Starbucks

“We also compete with restaurants and other specialty retailers for prime retail locations and qualified personnel to operate both new and existing stores.”

Annual report 2025A · The company itself

“Risks to successful and timely implementation of these initiatives include delays or cancellations of store openings due to labor or material shortages, permit procurement issues, or lack of suitable real estate; supply chain scalability and sustainability challenges; underperformance or delays in product innovation; remodel disruptions or cost overruns; coordination and execution challenges; failure to realize cost savings; increased taxation; regulatory constraints, including public health mandates; credit rating deterioration; and geopolitical instability.”

Annual report 2025A · The company itself

“To maintain consistent customer experience, we provide training and oversight to certain partners; however, factors beyond our control—such as financial instability, labor shortages, or noncompliance with sanitation protocols—may affect the quality of their service and products. We do not have direct control over these partners and may lack visibility into their operations.”

Annual report 2025A · The company itself

“Our ability to do so has been and may continue to be impacted by challenges in the labor market (which has experienced, and may continue to experience, wage inflation and labor shortages), our position with respect to unions and the unionization of partners, increased employee turnover, changes in availability of our workforce, and shifts in remote or hybrid work arrangements.”

Annual report 2025A · The company itself

“Moreover, we have experienced work stoppages and other disruptions caused by union activities or organizing efforts in some company-operated stores. Such work stoppages and other disruptions have the potential to negatively impact our operations, third-party providers upon whom we rely to deliver product, our sales and customer flow in impacted locations, our costs, and can also have a negative impact on our reputation and brand.”

Annual report 2025A · The company itself

“Total Rewards We have demonstrated a history of investing in our workforce by offering competitive salaries and wages by continuously assessing the current business environment and labor market. We have consistently made enhancements in wages in order to attract talent to support our growth strategy and to elevate the customer experience.”

Annual report 2025A · The company itself

“Our business could be adversely impacted by increases in labor costs, including wages and benefits, which, in a retail business such as ours, are two of our most significant costs, both domestically and internationally. Such increases could be triggered by state and federal legislation and regulatory actions regarding wages, scheduling, and benefits; increases in healthcare and workers’ compensation insurance costs; and increases in wages and costs of other benefits necessary to attract and retain high-quality employees with the right skill sets.”

Annual report 2025A · The company itself

“Store development costs have risen due to construction labor inflation and increased material and equipment expenses.”

Annual report 2025A · The company itself

“In the fourth quarter of fiscal 2024, we announced our “Back to Starbucks” strategy, which was implemented with the goal to bring new and existing customers to our stores and business, and return to growth. The strategy includes supporting our green apron partners, enhancing the customer experience, reestablishing ourselves as the community coffeehouse, and strengthening the brand through product development, marketing, in-store and digital experience.”

Annual report 2025A · The company itself

“We believe the strength of our workforce is one of the significant contributors to our success as a global brand that leads with purpose.”

Annual report 2025A · The company itself

“Therefore, one of our core strategies is to invest in, and support, our partners to differentiate our brand, products, and services in the competitive specialty coffee market, including the following areas of focus: Oversight and Management We believe in creating an inclusive and equitable environment that represents a broad spectrum of backgrounds and cultures that is reflective of our customers, partners, and communities.”

Annual report 2025A · The company itself

“We undertake these initiatives in the context of ongoing efforts to adapt to shifting consumer behaviors amid economic volatility, optimize our mix of licensed and company-operated stores, expand relevant product offerings across dayparts, and drive growth in cold beverages and Channel Development partnerships, while also advancing appropriate sustainability efforts, managing climate-related risks, and reducing operating costs.”

Annual report 2025A · The company itself

“Seasonality and Quarterly Results Our business is subject to moderate seasonal fluctuations, of which our second fiscal quarter typically experiences lower revenues and operating income. Additionally, as Starbucks Cards are issued to, and loaded by, customers during the holiday season, we tend to have higher cash flows from operations during the first quarter of the fiscal year.”

Annual report 2025A · The company itself

“Financial performance may be adversely affected by reduced discretionary spending, lack of acceptance of new products, brands, or platforms, or declining demand for existing offerings.”

Annual report 2025A · The company itself

“As a retailer reliant on discretionary spending, our financial results are sensitive to macroeconomic conditions. A prolonged downturn or slow recovery may reduce consumer spending, leading to lower demand or shifts to lower-priced products.”

Annual report 2025A · The company itself

“In the fourth quarter of fiscal 2024, we announced our “Back to Starbucks” strategy, which was implemented with the goal to bring new and existing customers to our stores and business, and return to growth. The strategy includes supporting our green apron partners, enhancing the customer experience, reestablishing ourselves as the community coffeehouse, and strengthening the brand through product development, marketing, in-store and digital experience.”

Annual report 2025A · The company itself

“Company-operated Stores Revenue from company-operated stores accounted for 83% of total net revenues during fiscal 2025.”

Annual report 2025A · The company itself

“In addition to coffee, we also purchase significant amounts of dairy, particularly fluid milk, and to a lesser degree, plant-based dairy-free alternative products, such as oat milk and almond milk, to support the needs of our company-operated stores.”

Annual report 2025A · The company itself

“Products other than whole bean coffees and coffee beverages sold in Starbucks stores include tea and a number of ready-to-drink beverages that are purchased from several specialty suppliers, usually under long-term supply contracts. Food products, such as pastries, breakfast sandwiches, and lunch items, are purchased from national, regional, and local sources.”

Annual report 2025A · The company itself

“To help ensure the future supply of high-quality green coffee and to reinforce our leadership role in the coffee industry, Starbucks operates ten farmer support centers, including our China Farmer Support Center located in the Yunnan Province of this high-growth market. Farmer support centers are staffed with agronomists and sustainability experts who work with coffee farming communities to promote best practices in coffee production designed to improve both coffee quality and yields as well as agronomy support to address climate change and other impacts.”

Annual report 2025A · The company itself

“Evolving consumer preferences and tastes, as well as adverse public or medical opinions about the health effects of consuming our products, may adversely affect our business. Our success depends on attracting and retaining customers.”

Annual report 2025A · The company itself

“Our primary objective is to maintain Starbucks standing as one of the most recognized and respected brands in the world. We believe the continuous investments in our brand and operations will deliver long-term targeted revenue and income growth.”

Annual report 2025A · The company itself

“Our retail objective is to be the leading retailer and brand of coffee and tea in each of our target markets by selling the finest quality coffee, tea, and related products, as well as complementary food offerings, and by providing each customer with a unique Starbucks Experience.”

Annual report 2025A · The company itself

“Starbucks is the premier roaster, marketer, and retailer of specialty coffee in the world, operating in 89 markets.”

Annual report 2025A · The company itself

“Other Revenues Other revenues primarily are recorded in our Channel Development segment and include sales of packaged coffee, tea, and ready-to-drink beverages to customers outside of our company-operated and licensed stores, as well as royalties received from Nestlé under the Global Coffee Alliance and other collaborative partnerships.”

Annual report 2025A · The company itself

“Emerging technologies, including artificial intelligence and machine learning, may not deliver expected efficiencies and could introduce new risks, such as those related to cybersecurity, data privacy, inaccuracies, hallucinations, bias or discrimination and intellectual property infringement, which may become more pronounced as the Company’s reliance on such technologies increases.”

Annual report 2025A · The company itself

“In addition, by leveraging experiences gained through our stores and elsewhere, we continue to drive beverage, equipment, process, and technology innovation, including in our industry-leading digital platform.”

Annual report 2025A · The company itself

“Risks to successful and timely implementation of these initiatives include delays or cancellations of store openings due to labor or material shortages, permit procurement issues, or lack of suitable real estate; supply chain scalability and sustainability challenges; underperformance or delays in product innovation; remodel disruptions or cost overruns; coordination and execution challenges; failure to realize cost savings; increased taxation; regulatory constraints, including public health mandates; credit rating deterioration; and geopolitical instability.”

Annual report 2025A · The company itself

“Such initiatives include improving our service model, and further transforming our non-retail support organization; enhancing partner investment to improve customer experience; closing, renovating, and redesigning coffeehouses; strengthening our leadership in coffee; expanding digital engagement through mobile, loyalty, delivery, and international platforms; simplifying store operations; and responsibly growing our global footprint.”

Annual report 2025A · The company itself

“A large portion of our Channel Development business operates under a licensed model of the Global Coffee Alliance with Nestlé, while our global ready-to-drink businesses operate under collaborative relationships with PepsiCo, Inc., Nestlé, and others.”

Annual report 2025A · The company itself

“In addition, by leveraging experiences gained through our stores and elsewhere, we continue to drive beverage, equipment, process, and technology innovation, including in our industry-leading digital platform.”

Annual report 2025A · The company itself

“Other Revenues Other revenues primarily are recorded in our Channel Development segment and include sales of packaged coffee, tea, and ready-to-drink beverages to customers outside of our company-operated and licensed stores, as well as royalties received from Nestlé under the Global Coffee Alliance and other collaborative partnerships.”

Annual report 2025A · The company itself

“•Get a college degree, on us. Through the Starbucks College Achievement Plan (SCAP), Starbucks covers 100% of tuition for a first-time online bachelor’s degree from Arizona State University for partners working an average of 20 hours or more each week. •Grow their savings.”

Annual report 2025A · The company itself

“Starbucks is the premier roaster, marketer, and retailer of specialty coffee in the world, operating in 89 markets.”

Annual report 2025A · The company itself

“If our business partners and third-party providers do not satisfactorily fulfill their responsibilities and commitments, it could damage our brand, and our financial results could suffer. Our global business strategy, including our plans for new stores, branded products, and other initiatives, relies significantly on a variety of business partners, including licensees, joint venture partners, third-party manufacturers, distributors, and retailers, particularly for our entire global Channel Development business.”

Annual report 2025A · The company itself

“We also sell a variety of coffee and tea products and license our trademarks through other channels, such as licensed stores as well as grocery and foodservice through our Global Coffee Alliance with Nestlé S.A.”

Annual report 2025A · The company itself

“We undertake these initiatives in the context of ongoing efforts to adapt to shifting consumer behaviors amid economic volatility, optimize our mix of licensed and company-operated stores, expand relevant product offerings across dayparts, and drive growth in cold beverages and Channel Development partnerships, while also advancing appropriate sustainability efforts, managing climate-related risks, and reducing operating costs.”

Annual report 2025A · The company itself

“Such initiatives include improving our service model, and further transforming our non-retail support organization; enhancing partner investment to improve customer experience; closing, renovating, and redesigning coffeehouses; strengthening our leadership in coffee; expanding digital engagement through mobile, loyalty, delivery, and international platforms; simplifying store operations; and responsibly growing our global footprint.”

Annual report 2025A · The company itself

“Supply and price can be affected by multiple factors in the producing countries, including weather and extreme weather events, water supply quality and availability throughout the coffee production chain, natural disasters, crop disease and pests, general increases in farm inputs and costs of production, inventory levels, and political and economic conditions. Climate change may further exacerbate many of these factors.”

Annual report 2025A · The company itself

“Coffee supply and pricing are influenced by factors in producing countries, including weather and extreme weather events, water availability, natural disasters, crop disease, input costs, inventory levels, political and economic conditions, and actions by organizations seeking to influence global prices. Climate change may intensify these risks—for example, droughts or frosts in Brazil have in the past driven price increases.”

Annual report 2025A · The company itself

“Climate change can affect the supply and pricing of coffee and other non-coffee inputs due to weather volatility, water scarcity, and other environmental factors in producing regions.”

Annual report 2025A · The company itself

“Operating in 89 global markets, our properties and operations are increasingly vulnerable to extreme weather events—such as wildfires and droughts—which may disrupt operations, close stores, affect customers and suppliers, and increase costs, potentially resulting in financial losses.”

Annual report 2025A · The company itself

“Store development is subject to risks including site selection, lease negotiations, permitting and regulatory compliance, contractor availability, labor and material costs, and external disruptions such as weather events, natural disasters, or pandemics.”

Annual report 2025A · The company itself

“We purchase green coffee beans from multiple coffee-producing regions around the world and custom roast them to our exacting standards for our many blends and single-origin coffees.”

Annual report 2025A · The company itself

“Our continued success depends on our ability to adapt brand, marketing, promotional, advertising, and pricing strategies to shifting economic conditions, competitive pressures, and evolving customer preferences.”

Annual report 2025A · The company itself

“Additionally, factors such as operating costs, competitor strategies, and inflation may affect our pricing decisions, which could impact demand. For example, there is no guarantee future cost increases will be absorbed by customers.”

Annual report 2025A · The company itself

“Factors such as job loss, inflation, interest rate changes, taxation, credit access, public health crises, trade disputes, and geopolitical instability can all impact consumer behavior, including spending and routines, potentially affecting demand for our products.”

Annual report 2025A · The company itself

“The price of coffee is subject to volatility and has steadily increased over the past five years with significant increases over the last two years. Although most coffee trades in the commodity market, high-altitude arabica coffee of the quality sought by Starbucks tends to trade on a negotiated basis at a premium above the “C” coffee commodity price.”

Annual report 2025A · The company itself

“We purchase and roast high-quality coffees that we sell, along with handcrafted coffee, tea, and other beverages and a variety of high-quality food items through company-operated stores (“stores” or “coffeehouses”).”

Annual report 2025A · The company itself

“Product Supply Starbucks is committed to selling the finest whole bean coffees and coffee beverages. To help ensure compliance with our rigorous coffee standards, we generally control substantially all coffee purchasing, roasting, and packaging, and the global distribution of coffee used in our operations.”

Annual report 2025A · The company itself

“The price of coffee is subject to volatility and has steadily increased over the past five years with significant increases over the last two years. Although most coffee trades in the commodity market, high-altitude arabica coffee of the quality sought by Starbucks tends to trade on a negotiated basis at a premium above the “C” coffee commodity price.”

Annual report 2025A · The company itself

“We buy coffee using fixed-price and price-to-be-fixed purchase commitments, depending on market conditions, to secure an adequate supply of quality green coffee. We also utilize forward contracts, futures contracts, and collars to hedge “C” price exposure under our price-to-be-fixed green coffee contracts and our long-term forecasted coffee demand where underlying fixed-price and price-to-be-fixed contracts are not yet available.”

Annual report 2025A · The company itself

“Price is also impacted by geopolitical conditions, including new and existing tariffs on coffee imports and other trade controls, and by trading activities in the arabica coffee futures market, including hedge funds and commodity index funds.”

Annual report 2025A · The company itself

“Risks to successful and timely implementation of these initiatives include delays or cancellations of store openings due to labor or material shortages, permit procurement issues, or lack of suitable real estate; supply chain scalability and sustainability challenges; underperformance or delays in product innovation; remodel disruptions or cost overruns; coordination and execution challenges; failure to realize cost savings; increased taxation; regulatory constraints, including public health mandates; credit rating deterioration; and geopolitical instability.”

Annual report 2025A · The company itself

“Tariffs have also affected, and in the future may affect, our costs to procure coffee.”

Annual report 2025A · The company itself

“We are subject to risks from changes to the trade policies and tariff and import/export regulations by the U.S. and other foreign governments. Changes in the import and export policies, including trade restrictions such as new, increased, threatened, or retaliatory tariffs or quotas, embargoes, sanctions and countersanctions, safeguards, or customs restrictions by the U.S. and foreign governments, have in the past required, and could in the future require, us to change the way we conduct business and such changes have in the past adversely affected, and could in the future adversely affect, our financial condition, results of operations, reputation, and our relationships with customers, suppliers, and employees in the short- or long-term.”

Annual report 2025A · The company itself

“Our continued success depends on our ability to adapt brand, marketing, promotional, advertising, and pricing strategies to shifting economic conditions, competitive pressures, and evolving customer preferences.”

Annual report 2025A · The company itself

“Financial performance may be adversely affected by reduced discretionary spending, lack of acceptance of new products, brands, or platforms, or declining demand for existing offerings.”

Annual report 2025A · The company itself

“As a retailer reliant on discretionary spending, our financial results are sensitive to macroeconomic conditions. A prolonged downturn or slow recovery may reduce consumer spending, leading to lower demand or shifts to lower-priced products.”

Annual report 2025A · The company itself

“We purchase and roast high-quality coffees that we sell, along with handcrafted coffee, tea, and other beverages and a variety of high-quality food items through company-operated stores (“stores” or “coffeehouses”).”

Annual report 2025A · The company itself

“We purchase green coffee beans from multiple coffee-producing regions around the world and custom roast them to our exacting standards for our many blends and single-origin coffees.”

Annual report 2025A · The company itself

“Risks Related to Supply Chain Increases in the cost of high-quality arabica coffee beans or other commodities or decreases in the availability of high-quality arabica coffee beans or other commodities could have an adverse impact on our business operations and financial results.”

Annual report 2025A · The company itself

“Price is also impacted by geopolitical conditions, including new and existing tariffs on coffee imports and other trade controls, and by trading activities in the arabica coffee futures market, including hedge funds and commodity index funds.”

Annual report 2025A · The company itself

“Risks to successful and timely implementation of these initiatives include delays or cancellations of store openings due to labor or material shortages, permit procurement issues, or lack of suitable real estate; supply chain scalability and sustainability challenges; underperformance or delays in product innovation; remodel disruptions or cost overruns; coordination and execution challenges; failure to realize cost savings; increased taxation; regulatory constraints, including public health mandates; credit rating deterioration; and geopolitical instability.”

Annual report 2025A · The company itself

“Operating in 89 global markets, we face diverse cultural, regulatory, geopolitical, and economic environments.”

Annual report 2025A · The company itself

“Additionally, environmentally focused taxes or other measures, such as plastic packaging levies or extended producer responsibility laws, are gaining traction. These measures can adversely affect our financial performance by raising product costs, reducing consumption, or generating negative publicity.”

Annual report 2025A · The company itself

“Additionally, growing stakeholder focus on responsible business matters has led to heightened expectations and regulatory requirements, such as extended producer responsibility obligations that relate to our product packaging, the EU’s Corporate Sustainability Reporting Directive, or the state of California’s new climate change disclosure requirements. The evolving obligations may increase compliance costs and the risk of noncompliance.”

Annual report 2025A · The company itself

“Certain jurisdictions have enacted or proposed taxes or other restrictions on the manufacture, distribution, or sale of certain of our products, particularly beverages containing caloric sweeteners. These taxes and other measures vary in structure and may apply broadly or selectively.”

Annual report 2025A · The company itself

“Store development is subject to risks including site selection, lease negotiations, permitting and regulatory compliance, contractor availability, labor and material costs, and external disruptions such as weather events, natural disasters, or pandemics.”

Annual report 2025A · The company itself

“Store development costs have risen due to construction labor inflation and increased material and equipment expenses.”

Annual report 2025A · The company itself

“Like other prominent retail companies, we have experienced cyber-attacks (e.g., phishing) and other attempts to breach or gain unauthorized access to our systems, as have our third-party service providers, business partners, and licensees. We expect such threats to continue and evolve, especially with the rapid evolution and increased adoption of artificial intelligence.”

Annual report 2025A · The company itself

“Factors such as job loss, inflation, interest rate changes, taxation, credit access, public health crises, trade disputes, and geopolitical instability can all impact consumer behavior, including spending and routines, potentially affecting demand for our products.”

Annual report 2025A · The company itself

“Additionally, growing stakeholder focus on responsible business matters has led to heightened expectations and regulatory requirements, such as extended producer responsibility obligations that relate to our product packaging, the EU’s Corporate Sustainability Reporting Directive, or the state of California’s new climate change disclosure requirements. The evolving obligations may increase compliance costs and the risk of noncompliance.”

Annual report 2025A · The company itself

“Operating in 89 global markets, we face diverse cultural, regulatory, geopolitical, and economic environments.”

Annual report 2025A · The company itself

“Shifts in consumer behavior, including dietary changes or use of weight-loss drugs, may also impact sales.”

Annual report 2025A · The company itself

“Factors such as job loss, inflation, interest rate changes, taxation, credit access, public health crises, trade disputes, and geopolitical instability can all impact consumer behavior, including spending and routines, potentially affecting demand for our products.”

Annual report 2025A · The company itself

“For example, at the federal level, effective July 1, 2024, the United States Department of Labor increased the minimum salary threshold requirements for employees who are exempt from the Fair Labor Standards Act overtime requirements, and at the state level, Assembly Bill 1228 increased minimum wage and established working hour and working condition standards for certain partners in California.”

Annual report 2025A · The company itself

“Additionally, clean water is essential for beverage preparation, and access may be limited in certain international markets.”

Annual report 2025A · The company itself

“This includes expansion of our global store base, adding stores in both existing, developed markets such as the U.S. and in higher growth markets, as well as optimizing the mix of company-operated and licensed stores around the world.”

Annual report 2025A · The company itself

“Revenues from our reportable operating segments as a percentage of total net revenues for fiscal 2025 were as follows: North America (74%), International (21%), and Channel Development (5%).”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“Our financial performance is heavily reliant on our North America operating segment, which accounted for approximately 74% of total net revenues in fiscal year 2025.”

Annual report 2025A · The company itself

“The International segment is a critical profit center. Achievement of our growth targets is partially dependent on sustained performance and growth internationally, particularly in the markets operated by our larger regional licensees and in key company-owned markets outside North America.”

Annual report 2025A · The company itself

“Revenues from our reportable operating segments as a percentage of total net revenues for fiscal 2025 were as follows: North America (74%), International (21%), and Channel Development (5%).”

Annual report 2025A · The company itself

“The International segment is a critical profit center. Achievement of our growth targets is partially dependent on sustained performance and growth internationally, particularly in the markets operated by our larger regional licensees and in key company-owned markets outside North America.”

Annual report 2025A · The company itself

“Separately, the OECD’s Pillar Two initiative establishes a 15% global minimum tax for multinational entities. As of September 28, 2025, several countries where we operate have enacted legislation implementing the OECD’s Pillar Two initiative.”

Annual report 2025A · The company itself