SBUX
CyclicalStarbucks
Price Chart
Market Data
Financials
XBRL · SEC EDGAR2007–2025(19yr)| Metric | FY 2007 | FY 2008 | FY 2009 | FY 2010 | FY 2011 | FY 2012 | FY 2013 | FY 2014 | FY 2015 | FY 2016 | FY 2017 | FY 2018 | FY 2019 | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 | FY 2025Latest | YoY |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $9.4B | $10.4B | $9.8B | $10.7B | $11.7B | $13.3B | $14.9B | $16.4B | $19.2B | $21.3B | $22.4B | $24.7B | $26.5B | $23.5B | $29.1B | $32.3B | $36.0B | $36.2B | $37.2B | +2.8% |
| Gross Profit | $5.4B | $5.7B | $5.4B | $6.2B | $6.8B | $7.5B | $8.5B | $9.6B | $11.4B | $12.8B | $13.3B | $14.5B | $18.0B | — | — | — | — | — | — | — |
| Gross Margin | 57.5% | 55.3% | 55.8% | 58.4% | 57.7% | 56.3% | 57.1% | 58.3% | 59.4% | 60.1% | 59.6% | 58.8% | 67.8% | — | — | — | — | — | — | — |
| Operating Income | $1.1B | $503.9M | $562.0M | $1.4B | $1.7B | $2.0B | -$325.4M | $3.1B | $3.6B | $4.2B | $4.1B | $3.9B | $4.1B | $1.6B | $4.9B | $4.6B | $5.9B | $5.4B | $2.9B | -45.7% |
| Operating Margin | 11.2% | 4.9% | 5.7% | 13.3% | 14.8% | 15.0% | -2.2% | 18.7% | 18.8% | 19.6% | 18.5% | 15.7% | 15.4% | 6.6% | 16.8% | 14.3% | 16.3% | 15.0% | 7.9% | -7.1pp |
| Net Income | $672.6M | $315.5M | $390.8M | $945.6M | $1.2B | $1.4B | $8.3M | $2.1B | $2.8B | $2.8B | $2.9B | $4.5B | $3.6B | $928.3M | $4.2B | $3.3B | $4.1B | $3.8B | $1.9B | -50.6% |
| Net Margin | 7.1% | 3.0% | 4.0% | 8.8% | 10.6% | 10.4% | 0.1% | 12.6% | 14.4% | 13.2% | 12.9% | 18.3% | 13.6% | 3.9% | 14.5% | 10.2% | 11.5% | 10.4% | 5.0% | -5.4pp |
| Free Cash Flow | $250.9M | $274.2M | $943.4M | $1.3B | $1.1B | $894.1M | $1.8B | -$553.1M | $2.4B | $3.1B | $2.7B | $10.0B | $3.2B | $114.2M | $4.5B | $2.6B | $3.7B | $3.3B | $2.4B | -26.4% |
| FCF Margin | 2.7% | 2.6% | 9.7% | 11.8% | 9.2% | 6.7% | 11.8% | -3.4% | 12.8% | 14.7% | 11.9% | 40.3% | 12.2% | 0.5% | 15.6% | 7.9% | 10.2% | 9.2% | 6.6% | -2.6pp |
| EPS (Diluted) | $0.87 | $0.43 | $0.52 | $1.24 | $1.62 | $1.79 | $0.01 | $2.71 | $1.82 | $1.90 | $1.97 | $3.24 | $2.92 | $0.79 | $3.54 | $2.83 | $3.58 | $3.31 | $1.63 | -50.8% |
1. THE BIG PICTURE
Starbucks is a brand in transition, trading at a steep valuation premium despite a 62% decline in quarterly earnings per share. While leadership claims its restructuring strategy is ahead of schedule, Starbucks is currently a story of top-line resilience masked by a bottom-line retreat. To justify its stock price, Starbucks must prove it can convert "sales momentum" into the high-margin profitability that its peers already deliver.
2. WHERE THE RISKS HIT HARDEST
The "Starbucks Experience" is threatened by rising labor costs and unionization at 6% of U.S. stores (Risks) because the resulting operational complexity undermines the "Green Apron Service Model" intended to foster customer connection (Business). Furthermore, Starbucks’s "Brand Reputation" is vulnerable to commodity price volatility in high-quality arabica coffee (Competitive Position). Because Starbucks has a limited ability to hedge against these price increases, it may be forced to choose between further margin erosion or price hikes that could trigger the "store boycotts" cited as a material risk.
3. WHAT THE NUMBERS SAY TOGETHER
The financial data reveals a stark disconnect between sales and profits. In the most recent quarter, consolidated net revenues rose 6% to $9.9 billion, yet net earnings fell to $293.3 million from $780.8 million a year prior (Recent Results). This suggests the "Back to Starbucks" initiatives are currently weighing heavily on the bottom line. Compared to its peers, Starbucks operates with significant inefficiency; its 22.2% gross margin and 5.4% net margin are the lowest in a group that includes McDonald's and Chipotle (Peer Benchmarking). While the 6% quarterly revenue growth shows a slight acceleration over the 2.8% TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter rate, Starbucks’s 5.2x net leverage and $14.4 billion in net debt leave little room for error if this momentum stalls. Short interest at 4.7% of the float suggests a segment of the market remains skeptical of the recovery's pace.
4. IS IT WORTH IT AT THIS PRICE?
At 34.0x Forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations, Starbucks is the most expensive stock in its peer group, trading at a 33% premium to the 25.5x peer median. At this multiple, the market is pricing in approximately 6.7% long-term growth (CAPM analysis). This expectation appears aggressive given Starbucks’s actual TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter revenue growth of 2.8% and its position as the laggard in every major margin category. If growth were to settle at a 5% "base case," the justified multiple would drop to 21.7x—representing roughly 36% downside from current levels. For the current price to be right, the "Back to Starbucks" strategy must not only succeed but deliver growth and margin expansion significantly above Starbucks's historical averages.
5. WHAT WOULD CHANGE THIS VIEW?
- Constructive if non-GAAPGAAPGenerally Accepted Accounting Principles — the standard U.S. accounting rules all public companies must follow operating margins show the "slight improvement" promised in 2026 guidance, signaling that the recent earnings collapse was a temporary result of restructuring.
- Cautious if North American comparable store sales growth falls below the 3% target, as this segment generates 74% of total revenue and funds international expansion.
- Cautious if the "Back to Starbucks" plan fails to realize anticipated cost savings, leading to the asset impairment charges warned of in the filing (Risks).
6. BOTTOM LINE
Structural Advantage: A global brand footprint anchored by an industry-leading digital loyalty program and a dominant 74% revenue base in the North American specialty coffee market.
Bottom Line: Starbucks is a premium-priced turnaround play where the market's growth expectations are currently decoupled from Starbucks's trailing margin performance.
1. Top 5 Material Risks
- Brand Value Erosion: Starbucks relies on its global brand reputation; any failure to maintain product quality or perceived unethical behavior can trigger boycotts and diminish consumer demand, directly impacting financial results.
- North America Concentration: With approximately 74% of total net revenues derived from the North America segment in fiscal year 2025, any slowdown in this region threatens Starbucks’s ability to fund international expansion and shareholder returns.
- Strategic Implementation: The "Back to Starbucks" plan involves complex restructuring, including store redesigns and digital platform expansion; failure to realize anticipated cost savings or returns from these initiatives could lead to asset impairment charges.
- Commodity Price Volatility: Starbucks is exposed to fluctuations in the price of high-quality arabica coffee beans and other commodities like dairy and plant-based alternatives, which can materially impact profitability given Starbucks's limited ability to hedge against price increases.
- Labor Costs and Unionization: Rising labor costs, including wage inflation and the impact of unionization at approximately 6% of U.S. company-operated stores, threaten to increase operational complexity and decrease flexibility in managing store-level efficiency.
2. Company-Specific Risks
- Channel Development Dependency: Starbucks’s Channel Development business is heavily reliant on Nestlé, which holds global distribution rights for certain Starbucks branded packaged goods; failure by Nestlé to support the brand could materially impact this segment.
- Digital and AI Integration: Starbucks faces risks related to the adoption of artificial intelligence and machine learning, including potential inaccuracies, hallucinations, or bias that could affect digital engagement and operational efficiency.
- International Operational Complexity: Operating in 89 global markets requires balancing local autonomy with corporate standards; failure to manage these diverse regulatory and cultural environments can lead to higher occupancy and operating costs.
- Food Safety Incidents: Any reported incident of contamination or mislabeling—even if inaccurate—can lead to temporary store closures and significant financial losses from inventory destruction and lost sales.
3. Regulatory/Legal Risks
- Global Tax Compliance: The OECD’s Pillar Two initiative establishes a 15% global minimum tax; while not currently expected to materially impact consolidated results, Starbucks continues to monitor the implementation of this legislation across its operating jurisdictions.
- Data Privacy Laws: Starbucks is subject to strict data protection requirements, including the EU’s GDPR, China’s PIPL, and the California Consumer Privacy Act (CCPA), which impose significant penalties for noncompliance and require ongoing investment in compliance infrastructure.
- Environmental Regulations: Evolving rules targeting carbon emissions, plastic use, and commercial water consumption, such as the EU’s Corporate Sustainability Reporting Directive and California’s climate disclosure requirements, increase compliance costs and capital expenditure obligations.
- Labor Legislation: Changes in federal and state laws, such as the U.S. Department of Labor’s increased minimum salary threshold for overtime exemptions and California’s Assembly Bill 1228, directly increase labor costs and operational complexity.
4. Financial Impact Map
Brand Value Erosion → Net Revenues → Potential decline in consumer traffic and transaction value due to boycotts or negative sentiment. North America Concentration → Total Net Revenues → A decline in the U.S. market limits the ability to fund international growth and shareholder returns. Strategic Implementation → Goodwill and Intangibles → Failure to realize benefits from strategic transactions may require the assessment of impairment charges. Commodity Price Volatility → Cost of Sales / Profitability → Rising costs for coffee and dairy products directly pressure margins if they cannot be passed to customers. Labor Costs and Unionization → Operating Expenses → Increased wages and benefits, combined with potential operational disruptions, directly impact the cost structure of company-operated stores.
Recent Filings
| Form | Filed | Period |
|---|---|---|
| 8-K | Jan 2026 | — |
| 10-Q | Jan 2026 | Dec 2025 |
| 14A | Jan 2026 | — |
| 10-K | Nov 2025 | Sep 2025 |
AI-extracted key facts from press releases and SEC filings. Significance 1–10.
Starbucks same-store sales jump 6.2%, ending 7-quarter streak of declines
- ▸Same-store sales +6.2% YoY
- ▸Ended 7-quarter streak of flat or declining sales
- ▸Shares rose nearly 6% in after-hours trading
- ▸Performance attributed to leadership of CEO Brian Niccol
Starbucks Introduces Performance-Based Barista Bonuses Up To $1,200 Annually
- ▸Performance-based bonus program offers up to $1,200 annually per barista
- ▸Expanded tipping options added to mobile and card payment platforms
- ▸Weekly pay frequency introduced to improve employee financial flexibility
- ▸Initiative aims to address margin pressure and ongoing unionization activity
- ▸Labor strategy targets improved store operations, service speed, and staff retention
Starbucks Q1 Revenue +5% to $9.9B, Net Income Falls 62% to $293M
- ▸Revenue +5% YoY to $9.9 billion
- ▸Net income -62% YoY to $293 million
- ▸EPS reported at $0.26
- ▸CEO Brian Niccol cites 'Back to Starbucks' strategy progress
- ▸Ongoing supply chain risks from coffee/cacao shortages and rising diesel costs
Starbucks highlights $500M labor investment and China growth strategy at annual shareholder meeting
- ▸Invested $500M in additional labor hours and expanded store rosters
- ▸Targeting 1,000+ coffeehouse 'uplifts' by end of fiscal 2026
- ▸Retail hourly compensation averages over $30/hour including benefits
- ▸Announced partnership with Boyu Capital to accelerate China market expansion
- ▸Retail hourly turnover reported at less than half the industry average
Starbucks targets $2B in cost savings over two years to drive margin expansion
- ▸Targeting $2 billion in cost savings over next two years
- ▸Q1 consolidated operating margin 10.1%, down 180 basis points YoY
- ▸Margin contraction driven by turnaround investments and inflationary pressures
- ▸Cost-saving program spans G&A, procurement, and operational processes
- ▸Margin improvement expected to be weighted toward second half of fiscal year
Starbucks Dissolves Labor Relations Committee Amid Activist Pressure Over Governance and Costs
- ▸Dissolved board committee on labor relations
- ▸Activist investors urging vote against re-election of two directors
- ▸Union contract negotiations resuming with proposals for higher starting wages
- ▸Shares trading 26.1% above estimated fair value per DCF model
- ▸Current net margin 3.6% with 78.1x P/E ratio
Starbucks Q1 Revenue $9.9B +6%, Non-GAAP EPS $0.56; Guggenheim Raises PT to $95
- ▸Q1 consolidated net revenue $9.9B, +6% YoY
- ▸Q1 non-GAAP EPS $0.56; GAAP EPS $0.26
- ▸Global comparable store sales +4% driven by 3% transaction growth
- ▸Guggenheim maintains Neutral rating, raises price target to $95
- ▸FY26 non-GAAP EPS guidance $2.15–$2.40