Starbucks Reports Q3 Fiscal Year 2025 Results

“Back to Starbucks” Strategy Yielding Three Consecutive Quarters of Improving U.S. Transaction Comp

Q3 Consolidated Net Revenues Up 4% to $9.5 Billion

Q3 GAAP EPS $0.49, Non-GAAP EPS $0.50; Impacted in Part by One-Time Investments in Coffeehouse Leaders

Starbucks Corporation (Nasdaq: SBUX) today reported financial results for its 13-week fiscal third quarter ended June 29, 2025. GAAP results in fiscal 2025 include items that are excluded from non-GAAP results. Please refer to the reconciliation of GAAP measures to non-GAAP measures at the end of this release for more information.

Q3 Fiscal Year 2025 Highlights

• Global comparable store sales declined 2%, driven by a 2% decline in comparable transactions, partially offset by a 1% increase in average ticket
  • North America comparable store sales declined 2%, driven by a 3% decline in comparable transactions, partially offset by a 1% increase in average ticket; U.S. comparable store sales declined 2%, driven by a 4% decline in comparable transactions, partially offset by a 2% increase in average ticket
  • International comparable store sales were flat, driven by a 1% increase in comparable transactions, offset by a 1% decline in average ticket; China comparable store sales increased 2%, driven by a 6% increase in comparable transactions, partially offset by a 4% decline in average ticket
• The company opened 308 net new stores in Q3, ending the period with 41,097 stores: 53% company-operated and 47% licensed
  • At the end of Q3, stores in the U.S. and China comprised 61% of the company’s global portfolio, with 17,230 and 7,828 stores in the U.S. and China, respectively
• Consolidated net revenues increased 4% to $9.5 billion, or a 3% increase on a constant currency basis
• GAAP operating margin contracted 680 basis points year-over-year to 9.9%, primarily driven by deleverage, investments in support of “Back to Starbucks,” including additional labor and Leadership Experience 2025, and inflation.
  • Non-GAAP operating margin contracted 660 basis points year-over-year to 10.1%, or contracted 650 basis points year-over-year on a constant currency basis
• Effective tax rate of 31.8% compared to 24.8% in the prior year, the increase was primarily driven by the discrete impact of changes in indefinite reinvestment assertions for certain foreign entities of approximately 850 basis points.
• GAAP earnings per share of $0.49 declined 47% over prior year
  • Non-GAAP earnings per share of $0.50 declined 46% over prior year, or declined 45% on a constant currency basis

“We've fixed a lot and done the hard work on the hard things to build a strong operating foundation, and based on my experience of turnarounds, we are ahead of schedule,” commented Brian Niccol, chairman and chief executive officer. “In 2026, we'll unleash a wave of innovation that fuels growth, elevates customer service, and ensures everyone experiences the very best of Starbucks. We're building back a better Starbucks experience and a better business,” Niccol added.

“We are making tangible progress in our 'Back to Starbucks' strategy. In the quarter, we made a significant non-recurring investment in our Leadership Experience 2025 and also incurred a discrete tax item, which in the aggregate, negatively impacted Q3 EPS by $0.11,” commented Cathy Smith, chief financial officer. “We are focused on growing back better and delivering durable, sustainable long-term growth,” Smith added.

Net revenues for the North America segment increased 2% over Q3 FY24 to $6.9 billion in Q3 FY25, primarily due to net new company-operated store growth of 5% over the past 12 months. This increase was partially offset by a 2% decline in comparable store sales, driven by a 3% decline in comparable transactions, partially offset by a 1% increase in average ticket. Also contributing was a decline in our licensed store business.

Operating income decreased to $918.7 million in Q3 FY25 compared to $1.4 billion in Q3 FY24. Operating margin of 13.3% contracted from 21.0% in the prior year, primarily driven by deleverage, investments in support of “Back to Starbucks,” including additional labor and the Leadership Experience 2025, and inflation.

Net revenues for the International segment increased 9% over Q3 FY24 to $2.0 billion in Q3 FY25, primarily due to net new company-operated store growth of 7% over the past 12 months and an approximate 3% favorable impact from foreign currency translation. Also contributing was an increase in our licensed store business revenue and incremental net revenue from the acquisition of a U.K. licensed business partner.

Operating income decreased to $272.7 million in Q3 FY25 compared to $287.5 million in Q3 FY24. Operating margin of 13.6% contracted from 15.6% in the prior year, primarily driven by increased promotional activity.

Net revenues for the Channel Development segment increased 10% over Q3 FY24 to $483.8 million in Q3 FY25, primarily due to an increase in revenue in the Global Coffee Alliance.

Operating income decreased to $218.4 million in Q3 FY25 compared to $235.2 million in Q3 FY24. Operating margin of 45.1% contracted from 53.7% in the prior year, primarily driven by a decline in our North American Coffee Partnership joint venture income, mix shift, and higher global product costs.

Fiscal Year 2025 Financial Performance

The company will discuss its results during its Q3 FY25 earnings conference call starting today at 1:15 p.m. Pacific Time. These results can be accessed on the company's Investor Relations website during and after the call. The company uses its website as a tool to disclose important information about the company and comply with its disclosure obligations under Regulation Fair Disclosure.

Company Update

1. In May, the company completed a $1.75 billion bond issuance. The company intends to use the net proceeds from the sale of the securities for general corporate purposes, including repayment of upcoming debt maturities.
2. In June, the company announced that Mike Grams had been appointed chief operating officer, as well as other organizational changes to accelerate getting “Back to Starbucks.”
3. In June, the company hosted over 14,000 coffeehouse leaders from across North America at its largest ever Leadership Experience 2025. The three-day conference marked a key milestone in accelerating its “Back to Starbucks” strategy, which focuses on exceptional service, simplified routines, and deeper customer connections. During the event, the company announced the expansion of the Assistant Store Manager Role across U.S. company-operated stores, an important step toward our goal of growing talent internally and hiring 90% of retail leaders from within.
4. In June, the company announced the election of two new members to its Board of Directors (the “Board”): Marissa Mayer, Co-founder and Chief Executive Officer of Sunshine Products, Inc., and Dr. Dambisa Moyo, Co-principal of Versaca Investments. These appointments increased the Board from 9 members to 11 members.
5. The Board declared a cash dividend of $0.61 per share, payable on August 29, 2025, to shareholders of record on August 15, 2025. The company had 61 consecutive quarters of dividend payouts with CAGR of 18% over that time period, demonstrating the company's commitment to consistent value creation for shareholders.

Conference Call

Starbucks will hold a conference call today at 1:15 p.m. Pacific Time, which will be hosted by Brian Niccol, chairman and ceo, and Cathy Smith, cfo. The call will be webcast and can be accessed at http://investor.starbucks.com. A replay of the webcast will be available until end of day Friday, September 12, 2025.

About Starbucks

Since 1971, Starbucks Coffee Company has been committed to ethically sourcing and roasting high-quality arabica coffee. Today, with more than 41,000 stores worldwide, the company is the premier roaster and retailer of specialty coffee in the world. Through our unwavering commitment to excellence and our guiding principles, we bring the unique Starbucks Experience to life for every customer through every cup. To share in the experience, please visit us in our stores or online at about.starbucks.com or www.starbucks.com.

Forward-Looking Statements

Certain statements contained herein and in our investor conference call related to these results and progress towards our “Back to Starbucks” plan are “forward-looking” statements within the meaning of applicable securities laws and regulations. Generally, these statements can be identified by the use of words such as “aim,” “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “feel,” “forecast,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “will,” “would,” and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. By their nature, forward-looking statements involve risks, uncertainties, and other factors (many beyond our control) that could cause our actual results to differ materially from our historical experience or from our current expectations or projections. Our forward-looking statements, and the risks and uncertainties related thereto, include, but are not limited to, those described under the “Risk Factors” and “Management's Discussion and Analysis of Financial Condition and Results of Operations” sections of the company’s most recently filed periodic reports on Form 10-K and Form 10-Q and in other filings with the SEC, as well as, among others:

• our ability to preserve, grow, and leverage our brands, including the risk of negative responses by consumers (such as boycotts or negative publicity campaigns), governmental actors (such as retaliatory or threatened legislative treatment or other actions), or other third parties who object to certain actions taken or not taken by the Company, whose responses could adversely affect our brand value;
• the impact of our marketing strategies, promotional and advertising plans, pricing strategies, platforms, reformulations, innovations, or customer experience initiatives or investments;
• the costs and risks associated with, and the successful and timely execution and effects of, our existing and any future business opportunities, expansions, initiatives, strategies, investments, and plans, including our “Back to Starbucks” plan;
• the costs and risks associated with, and the successful and timely execution and effects of, strategic changes to our ownership and operating structure, including as a result of acquisitions, divestitures, or entry into joint ventures;
• our ability to align our investment efforts with our strategic goals;
• changes in consumer preferences, demand, consumption, or spending behavior, including due to shifts in demographic or health and wellness trends, reduction in discretionary spending and price increases, and our ability to anticipate or react to these changes;
• the ability of our business partners, suppliers, and third-party providers to fulfill their responsibilities and commitments;
• the potential negative effects of reported incidents involving food or beverage-borne illnesses, tampering, adulteration, contamination, or mislabeling;
• our ability to open new stores and efficiently maintain the attractiveness of our existing stores;
• our dependence on the financial performance of our North America operating segment, and our increasing dependence on certain international markets;
• our anticipated cash requirements and operating expenses, including our anticipated total capital expenditures;
• inherent risks of operating a global business, including changing conditions in our markets, local factors affecting store openings, protectionist trade or foreign investment policies, such as imposed or threatened to be imposed tariffs and other trade controls, economic or trade sanctions, compliance with local laws and other regulations, and local labor policies and conditions, including labor strikes and work stoppages;
• higher costs, lower quality, or unavailability of coffee, dairy, cocoa, energy, water, raw materials, or product ingredients;
• the potential impact on our supply chain and operations of adverse weather conditions, natural disasters, or significant increases in logistics costs;
• the ability of our supply chain to meet current or future business needs and our ability to scale and improve our forecasting, planning, production, and logistics management;
• a worsening in the terms and conditions upon which we engage with our manufacturers and source suppliers, whether resulting from broader local or global conditions or dynamics specific to our relationships with such parties;
• the impact of unfavorable global or regional economic conditions and related economic slowdowns or recessions, low consumer confidence, high unemployment, weak credit or capital markets, budget deficits, burdensome government debt, austerity measures, higher interest rates, higher taxes, international trade disputes, government restrictions, geopolitical instability, higher inflation, or deflation;
• failure to meet our announced guidance or market expectations and the impact thereof;
• failure to attract or retain key executive or partner talent or successfully onboard or transition executives;
• the impacts of partner investments, business transformation initiatives, including those related to our workforce, and changes in the availability and cost of labor, including any union organizing efforts and our responses to such efforts;
• the impact of foreign currency translation, particularly a stronger U.S. dollar;
• the impact of, and our ability to respond to, substantial competition from new entrants, consolidations by competitors, and other competitive activities, such as pricing actions (including price reductions, promotions, discounting, couponing, or free goods), marketing, category expansion, product introductions, or entry or expansion in our geographic markets;
• potential impacts of climate change;
• evolving corporate governance and public disclosure regulations and expectations;
• the potential impact of activist shareholder actions or tactics;
• failure to comply with applicable laws and changing legal and regulatory requirements;
• the impact or likelihood of significant legal disputes and proceedings or government investigations;
• potential negative effects of, and our ability to respond to, a material failure, inadequacy, or interruption of our information technology systems or those of our third-party business partners or service providers, or failure to comply with data protection laws; and
• our ability to adequately protect our intellectual property or adequately ensure that we are not infringing the intellectual property of others.

In addition, many of the foregoing risks and uncertainties are, or could be, exacerbated by any worsening of the global business and economic environment. A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances, and those future events or circumstances may not occur. You should not place undue reliance on the forward-looking statements, which speak only as of the date of this release. We are under no obligation to update or alter any forward-looking statements, whether as a result of new information, future events, or otherwise.

Key Metrics

We believe the company's financial results and long-term growth model will continue to be driven by new store openings, comparable store sales growth and operating margin management. We believe these key operating metrics are useful to investors because management uses these metrics to assess the growth of our business and the effectiveness of our marketing and operational strategies.

Supplemental Information

The following supplemental information is provided for historical and comparative purposes.

Non-GAAP Disclosure

In addition to the generally accepted accounting principles in the United States (GAAP) results provided in this release, the company provides certain non-GAAP financial measures that are not in accordance with, or alternatives for, GAAP. When provided to investors, our non-GAAP financial measures of non-GAAP operating income, non-GAAP operating income growth (loss), non-GAAP operating margin, non-GAAP effective tax rate and non-GAAP earnings per share exclude the below-listed item and its related tax impacts, as management believes this exclusion contributes to a more meaningful evaluation of the company’s future operating performance and comparisons to the company's past operating performance. The GAAP measures most directly comparable to non-GAAP operating income, non-GAAP operating income growth (loss), non-GAAP operating margin, non-GAAP effective tax rate and non-GAAP earnings per share are operating income, operating income growth (loss), operating margin, effective tax rate and diluted net earnings per share, respectively.

The Company also presents constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present the constant currency information, including with respect to consolidated net revenues, operating income, operating margin, and earnings per share, current period results for entities reporting in currencies other than United States dollars are converted into United States dollars using the average monthly exchange rates from the comparative period rather than the actual exchange rates in effect during the respective periods, excluding related hedging activities. We believe the presentation of results on a constant currency basis in addition to GAAP results helps users better understand our performance, because it excludes the effects of foreign currency volatility that are not indicative of our underlying operating results.

Non-GAAP operating income, non-GAAP operating income growth (loss), non-GAAP operating margin, non-GAAP effective tax rate, non-GAAP earnings per share, and constant currency may have limitations as analytical tools. These measures should not be considered in isolation or as a substitute for analysis of the company’s results as reported under GAAP. Other companies may calculate these non-GAAP financial measures differently than the company does, limiting the usefulness of those measures for comparative purposes.