plans

In the second quarter of fiscal 2025, we announced a fiscal 2025 restructuring 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 an additional fiscal 2025 restructuring plan involving the closure of coffeehouses and the further transformation of our support organization. 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.

Fiscal 2026 Restructuring Plans

In the second quarter of fiscal 2026, management approved a fiscal 2026 restructuring plan to relocate certain functions of our support organization to an additional office in Nashville, Tennessee, with the intention to establish a more strategic presence in the Southeast region of the United States.

In the third quarter of fiscal 2026, we announced an additional fiscal 2026 restructuring plan focused on further transformation of our global support organization and non-retail facilities, as well as reducing the future operational complexity of our Starbucks Reserve and Roastery locations resulting in a reassessment and impairment of the associated asset group.

Refer to Note 17, Restructuring and Impairments, 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;

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• 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 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”). During the first and second quarters of fiscal 2026, 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.

On March 30, 2026, in the third quarter of fiscal 2026, the previously announced transaction closed, and as such, the disposal group was no longer classified as held for sale on the consolidated balance sheets. 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. We have substantially completed our evaluation of these amendments and expect the adoption to result in expanded income tax disclosures, including an enhanced rate reconciliation and cash income taxes paid disclosures. We do not expect the adoption to have a material impact on our consolidated financial statements.

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

On March 30, 2026, we completed the divestiture of Starbucks retail operations in China (“the disposal group”), which marked a significant milestone in the Company’s long-term strategy to unlock sustainable, disciplined growth in China.

Under the agreement, Boyu Capital acquired a 60% interest in Starbucks retail operations in China based on a cash-free, debt-free mutually agreed-upon total enterprise value of approximately $4 billion. The transaction was partially financed with debt issued by the newly formed joint venture and we received total consideration with respect to the transaction of $3.1 billion, inclusive of our share of the debt proceeds. Starbucks retained a 40% interest of approximately $1.2 billion, accounted for under the equity method of accounting. Our carrying value of the retained investment includes the impact of debt raised by the joint venture in conjunction with the transaction. The Company derecognized net assets with a carrying value of $3.4 billion, and reclassified approximately $282.8 million of cumulative translation adjustment (“CTA”) losses and net investment hedge losses of $99.7 million from accumulated other comprehensive income into earnings. As a result, we recognized a pre-tax gain of $536.3 million, which was included in net gain resulting from divestiture of certain operations on our consolidated statements of earnings.

Total incremental income tax expense associated with the divestiture gain is approximately $198.6 million, of which approximately $147.8 million was recognized in the third quarter of fiscal 2026, with the remainder expected to be recognized in the fourth quarter of fiscal 2026. The income tax expense is a component of the estimated annual effective tax rate and, accordingly, is recognized in proportion to year-to-date ordinary pre-tax income. We also recognized transaction costs of approximately $44.1 million and $73.8 million for the quarter and three quarters ended June 28, 2026, respectively.

Upon completion of the divestiture, the disposal group was deconsolidated from our financial statements and 7,991 company-operated stores previously included in the disposal group were converted to licensed stores within our International segment. We will continue to own and license the Starbucks brand and intellectual property to the joint venture.

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 to, and royalty revenues from, the joint venture. For the third quarter of fiscal 2026, revenues generated from the joint venture were $52.5 million and related product and distribution costs were $18.5 million. Accounts receivable from the joint venture as of June 28, 2026, was $30.7 million, on our consolidated balance sheets, primarily related to product sales to, and royalty revenues from, the joint venture. As of June 28, 2026, the carrying value of this investment was $1.2 billion.

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.

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.

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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.

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):

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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):

(1) Gains and losses recognized in earnings relate to components excluded from the assessment of effectiveness.

(2) Net investment hedge losses accumulated in AOCI were reclassified to earnings due to the divestiture of Starbucks retail operations in China in the third quarter of fiscal 2026.

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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):

Notional amounts of outstanding derivative contracts (in millions):

(1) The reduction in hedged notional reflects the maturity and early termination of net investment hedges in the second quarter of fiscal 2026 related to the divestiture of Starbucks retail operations in China. The net investment hedge losses accumulated in AOCI were reclassified from AOCI to earnings in the third quarter of fiscal 2026 consistent with the timing of the transaction closing.

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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:

(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):

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):

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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 and marketable equity securities were not material as of June 28, 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 three quarters ended June 28, 2026, and June 29, 2025.

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Note 5: Inventories (in millions):

(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) Balances exclude Starbucks retail operations in China that were divested during the third quarter of fiscal 2026.

As of June 28, 2026, we had committed to purchasing green coffee totaling $383 million under fixed-price contracts and an estimated $440 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

(1) Balances exclude Starbucks retail operations in China that were divested in the third quarter of fiscal 2026.

Accrued Liabilities

(1) Balances exclude Starbucks retail operations in China that were divested in the third quarter of fiscal 2026.

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Store Operating Expenses

Note 7: Other Intangible Assets and Goodwill

Indefinite-Lived Intangible Assets

Finite-Lived Intangible Assets

(1) The decrease in acquired and reacquired rights was a result of divesting Starbucks retail operations in China in the third quarter of fiscal 2026.

Amortization expense for finite-lived intangible assets was $2.9 million and $5.6 million for the quarter and three quarters ended June 28, 2026, respectively, and $4.4 million and $15.8 million for the quarter and three quarters ended June 29, 2025, respectively.

Estimated future amortization expense as of June 28, 2026 (in millions):

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Goodwill

Changes in the carrying amount of goodwill by reportable operating segment (in millions):

(1) The decrease in the International segment was a result of divesting Starbucks retail operations in China in the third quarter of fiscal 2026.

(2)“Other” consists primarily of changes in the goodwill balance resulting from foreign currency translation.

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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 June 28, 2026, we were in compliance with all applicable covenants. No amounts were outstanding under our 2025 credit facility as of June 28, 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 June 28, 2026, and September 28, 2025. Our total available contractual borrowing capacity for general corporate purposes was $3.0 billion as of the end of our third quarter of fiscal 2026.

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

• A ¥5.0 billion, or $30.9 million, credit facility is currently set to mature on December 30, 2026. Borrowings under this credit facility are subject to terms defined within the facility and will bear interest at a variable rate based on Tokyo Interbank Offered Rate (“TIBOR”) plus an applicable margin of 0.400%.
• A ¥10.0 billion, or $61.8 million, credit facility is currently set to mature on March 27, 2027. Borrowings under this credit facility are subject to terms defined within the facility and will bear interest at a variable rate based on TIBOR plus an applicable margin of 0.300%.

As of June 28, 2026, and September 28, 2025, we had no borrowings outstanding under these credit facilities.

Long-term Debt

In May 2026, the Company completed cash tender offers for certain series of its senior notes and repurchased approximately $1.3 billion aggregate principal amount of such notes using cash proceeds from the divestiture of Starbucks retail operations in China. The notes repurchased consisted of:

• $273.5 million of the $750.0 million, 4.500% Senior Notes (the “May 2028 notes”)
• $321.8 million of the $500.0 million, 4.800% Senior Notes (the “May 2030 notes”)
• $110.4 million of the $500.0 million, 5.000% Senior Notes (the “February 2034 notes”)
• $410.2 million of the $500.0 million, 5.400% Senior Notes (the “May 2035 notes”)
• $200.0 million of the $1.0 billion, 4.500% Senior Notes (the “November 2048 notes”)

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In connection with the redemptions, the Company recognized an immaterial gain on partial extinguishment of debt for the quarter ended June 28, 2026, which is included in Interest income and other, net in the consolidated statement of earnings. In determining the value of the gain, the Company expensed the proportional amount of the related unamortized discount, premium, and debt issuance costs attributable to the repurchased notes.

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

(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 June 28, 2026, by fiscal year (in millions):

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Note 9: Leases

The components of lease costs (in millions):

(1) Includes immaterial amounts of sublease income and rent concessions.

The following table includes supplemental information (in millions):

(1) The fiscal 2026 amounts exclude Starbucks retail operations in China that were divested during the third quarter of fiscal 2026, and the fiscal 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 with the corresponding lease liabilities included in accrued liabilities on the consolidated balance sheets. These balances were not material as of June 28, 2026, and September 28, 2025. Finance lease costs were also immaterial for the quarter and three quarters ended June 28, 2026, and June 29, 2025.

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

(1) Balances exclude Starbucks retail operations in China that were divested in the third quarter of fiscal 2026.

As of June 28, 2026, we have entered into operating leases that have not yet commenced of $583.4 million, primarily related to real estate leases. These leases will commence between fiscal year 2026 and fiscal year 2030 with lease terms ranging from 10 to 20 years.

During the quarter and three quarters ended June 28, 2026, total lease costs of $112.9 million and $164.8 million, respectively, were recorded in restructuring and impairments on the consolidated statement of earnings. Lease costs associated with our restructuring efforts primarily relate to the impairment of ROU assets and the closure of certain Starbucks company-operated stores. See Note 17, Restructuring and Impairments, 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 June 28, 2026, the current and long-term deferred revenue related to the Nestlé up-front payment was $177.0 million and $5.5 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 June 28, 2026, and June 29, 2025, we recognized $44.1 million of prepaid royalty revenue related to Nestlé. During each of the three quarters ended June 28, 2026, and June 29, 2025, we recognized $132.3 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):

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

(2) The balance excludes Starbucks retail operations in China that were classified as held for sale in the first quarter of fiscal 2026 and divested in the third quarter of fiscal 2026.

(3) As of June 28, 2026 and June 29, 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):

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

(1) Reclassification of CTA from AOCI to earnings upon sale or liquidation of foreign businesses.

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 June 28, 2026.

During the three quarters ended June 28, 2026, and June 29, 2025, we made no share repurchases. As of June 28, 2026, 29.8 million shares of common stock remained available for repurchase under current authorizations.

During the third quarter of fiscal 2026, our Board of Directors approved a quarterly cash dividend to shareholders of $0.62 per share to be paid on August 28, 2026, to shareholders of record as of the close of business on August 14, 2026.

Note 12: Employee Stock Plans

As of June 28, 2026, there were 69.6 million shares of common stock available for issuance pursuant to future equity-based compensation awards and 8.7 million shares available for issuance under our employee stock purchase plan.

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

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RSU transactions from September 28, 2025 through June 28, 2026 (in millions):

Note 13: Income Taxes

The effective tax rate for the quarter ended June 28, 2026, was 26.4% compared to 31.8% for the same period in fiscal 2025. The decrease was primarily due to lapping the discrete impact of changes in indefinite reinvestment assertions for certain foreign entities in the third quarter of fiscal 2025 (approximately 850 basis points), partially offset by impacts resulting from the divestiture of Starbucks retail operations in China in the third quarter of fiscal 2026 (370 basis points).

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

Note 14: Earnings per Share

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

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.

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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.

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):

(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):

(1) Includes Channel Development segment and other net revenues.

(2) The fiscal year 2026 balance excludes Starbucks retail operations in China that were divested during the third quarter of fiscal 2026.

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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 three quarters ended June 28, 2026, and 73% for the quarter and three quarters ended June 29, 2025, respectively.

The financial information below is presented for our reportable operating segments and Corporate and Other (in millions):

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Note 17: Restructuring and Impairments

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 the Company’s “Back to Starbucks” strategy, the following restructuring plans were approved.

Fiscal 2025 Restructuring Plans

In the second quarter of fiscal 2025, we announced a fiscal 2025 restructuring 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 an additional fiscal 2025 restructuring plan involving the closure of coffeehouses and the further transformation of our support organization. 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 three quarters ended June 28, 2026, 20 and 247 stores, respectively, were closed, and approximately $10.0 million and $115.9 million, respectively, was recorded to restructuring and impairments on our consolidated statement of earnings related to our fiscal 2025 restructuring plans. 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.

During the quarter and three quarters ended June 29, 2025, we recognized pre-tax restructuring charges of $20.8 million and $137.0 million, respectively, primarily associated with partner severance costs. These costs were recorded to restructuring and impairments on our consolidated statement of earnings.

Fiscal 2026 Restructuring Plans

In the second quarter of fiscal 2026, management approved a fiscal 2026 restructuring plan to relocate certain functions of our support organization to an additional office in Nashville, Tennessee, with the intention to establish a more strategic presence in the Southeast region of the United States.

In the third quarter of fiscal 2026, we announced an additional fiscal 2026 restructuring plan focused on further transformation of our global support organization and non-retail facilities, as well as reducing the future operational complexity of our Starbucks Reserve and Roastery locations resulting in a reassessment and impairment of the associated asset group.

During the quarter and three quarters ended June 28, 2026, we recognized pre-tax restructuring charges of $292.6 million and $299.9 million, respectively, to restructuring and impairments on our consolidated statement of earnings related to our fiscal 2026 restructuring plans. This total consists of disposal and impairment of company-operated store assets primarily associated with the impairment of Starbucks Reserve and Roastery store locations, and employee severance, separation and other costs.

The tables below present the restructuring and impairment charges by fiscal year restructuring plans, reportable operating segment, and Corporate and Other (in millions):

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The table below presents the balance of liabilities related to the restructuring plans by major type of cost (in millions):

(1) The operating lease liability balances for total stores under the fiscal 2025 and fiscal 2026 restructuring plans were $183.1 million and $6.9 million, respectively, as of June 28, 2026.

(2) The decrease was a result of divesting Starbucks retail operations in China during the third quarter of fiscal 2026 .

(3) “Other” primarily consists of updates to accrual estimates and adjustments for non-cash charges.

As of June 28, 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.

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We anticipate completion of both the fiscal 2025 and fiscal 2026 restructuring plans and remaining store closures by the first half of fiscal 2027. The Company estimates that it will incur approximately $120 million and $110 million relating to the fiscal 2025 and fiscal 2026 restructuring plans, respectively, during the remainder of fiscal 2026 and first half of fiscal 2027, primarily related to accelerated ROU lease asset amortization in our North America operating segment, impairment charges, and partner severance costs in our International operating segment. The majority of the accrued liability balance as of June 28, 2026, relates to restructuring charges expected to be paid out by the end of fiscal year 2026.