UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended ~~March 28, 2021~~April 3, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number: ~~0-20322~~000-20322

Starbucks Corporation

(Exact Name of Registrant as Specified in its Charter)


Washington			91-1325671
(State or Other Jurisdiction of Incorporation or Organization)			(IRS Employer Identification No.)

2401 Utah Avenue South, Seattle, Washington 98134

(Address of principal executive offices)

(206) 447-1575

(Registrant’s Telephone Number, including Area Code)

Securities registered pursuant to Section 12(b) of the Act:


Title	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.001 per share	SBUX	~~NASDAQ~~Nasdaq Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the ~~Registrant~~registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Shares Outstanding as of April ~~21, 2021~~27, 2022
~~1,178.3~~1,146.9 million

Table of Contents

STARBUCKS CORPORATION

FORM 10-Q

For the Quarterly Period Ended ~~March 28, 2021~~April 3, 2022

Table of Contents



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	3031
Item 3	Quantitative and Qualitative Disclosures About Market Risk	4443
Item 4	Controls and Procedures	4443

PART II. OTHER INFORMATION

Item 1	Legal Proceedings	45
Item 1A	Risk Factors	45
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 3	Defaults Upon Senior Securities	45
Item 4	Mine Safety Disclosures	45
Item 5	Other Information	45
Item 6	Exhibits	46
Signatures		47

Table of Contents

PART I — FINANCIAL INFORMATION

Item 1.Financial Statements

STARBUCKS CORPORATION

CONSOLIDATED STATEMENTS OF EARNINGS

(in millions, except per share data)

(unaudited)

Quarter Ended Two Quarters Ended
Mar 28,
2021 Mar 29,
2020 Mar 28,
2021 Mar 29,
2020
Net revenues:
Company-operated stores $ 5,653.1 $ 4,766.0 $ 11,379.6 $ 10,546.6
Licensed stores 595.0 689.8 1,208.8 1,481.9
Other 419.9 539.9 829.1 1,064.3
Total net revenues 6,668.0 5,995.7 13,417.5 13,092.8
Product and distribution costs 1,992.4 1,997.7 4,041.5 4,234.2
Store operating expenses 2,823.3 2,721.4 5,690.7 5,542.9
Other operating expenses 87.7 95.0 179.5 196.7
Depreciation and amortization expenses 366.7 356.3 732.6 707.4
General and administrative expenses 464.4 406.5 936.5 840.7
Restructuring and impairments 23.0 (0.7) 95.2 5.6
Total operating expenses 5,757.5 5,576.2 11,676.0 11,527.5
Income from equity investees 77.1 67.9 159.7 141.9
Operating income 987.6 487.4 1,901.2 1,707.2
Interest income and other, net 17.3 2.0 32.7 18.0
Interest expense (115.0) (99.2) (235.8) (191.1)
Earnings before income taxes 889.9 390.2 1,698.1 1,534.1
Income tax expense 230.5 65.4 416.5 324.0
Net earnings including noncontrolling interests 659.4 324.8 1,281.6 1,210.1
Net loss attributable to noncontrolling interests 0 (3.6) 0 (4.0)
Net earnings attributable to Starbucks $ 659.4 $ 328.4 $ 1,281.6 $ 1,214.1
Earnings per share - basic $ 0.56 $ 0.28 $ 1.09 $ 1.03
Earnings per share - diluted $ 0.56 $ 0.28 $ 1.08 $ 1.02
Weighted average shares outstanding:
Basic 1,177.5 1,171.8 1,176.3 1,176.1
Diluted 1,184.8 1,180.7 1,183.9 1,185.8


	Quarter Ended				Two Quarters Ended
	Apr 3, 2022		Mar 28, 2021		Apr 3, 2022		Mar 28, 2021
Net revenues:
Company-operated stores	$	6,276.7	$	5,653.1	$	12,999.1	$	11,379.6
Licensed stores	849.5		595.0		1,700.3		1,208.8
Other	509.4		419.9		986.6		829.1
Total net revenues	7,635.6		6,668.0		15,686.0		13,417.5
Product and distribution costs	2,465.8		1,992.4		4,992.7		4,041.5
Store operating expenses	3,314.7		2,823.3		6,714.6		5,690.7
Other operating expenses	101.7		87.7		203.4		179.5
Depreciation and amortization expenses	367.7		366.7		733.8		732.6
General and administrative expenses	481.5		464.4		1,007.3		936.5
Restructuring and impairments	4.4		23.0		(3.1)		95.2
Total operating expenses	6,735.8		5,757.5		13,648.7		11,676.0
Income from equity investees	49.1		77.1		89.4		159.7
Operating income	948.9		987.6		2,126.7		1,901.2


Interest income and other, net	46.3		17.3		46.2		32.7
Interest expense	(119.1)		(115.0)		(234.4)		(235.8)
Earnings before income taxes	876.1		889.9		1,938.5		1,698.1
Income tax expense	201.1		230.5		447.4		416.5
Net earnings including noncontrolling interests	675.0		659.4		1,491.1		1,281.6
Net earnings attributable to noncontrolling interests	0.5		—		0.7		—
Net earnings attributable to Starbucks	$	674.5	$	659.4	$	1,490.4	$	1,281.6
Earnings per share - basic	$	0.59	$	0.56	$	1.29	$	1.09
Earnings per share - diluted	$	0.58	$	0.56	$	1.28	$	1.08
Weighted average shares outstanding:
Basic	1,149.2		1,177.5		1,159.4		1,176.3
Diluted	1,153.9		1,184.8		1,165.2		1,183.9

See Notes to Consolidated Financial Statements.

Table of Contents

STARBUCKS CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions, unaudited)


		Quarter Ended				Two Quarters Ended					Quarter Ended				Two Quarters Ended
		Mar 28, 2021		Mar 29, 2020		Mar 28, 2021		Mar 29, 2020			Apr 3, 2022		Mar 28, 2021		Apr 3, 2022		Mar 28, 2021
Net earnings including noncontrolling interests	Net earnings including noncontrolling interests	$	659.4	$	324.8	$	1,281.6	$	1,210.1	Net earnings including noncontrolling interests	$	675.0	$	659.4	$	1,491.1	$	1,281.6
Other comprehensive income/(loss), net of tax:	Other comprehensive income/(loss), net of tax:									Other comprehensive income/(loss), net of tax:
Unrealized holding gains/(losses) on available-for-sale debt securities	Unrealized holding gains/(losses) on available-for-sale debt securities	(2.5)		3.2		(3.0)		3.1		Unrealized holding gains/(losses) on available-for-sale debt securities	(10.5)		(2.5)		(13.9)		(3.0)
Tax (expense)/benefit	Tax (expense)/benefit	0.5		(0.7)		0.6		(0.7)		Tax (expense)/benefit	2.6		0.5		3.4		0.6
Unrealized gains/(losses) on cash flow hedging instruments	Unrealized gains/(losses) on cash flow hedging instruments	97.2		(127.9)		104.9		(95.5)		Unrealized gains/(losses) on cash flow hedging instruments	67.1		97.2		155.8		104.9
Tax (expense)/benefit	Tax (expense)/benefit	(23.9)		31.2		(26.8)		24.6		Tax (expense)/benefit	(14.2)		(23.9)		(26.0)		(26.8)
Unrealized gains/(losses) on net investment hedging instruments	Unrealized gains/(losses) on net investment hedging instruments	47.7		57.6		17.5		81.3		Unrealized gains/(losses) on net investment hedging instruments	38.1		47.7		79.6		17.5
Tax (expense)/benefit	Tax (expense)/benefit	(12.1)		(14.6)		(4.5)		(20.6)		Tax (expense)/benefit	(9.6)		(12.1)		(20.1)		(4.5)
Translation adjustment and other	Translation adjustment and other	(83.4)		(79.9)		155.3		(3.8)		Translation adjustment and other	(38.5)		(83.4)		(24.3)		155.3
Tax (expense)/benefit	Tax (expense)/benefit	2.2		1.5		2.2		1.5		Tax (expense)/benefit	—		2.2		—		2.2
Reclassification adjustment for net (gains)/losses realized in net earnings for available-for-sale debt securities, hedging instruments, and translation adjustment	Reclassification adjustment for net (gains)/losses realized in net earnings for available-for-sale debt securities, hedging instruments, and translation adjustment	(7.9)		(6.4)		(11.5)		(17.1)		Reclassification adjustment for net (gains)/losses realized in net earnings for available-for-sale debt securities, hedging instruments, and translation adjustment	(34.2)		(7.9)		(50.3)		(11.5)
Tax expense/(benefit)	Tax expense/(benefit)	1.8		1.6		3.6		3.9		Tax expense/(benefit)	6.0		1.8		8.9		3.6
Other comprehensive income/(loss)		19.6		(134.4)		238.3		(23.3)
Other comprehensive income										Other comprehensive income	6.8		19.6		113.1		238.3
Comprehensive income including noncontrolling interests	Comprehensive income including noncontrolling interests	679.0		190.4		1,519.9		1,186.8		Comprehensive income including noncontrolling interests	681.8		679.0		1,604.2		1,519.9
Comprehensive income/(loss) attributable to noncontrolling interests		0		(3.6)		0		(4.0)
Comprehensive income attributable to noncontrolling interests										Comprehensive income attributable to noncontrolling interests	0.5		—		0.7		—
Comprehensive income attributable to Starbucks	Comprehensive income attributable to Starbucks	$	679.0	$	194.0	$	1,519.9	$	1,190.8	Comprehensive income attributable to Starbucks	$	681.3	$	679.0	$	1,603.5	$	1,519.9

See Notes to Consolidated Financial Statements.

Table of Contents

STARBUCKS CORPORATION

CONSOLIDATED BALANCE SHEETS

(in millions, except per share data)

(unaudited)


	Apr 3, 2022		Oct 3, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	3,913.4	$	6,455.7
Short-term investments	82.1		162.2
Accounts receivable, net	1,001.9		940.0
Inventories	1,920.0		1,603.9
Prepaid expenses and other current assets	623.7		594.6
Total current assets	7,541.1		9,756.4
Long-term investments	285.6		281.7
Equity investments	270.8		268.5
Property, plant and equipment, net	6,460.8		6,369.5
Operating lease, right-of-use asset	8,170.2		8,236.0
Deferred income taxes, net	1,809.4		1,874.8
Other long-term assets	582.8		578.5
Other intangible assets	254.7		349.9
Goodwill	3,646.1		3,677.3
TOTAL ASSETS	$	29,021.5	$	31,392.6
LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIT)
Current liabilities:
Accounts payable	$	1,329.5	$	1,211.6
Accrued liabilities	2,092.4		2,321.2
Accrued payroll and benefits	665.9		772.3
Current portion of operating lease liability	1,236.3		1,251.3
Stored value card liability and current portion of deferred revenue	1,781.6		1,596.1

Current portion of long-term debt	1,998.6		998.9
Total current liabilities	9,104.3		8,151.4
Long-term debt	14,014.4		13,616.9
Operating lease liability	7,668.5		7,738.0
Deferred revenue	6,381.9		6,463.0
Other long-term liabilities	613.6		737.8
Total liabilities	37,782.7		36,707.1
Shareholders' deficit:
Common stock ($0.001 par value) — authorized, 2,400.0 shares; issued and outstanding, 1,146.9 and 1,180.0 shares, respectively	1.1		1.2
Additional paid-in capital	41.1		846.1
Retained deficit	(9,070.5)		(6,315.7)
Accumulated other comprehensive income	260.3		147.2
Total shareholders’ deficit	(8,768.0)		(5,321.2)
Noncontrolling interests	6.8		6.7
Total deficit	(8,761.2)		(5,314.5)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIT)	$	29,021.5	$	31,392.6

Mar 28,
2021 Sep 27,
2020
ASSETS
Current assets:
Cash and cash equivalents $ 3,880.7 $ 4,350.9
Short-term investments 123.0 281.2
Accounts receivable, net 880.2 883.4
Inventories 1,503.6 1,551.4
Prepaid expenses and other current assets 592.0 739.5
Total current assets 6,979.5 7,806.4
Long-term investments 284.8 206.1
Equity investments 499.4 478.7
Property, plant and equipment, net 6,123.1 6,241.4
Operating lease, right-of-use asset 8,036.8 8,134.1
Deferred income taxes, net 1,770.0 1,789.9
Other long-term assets 574.9 568.6
Other intangible assets 444.3 552.1
Goodwill 3,658.9 3,597.2
TOTAL ASSETS $ 28,371.7 $ 29,374.5
LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIT)
Current liabilities:
Accounts payable $ 1,033.6 $ 997.9
Accrued liabilities 1,771.6 1,160.7
Accrued payroll and benefits 646.1 696.0
Income taxes payable 117.0 98.2
Current portion of operating lease liability 1,296.4 1,248.8
Stored value card liability and current portion of deferred revenue 1,622.1 1,456.5
Short-term debt 18.3 438.8
Current portion of long-term debt 0 1,249.9
Total current liabilities 6,505.1 7,346.8
Long-term debt 14,630.3 14,659.6
Operating lease liability 7,577.7 7,661.7
Deferred revenue 6,532.1 6,598.5
Other long-term liabilities 774.8 907.3
Total liabilities 36,020.0 37,173.9
Shareholders' deficit:
Common stock ($0.001 par value) — authorized, 2,400.0 shares; issued and outstanding, 1,177.9 and 1,173.3 shares, respectively 1.2 1.2
Additional paid-in capital 595.4 373.9
Retained deficit (8,124.3) (7,815.6)
Accumulated other comprehensive loss (126.3) (364.6)
Total shareholders’ deficit (7,654.0) (7,805.1)
Noncontrolling interests 5.7 5.7
Total deficit (7,648.3) (7,799.4)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIT) $ 28,371.7 $ 29,374.5

See Notes to Consolidated Financial Statements.

Table of Contents

STARBUCKS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions, unaudited)

Two Quarters Ended
Mar 28,
2021 Mar 29,
2020
OPERATING ACTIVITIES:
Net earnings including noncontrolling interests $ 1,281.6 $ 1,210.1
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization 772.9 746.9
Deferred income taxes, net (25.2) 47.7
Income earned from equity method investees (131.3) (116.3)
Distributions received from equity method investees 130.2 98.1
Stock-based compensation 175.3 146.6
Non-cash lease costs 617.9 596.3
Loss on retirement and impairment of assets 175.4 30.9
Other (15.4) 36.8
Cash provided by/(used in) changes in operating assets and liabilities:
Accounts receivable 12.8 (60.7)
Inventories 51.3 36.9
Prepaid expenses and other current assets 139.7 (247.7)
Income taxes payable 40.0 (1,227.4)
Accounts payable 21.3 (186.4)
Deferred revenue 89.8 112.1
Operating lease liability (676.3) (608.6)
Other operating assets and liabilities 59.5 (140.5)
Net cash provided by operating activities 2,719.5 474.8
INVESTING ACTIVITIES:
Purchases of investments (321.7) (65.1)
Sales of investments 121.7 93.7
Maturities and calls of investments 289.0 4.3
Additions to property, plant and equipment (647.9) (758.3)
Other (20.1) (22.5)
Net cash used in investing activities (579.0) (747.9)
FINANCING ACTIVITIES:
Net proceeds/(payments) from issuance of commercial paper (296.5) 613.0
Net proceeds from issuance of short-term debt 203.3 494.1
Repayments of short-term debt (320.5) 0
Proceeds from issuance of long-term debt 0 1,739.7
Repayments of long-term debt (1,250.0) 0
Proceeds from issuance of common stock 134.4 65.4
Cash dividends paid (1,058.0) (965.2)
Repurchase of common stock 0 (1,698.9)
Minimum tax withholdings on share-based awards (90.1) (87.6)
Other 0 (10.4)
Net cash provided by/(used in) financing activities (2,677.4) 150.1
Effect of exchange rate changes on cash and cash equivalents 66.7 8.7
Net decrease in cash and cash equivalents (470.2) (114.3)
CASH AND CASH EQUIVALENTS:
Beginning of period 4,350.9 2,686.6
End of period $ 3,880.7 $ 2,572.3
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest, net of capitalized interest $ 250.8 $ 186.3
Income taxes $ 236.2 $ 1,726.2


	Two Quarters Ended
	Apr 3, 2022		Mar 28, 2021
OPERATING ACTIVITIES:
Net earnings including noncontrolling interests	$	1,491.1	$	1,281.6
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	777.7		772.9
Deferred income taxes, net	28.4		(25.2)
Income earned from equity method investees	(118.7)		(131.3)
Distributions received from equity method investees	100.8		130.2


Stock-based compensation	149.2		175.3

Non-cash lease costs	670.7		617.9
Loss on retirement and impairment of assets	77.3		175.4
Other	(17.9)		(15.4)
Cash provided by/(used in) changes in operating assets and liabilities:
Accounts receivable	(62.1)		12.8
Inventories	(324.9)		51.3
Prepaid expenses and other current assets	(120.7)		139.7

Accounts payable	133.0		21.3
Deferred revenue	110.2		89.8
Operating lease liability	(766.3)		(676.3)
Other operating assets and liabilities	(95.0)		99.5
Net cash provided by operating activities	2,032.8		2,719.5
INVESTING ACTIVITIES:
Purchases of investments	(67.5)		(321.7)
Sales of investments	72.6		121.7
Maturities and calls of investments	55.7		289.0

Additions to property, plant and equipment	(871.9)		(647.9)


Other	(69.8)		(20.1)
Net cash used in investing activities	(880.9)		(579.0)
FINANCING ACTIVITIES:
Net proceeds/(payments) from issuance of commercial paper	—		(296.5)
Net proceeds from issuance of short-term debt	17.4		203.3
Repayments of short-term debt	(12.6)		(320.5)
Proceeds from issuance of long-term debt	1,498.1		—
Repayments of long-term debt	—		(1,250.0)

Proceeds from issuance of common stock	56.3		134.4
Cash dividends paid	(1,139.2)		(1,058.0)
Repurchase of common stock	(3,997.5)		—
Minimum tax withholdings on share-based awards	(122.1)		(90.1)
Other	(9.2)		—
Net cash used in financing activities	(3,708.8)		(2,677.4)
Effect of exchange rate changes on cash and cash equivalents	14.6		66.7
Net increase/(decrease) in cash and cash equivalents	(2,542.3)		(470.2)
CASH AND CASH EQUIVALENTS:
Beginning of period	6,455.7		4,350.9
End of period	$	3,913.4	$	3,880.7
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest, net of capitalized interest	$	236.0	$	250.8
Income taxes	$	783.2	$	236.2

See Notes to Consolidated Financial Statements.

Table of Contents

STARBUCKS CORPORATION

CONSOLIDATED STATEMENTS OF EQUITY

For the Quarters Ended April 3, 2022 and March 28, 2021 ~~and March 29, 2020~~

(in millions, except per share data, unaudited)

Common Stock Additional Paid-in Capital Retained
Earnings/(Deficit) Accumulated
Other
Comprehensive
Income/(Loss) Shareholders’
Equity/(Deficit) Noncontrolling
Interests Total
Shares Amount
Balance, December 27, 2020 1,177.2 $ 1.2 $ 488.6 $ (8,253.6) $ (145.9) $ (7,909.7) $ 5.7 $ (7,904.0)
Net earnings — 0 0 659.4 0 659.4 0 659.4
Other comprehensive income/(loss) — 0 0 0 19.6 19.6 0 19.6
Stock-based compensation expense — 0 76.7 0 0 76.7 0 76.7
Exercise of stock options/vesting of RSUs 0.6 0 20.0 0 0 20.0 0 20.0
Sale of common stock 0.1 0 10.1 0 0 10.1 0 10.1
Cash dividends declared, $0.45 per share — 0 0 (530.1) 0 (530.1) 0 (530.1)
Balance, March 28, 2021 1,177.9 $ 1.2 $ 595.4 $ (8,124.3) $ (126.3) $ (7,654.0) $ 5.7 $ (7,648.3)
Balance, December 29, 2019 1,174.5 $ 1.2 $ 41.1 $ (6,414.8) $ (387.4) $ (6,759.9) $ 0.8 $ (6,759.1)
Net earnings/(loss) — 0 0 328.4 0 328.4 (3.6) 324.8
Other comprehensive income/(loss) — 0 0 0 (134.4) (134.4) 0 (134.4)
Stock-based compensation expense — 0 57.1 0 0 57.1 0 57.1
Exercise of stock options/vesting of RSUs 0.8 0 13.6 0 0 13.6 0 13.6
Sale of common stock 0.1 0 9.6 0 0 9.6 0 9.6
Repurchase of common stock (7.3) 0 (80.3) (486.8) 0 (567.1) 0 (567.1)
Cash dividends declared, $0.41 per share — 0 0 (477.4) 0 (477.4) 0 (477.4)
Balance, March 29, 2020 1,168.1 $ 1.2 $ 41.1 $ (7,050.6) $ (521.8) $ (7,530.1) $ (2.8) $ (7,532.9)


	Common Stock			Additional Paid-in Capital		Retained Earnings/(Deficit)		Accumulated Other Comprehensive Income/(Loss)		Shareholders’ Equity/(Deficit)		Noncontrolling Interests		Total
	Shares	Amount
Balance, January 2, 2022	1,151.6	$	1.2	$	41.1	$	(8,753.0)	$	253.5	$	(8,457.2)	$	6.9	$	(8,450.3)

Net earnings	—	—		—		674.5		—		674.5		0.5		675.0
Other comprehensive income	—	—		—		—		6.8		6.8		—		6.8
Stock-based compensation expense	—	—		54.4		—		—		54.4		—		54.4
Exercise of stock options/vesting of RSUs	0.4	(0.1)		(4.4)		—		—		(4.5)		—		(4.5)
Sale of common stock	0.1	—		11.0		—		—		11.0		—		11.0
Repurchase of common stock	(5.2)	—		(61.0)		(431.1)		—		(492.1)		—		(492.1)
Cash dividends declared, $0.49 per share	—	—		—		(560.9)		—		(560.9)		—		(560.9)
Net distributions to noncontrolling interests	—	—		—		—		—		—		(0.6)		(0.6)
Balance, April 3, 2022	1,146.9	$	1.1	$	41.1	$	(9,070.5)	$	260.3	$	(8,768.0)	$	6.8	$	(8,761.2)

Balance, December 27, 2020	1,177.2	$	1.2	$	488.6	$	(8,253.6)	$	(145.9)	$	(7,909.7)	$	5.7	$	(7,904.0)

Net earnings	—	—		—		659.4		—		659.4		—		659.4
Other comprehensive income	—	—		—		—		19.6		19.6		—		19.6
Stock-based compensation expense	—	—		76.7		—		—		76.7		—		76.7
Exercise of stock options/vesting of RSUs	0.6	—		20.0		—		—		20.0		—		20.0
Sale of common stock	0.1	—		10.1		—		—		10.1		—		10.1

Cash dividends declared, $0.45 per share	—	—		—		(530.1)		—		(530.1)		—		(530.1)

Balance, March 28, 2021	1,177.9	$	1.2	$	595.4	$	(8,124.3)	$	(126.3)	$	(7,654.0)	$	5.7	$	(7,648.3)

See Notes to Consolidated Financial Statements.

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STARBUCKS CORPORATION

CONSOLIDATED STATEMENTS OF EQUITY

For the Two Quarters Ended April 03, 2022 and March 28, 2021 ~~and March 29, 2020~~

(in millions, except per share data, unaudited)

Common Stock Additional Paid-in Capital Retained
Earnings/(Deficit) Accumulated
Other
Comprehensive
Income/(Loss) Shareholders’
Equity/(Deficit) Noncontrolling
Interests Total
Shares Amount
Balance, September 27, 2020 1,173.3 $ 1.2 $ 373.9 $ (7,815.6) $ (364.6) $ (7,805.1) $ 5.7 $ (7,799.4)
Cumulative effect of adoption of new accounting guidance — 0 0 (2.2) 0 (2.2) 0 (2.2)
Net earnings — 0 0 1,281.6 0 1,281.6 0 1,281.6
Other comprehensive income/(loss) — 0 0 0 238.3 238.3 0 238.3
Stock-based compensation expense — 0 177.2 0 0 177.2 0 177.2
Exercise of stock options/vesting of RSUs 4.4 0 24.0 0 0 24.0 0 24.0
Sale of common stock 0.2 0 20.3 0 0 20.3 0 20.3
Cash dividends declared, $1.35 per share — 0 0 (1,588.1) 0 (1,588.1) 0 (1,588.1)
Balance, March 28, 2021 1,177.9 $ 1.2 $ 595.4 $ (8,124.3) $ (126.3) $ (7,654.0) $ 5.7 $ (7,648.3)
Balance, September 29, 2019 1,184.6 $ 1.2 $ 41.1 $ (5,771.2) $ (503.3) $ (6,232.2) $ 1.2 $ (6,231.0)
Cumulative effect of adoption of new accounting guidance — 0 0 12.5 4.8 17.3 0 17.3
Net earnings/(loss) — 0 0 1,214.1 0 1,214.1 (4.0) 1,210.1
Other comprehensive income/(loss) — 0 0 0 (23.3) (23.3) 0 (23.3)
Stock-based compensation expense — 0 148.4 0 0 148.4 0 148.4
Exercise of stock options/vesting of RSUs 3.6 0 (40.5) 0 0 (40.5) 0 (40.5)
Sale of common stock 0.2 0 18.5 0 0 18.5 0 18.5
Repurchase of common stock (20.3) 0 (126.4) (1,548.6) 0 (1,675.0) 0 (1,675.0)
Cash dividends declared, $0.82 per share — 0 0 (957.4) 0 (957.4) 0 (957.4)
Balance, March 29, 2020 1,168.1 $ 1.2 $ 41.1 $ (7,050.6) $ (521.8) $ (7,530.1) $ (2.8) $ (7,532.9)


	Common Stock			Additional Paid-in Capital		Retained Earnings/(Deficit)		Accumulated Other Comprehensive Income/(Loss)		Shareholders’ Equity/(Deficit)		Noncontrolling Interests		Total
	Shares	Amount
Balance, October 3, 2021	1,180.0	$	1.2	$	846.1	$	(6,315.7)	$	147.2	$	(5,321.2)	$	6.7	$	(5,314.5)

Net earnings	—	—		—		1,490.4		—		1,490.4		0.7		1,491.1
Other comprehensive income/(loss)	—	—		—		—		113.1		113.1		—		113.1
Stock-based compensation expense	—	—		151.5		—		—		151.5		—		151.5
Exercise of stock options/vesting of RSUs	3.0	(0.1)		(88.5)		—		—		(88.6)		—		(88.6)
Sale of common stock	0.2	—		22.8		—		—		22.8		—		22.8
Repurchase of common stock	(36.3)	—		(890.8)		(3,122.2)		—		(4,013.0)		—		(4,013.0)
Cash dividends declared, $0.98 per share	—	—		—		(1,123.0)		—		(1,123.0)		—		(1,123.0)
Net distributions to noncontrolling interests	—	—		—		—		—		—		(0.6)		(0.6)
Balance, April 3, 2022	1,146.9	$	1.1	$	41.1	$	(9,070.5)	$	260.3	$	(8,768.0)	$	6.8	$	(8,761.2)

Balance, September 27, 2020	1,173.3	$	1.2	$	373.9	$	(7,815.6)	$	(364.6)	$	(7,805.1)	$	5.7	$	(7,799.4)
Cumulative effect of adoption of new accounting guidance	—	—		—		(2.2)		—		(2.2)		—		(2.2)
Net earnings	—	—		—		1,281.6		—		1,281.6		—		1,281.6
Other comprehensive income/(loss)	—	—		—		—		238.3		238.3		—		238.3
Stock-based compensation expense	—	—		177.2		—		—		177.2		—		177.2
Exercise of stock options/vesting of RSUs	4.4	—		24.0		—		—		24.0		—		24.0
Sale of common stock	0.2	—		20.3		—		—		20.3		—		20.3

Cash dividends declared, $1.35 per share	—	—		—		(1,588.1)		—		(1,588.1)		—		(1,588.1)

Balance, March 28, 2021	1,177.9	$	1.2	$	595.4	$	(8,124.3)	$	(126.3)	$	(7,654.0)	$	5.7	$	(7,648.3)

See Notes to Consolidated Financial Statements.

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STARBUCKS CORPORATION

INDEX FOR NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 1	Summary of Significant Accounting Policies and Estimates	10

Note 2	Derivative Financial Instruments	1112
Note 3	Fair Value Measurements	1617
Note 4	Inventories	1819
Note 5	Supplemental Balance Sheet and Statement of Earnings Information	1819
Note 6	Other Intangible Assets and Goodwill	1920
Note 7	Debt	2022
Note 8	Leases	2224
Note 9	Deferred Revenue	2325
Note 10	Equity	2526
Note 11	Employee Stock Plans	2627

Note 12	~~Income Taxes~~	27
~~Note 13~~	Earnings per Share	2728
Note 1413	Commitments and Contingencies	2728
Note 1514	Segment Reporting	2829

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STARBUCKS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 1: Summary of Significant Accounting Policies and Estimates

Financial Statement Preparation

The unaudited consolidated financial statements as of ~~March 28, 2021,~~April 3, 2022, and for the quarter and two quarters ended April 3, 2022 and March 28, 2021, ~~and March 29, 2020,~~ 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 quarter and two quarters ended April 3, 2022 and March 28, 2021 ~~and March 29, 2020~~ 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 is referred to as “Starbucks,” the “Company,” “we,” “us” or “our.”

Segment information is prepared on the same basis that our management reviews financial information for operational decision-making purposes. In the fourth quarter of fiscal 2021, certain changes were made to our management team, and our operating segment reporting structure was realigned as a result. We realigned our fully licensed Latin America and Caribbean markets from our Americas operating segment to our International operating segment. We renamed the Americas operating segment to the North America operating segment, since it is comprised of our company-operated and licensed stores in the U.S. and Canada. We also made certain other immaterial changes between our International operating segment and Corporate and Other. Certain prior period information ~~on the consolidated statements of cash flows~~for our North America and International operating segments and our Corporate and Other reportable segment has been reclassified to conform to the current year presentation. There was no impact on consolidated net revenues, total operating expenses, operating income or net earnings per share as a result of these changes.

Certain prior period information on the consolidated balance sheets and consolidated statements of cash flows have been reclassified to conform to the current presentation.

The financial information as of ~~September 27, 2020~~October 3, 2021 is derived from our audited consolidated financial statements and notes for the fiscal year ended ~~September 27, 2020~~October 3, 2021 (“fiscal ~~2020”~~2021”) included in Item 8 in the Fiscal ~~2020~~2021 Annual Report on Form 10-K (“10-K”). The information included in this 10-Q should be read in conjunction with the footnotes and management’s discussion and analysis of the consolidated financial statements in the 10-K.

The results of operations for the quarter and two quarters ended ~~March 28, 2021~~April 3, 2022 are not necessarily indicative of the results of operations that may be achieved for the entire fiscal year ending October ~~3, 2021~~2, 2022 (“fiscal ~~2021”~~2022”). ~~Additionally, our 2021~~Our fiscal year ~~will include~~ends on the Sunday closest to September 30. Our fiscal 2022 year includes 52 weeks while our fiscal 2021 year included 53 weeks, with the 53rd week falling in the fourth quarter of fiscal ~~quarter.~~2021.

The novel coronavirus, known as the global COVID-19 pandemic, ~~COVID-19,~~ was first identified in December 2019 before spreading to markets where we have company-operated or licensed stores. We have since established the necessary protocols to operate safely, and our businesses demonstrated powerful momentum beyond recovery from the COVID-19 pandemic. Certain markets, primarily China, continue to ~~recover~~experience pandemic-related restrictions impacting sales as ~~sales in~~they battle COVID-19 resurgences and navigate through prolonged lockdowns. We continue to monitor the ~~U.S.~~COVID-19 pandemic and ~~China,~~its effect on our ~~two lead growth markets, have returned to roughly pre-pandemic levels. As~~business and results of operations; however, we cannot predict the duration, scope or severity of the ~~end~~COVID-19 pandemic or its future impact on our business, results of ~~the second quarter of fiscal 2021, nearly all our company-operated~~operations, cash flows and ~~licensed stores have re-opened; however, many were operating at less than full capacity.~~financial condition.

Government Subsidies

~~On March 27, 2020,~~In response to the COVID-19 pandemic, certain governments have provided subsidies and assistance to companies. The most substantial of these were the U.S. ~~government enacted the~~ Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”)~~, which among other things, provides employer payroll tax credits for wages paid to employees who are unable to work during the COVID-19 outbreak~~ and options to defer payroll tax payments for a limited period. Based on our evaluation of the CARES Act, we qualify for certain employer payroll tax credits as well as the deferral of payroll tax payments in the future. Additionally, the Canadian government enacted the Canada Emergency Wage Subsidy ~~(“CEWS”~~("CEWS") ~~to help employers offset a portion~~, which were no longer applicable in late fiscal 2021. However, during the quarter and two quarters ended April 3, 2022, an international government COVID-19 related subsidy reduced our store operating expenses by $12.4 million and $23.9 million, respectively, on our consolidated statements of ~~their employee wages for a limited period. We elected to treat qualified government subsidies from the U.S., Canada and other governments as offsets to the related operating expenses.~~earnings. During the quarter and two quarters ended March 28, 2021, qualified payroll and other credits reduced our store operating expenses by $97.4 million and $117.2 million, respectively, on our consolidated ~~statement of earnings. During the quarter ended March 29, 2020, the qualified payroll tax credits reduced our store operating expenses by approximately $35 million on our consolidated statement~~statements of earnings. After netting the qualified credits against our payable, a receivable of ~~$158.6~~$97.1 million and $172.4 million was included in prepaid expenses and other current assets as of ~~March 28, 2021. During the quarter~~April 3, 2022 and ~~two quarters ended March 28,~~October 3, 2021, werespectively. As of April 3, 2022, deferred ~~$5.2 million and $81.7 million, respectively, of qualified~~ payroll tax payments ~~and as~~ of ~~March 28,~~$116.4 million were included in accrued liabilities on our consolidated balance sheets. As of October 3, 2021, deferred payroll tax payments of $116.4 million were included in both accrued liabilities and other long-term liabilities ~~respectively,~~ on our consolidated balance sheets.

Restructuring

In fiscal ~~2020,~~2021, we ~~announced a~~substantially completed our plan to ~~optimize~~reposition our North America store portfolio, primarily in dense metropolitan markets by ~~developing~~pursuing strategic store closures and focusing on new store formats tothat better cater to changing customer tastes and preferences. ~~As of March 28, 2021, we expect the total number of closures to be approximately 800 stores in the U.S. and Canada and have identified 760 stores for closure under our restructuring plans.~~ As a result, we recorded approximately $23.0 million and $95.2 million to restructuring and

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impairments on our consolidated ~~statement~~statements of earnings during the quarter ended and two quarters ended March 28, ~~2021, respectively.~~2021. Of these totals, $8.6 million and $51.2 million related to the impairment of store assets for which either a triggering event occurred and the assets were determined not to be recoverable or the store was permanently closed, respectively. During the quarter and two quarters ended March 28, 2021, an additional $14.4 million and $44.0 million, respectively, was associated with accelerated amortization of right-of-use (“ROU”) lease assets and other lease costs due to planned store closures prior to the end of contractual lease terms. ~~For impaired store asset groups,~~As the restructuring plan was substantially completed in fiscal 2021, we estimated the fair values using an income approach incorporating internal projections of revenue growth and operating expenses that are considered Level 3 fair value measurements, as well as applicable discount

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~~rates and market lease rates. The application of these projections and fair value measurements~~ did not ~~have a significant impact~~recognize any material restructuring and impairment amounts during the quarter and two quarters ended April 3, 2022. As of April 3, 2022 and October 3, 2021, there were no material restructuring-related accrued liabilities on our ~~final impairment decisions given that we plan to fully exit the majority of these identified stores over the next 9 to 12 months.~~

We expect total future restructuring costs, which are attributable to our Americas segment, to be approximately $30 million to $40 million. These restructuring costs primarily include accelerated amortization or impairments of ROU assets due to planned store closures prior to the end of contractual lease terms. The remainingconsolidated balance includes store impairment and disposal costs not previously recorded as part of our ongoing store impairment process and employee termination costs. As we have previously recorded impairment charges for stores that may be identified for closure under our plans, and because store closure decisions are still subject to change, the final costs associated with these store closures may vary from these estimates. These costs will depend on the asset carrying value and remaining lease term of the specific stores identified. Future restructuring costs are expected to be incurred primarily over the next 9 to 12 months as stores are specifically identified for closure or, in the case of lease exit costs, either when a store ceases operations or when a reduced lease term is reasonably certain due to expected, early lease termination.

As of March 28, 2021, restructuring liabilities totaling $21.4 million were included in current and non-current operating lease liability for the remaining outstanding rent liabilities due to landlords. The associated expense was recognized in fiscal 2020 or during the first two quarters of fiscal 2021 for stores that were either closed or reasonably certain to close under the plan. Additionally, $10.4 million of accrued employee termination costs was included in accrued payroll and benefits. Cash payments were $23.2 million for the first two quarters of fiscal 2021.sheets.

Recently Adopted Accounting Pronouncements

In ~~June 2016,~~the first quarter of fiscal 2022, we adopted the Financial Accounting Standards Board ~~("FASB"~~(“FASB”) issued guidance related to reference rate reform. The pronouncement provides temporary optional expedients and exceptions to the current guidance on contract modifications and hedge accounting to ease the financial reporting burden related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. The guidance was effective upon issuance and generally can be applied to applicable contract modifications through December 31, 2022. The adoption of the new guidance did not have a material impact to our financial statements.

In June 2016, the FASB issued guidance replacing the incurred loss impairment methodology with a new methodology that reflects current expected credit losses on financial assets, including receivables and available-for-sale securities. The new methodology requires entities to estimate and recognize expected credit losses each reporting period. The guidance was adopted during the first quarter of fiscal 2021 under the modified retrospective approach and resulted in a $2.2 million transition adjustment to opening shareholders' retained deficit on our consolidated statements of equity.

~~Recent Accounting Pronouncements Not Yet Adopted~~

In March 2020, the FASB issued guidance related to reference rate reform. The pronouncement provides temporary optional expedients and exceptions to the current guidance on contract modifications and hedge accounting to ease the financial reporting burden related to the expected market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates. The guidance was effective upon issuance and generally can be applied to applicable contract modifications through December 31, 2022. We are currently evaluating the impact of the transition from LIBOR to alternative reference rates but do not expect a significant impact to our consolidated financial statements.

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Note 2: 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 and treasury locks, which are synthetic forward sales of U.S. ~~treasury~~Treasury securities settled in cash based upon the difference between an agreed-upon treasury rate and the prevailing treasury rate at settlement. These agreements are cash settled at 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 7, Debt, for additional information on our long-term debt.

Foreign Currency

To reduce cash flow volatility from foreign currency fluctuations, we enter into forward and swap contracts to hedge portions of cash flows of anticipated intercompany royalty payments, 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

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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.

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;~~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 4, 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, the related accumulated derivative gains or losses are recognized in interest income and other, net on our consolidated statements of earnings. ~~During~~Due to ongoing global supply chain disruptions, certain coffee cash flow hedges have been de-designated early which resulted in insignificant amounts recognized in earnings during the quarter and two quarters ended ~~March 29, 2020, we de-designated certain~~April 3, 2022. These derivatives may be accounted for prospectively as non-designated derivatives until maturity, re-designated to new hedging relationships or terminate early. We continue to believe transactions related to our other designated cash flow hedges ~~due~~are probable to the global COVID-19 impacts, which resulted in the release of an insignificant net gain from AOCI to our consolidated statement of earnings. There were no significant cash flow hedge de-designations in fiscal 2021.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.

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Gains and losses on derivative contracts and foreign currency-denominated debt designated as hedging instruments included in AOCI and expected to be reclassified into earnings within 12 months, net of tax (in millions):

Net Gains/(Losses)
Included in AOCI
Net Gains/(Losses) Expected to be Reclassified from AOCI into Earnings within 12 Months
Outstanding Contract/Debt Remaining Maturity
(Months)
Mar 28, 2021 Sep 27, 2020
Cash Flow Hedges:
Coffee $ 15.3 $ (2.5) $ 9.5 12
Cross-currency swaps 5.3 5.2 0 44
Dairy 0.2 0.5 0.2 5
Foreign currency - other (9.5) 5.3 (4.9) 34
Interest rates (17.0) (90.6) (0.7) 139
Net Investment Hedges:
Cross-currency swaps 19.9 32.6 0 102
Foreign currency 16.0 16.0 0 0
Foreign currency debt (16.3) (37.1) 0 36


	Net Gains/(Losses) Included in AOCI				Net Gains/(Losses) Expected to be Reclassified from AOCI into Earnings within 12 Months		Outstanding Contract/Debt Remaining Maturity (Months)
	Apr 3, 2022		Oct 3, 2021
Cash Flow Hedges:
Coffee	$	260.6	$	197.8	$	244.9	9
Cross-currency swaps	—		4.4		—		32
Dairy	3.7		(0.4)		3.7		11
Foreign currency - other	5.1		1.3		2.6		33
Interest rates	(17.7)		(44.8)		(1.1)		127
Net Investment Hedges:
Cross-currency swaps	43.5		37.9		—		90
Foreign currency	16.0		16.0		—		0
Foreign currency debt	43.5		(5.3)		—		24

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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 ~~OCI~~other comprehensive income (“OCI”) and reclassifications from AOCI to earnings (in millions):

Quarter Ended
Gains/(Losses) Recognized in
OCI Before Reclassifications
Gains/(Losses) Reclassified from
AOCI to Earnings
Location of gain/(loss)
Mar 28, 2021 Mar 29, 2020 Mar 28, 2021 Mar 29, 2020
Cash Flow Hedges:
Coffee $ 5.7 $ (12.1) $ (3.4) $ 0 Product and distribution costs
Cross-currency swaps 13.8 2.9 0.6 (0.4) Interest expense
13.5 0.2 Interest income and other, net
Dairy (0.9) (4.9) (0.6) 0.7 Product and distribution costs
0 (0.6)
Interest income and other, net(1)
Foreign currency - other 7.1 26.8 0.2 0.9 Licensed stores revenues
(1.9) (1.0) Product and distribution costs
0 2.0
Interest income and other, net(1)
Interest rates 71.5 (140.6) (0.5) 0.5 Interest expense
(3.6) 0 Interest income and other, net
Net Investment Hedges:
Cross-currency swaps 6.1 58.0 3.4 3.9 Interest expense
Foreign currency debt 41.6 (0.4) 0 0
(1)As a result of the global COVID-19 impacts, Starbucks discontinued cash flow hedges during the quarter ended March 29, 2020.
Two Quarters Ended
Gains/(Losses) Recognized in
OCI Before Reclassifications Gains/(Losses) Reclassified from
AOCI to Earnings Location of gain/(loss)
Mar 28, 2021 Mar 29, 2020 Mar 28, 2021 Mar 29, 2020
Cash Flow Hedges:
Coffee 17.7 (1.1) (2.7) 0 Product and distribution costs
Cross-currency swaps 10.4 9.1 1.6 (0.6) Interest expense
8.7 5.8 Interest income and other, net
Dairy 1.6 (5.0) 2.0 0.7 Product and distribution costs
0 (0.6)
Interest income and other, net(1)
Foreign currency - other (18.8) 22.1 0.2 2.6 Licensed stores revenues
(1.9) (1.3) Product and distribution costs
0 2.0
Interest income and other, net(1)
Interest rates 94.0 (120.6) (1.1) 1.3 Interest expense
(3.6) 0 Interest income and other, net
Net Investment Hedges:
Cross-currency swaps (10.4) 68.7 6.6 7.2 Interest expense
Foreign currency debt 27.9 12.6 0 0
(1)As a result of the global COVID-19 impacts, Starbucks discontinued cash flow hedges during the two quarters ended March 29, 2020.


	Quarter Ended
	Gains/(Losses) Recognized in OCI Before Reclassifications			Gains/(Losses) Reclassified from AOCI to Earnings				Location of gain/(loss)
		Apr 3, 2022		Mar 28, 2021		Apr 3, 2022				Mar 28, 2021
Cash Flow Hedges:
Coffee		$	24.0	$	5.7	$	17.8	$	(3.4)		Product and distribution costs

Cross-currency swaps		4.9		13.8		(0.8)		0.6			Interest expense
						9.4		13.5			Interest income and other, net
Dairy		3.4		(0.9)		2.9		(0.6)			Product and distribution costs

Foreign currency - other		0.7		7.1		2.4		0.2			Licensed stores revenue
						(0.3)		(1.9)			Product and distribution costs

Interest rates		34.1		71.5		(0.5)		(0.5)			Interest expense
						—		(3.6)			Interest income and other, net
Net Investment Hedges:
Cross-currency swaps		(2.1)		6.1		3.5		3.4			Interest expense

Foreign currency debt		40.2		41.6		—		—



		Two Quarters Ended
		Gains/(Losses) Recognized in OCI Before Reclassifications				Gains/(Losses) Reclassified from AOCI to Earnings					Location of gain/(loss)
		Apr 3, 2022		Mar 28, 2021		Apr 3, 2022		Mar 28, 2021
Cash Flow Hedges:
Coffee		95.5		17.7		24.3		(2.7)			Product and distribution costs
Cross-currency swaps		9.4		10.4		(1.6)		1.6			Interest expense
						16.3		8.7			Interest income and other, net
Dairy		8.0		1.6		2.5		2.0			Product and distribution costs

Foreign currency - other		7.6		(18.8)		4.5		0.2			Licensed stores revenue
						(1.7)		(1.9)			Product and distribution costs

Interest rates		35.3		94.0		(0.9)		(1.1)			Interest expense
						—		(3.6)			Interest income and other, net
Net Investment Hedges:
Cross-currency swaps		14.2		(10.4)		6.9		6.6			Interest expense

Foreign currency debt		65.4		27.9		—		—

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Pre-tax gains and losses on non-designated derivatives and designated fair value hedging instruments and the related fair value hedged item recognized in earnings (in millions):


			Gains/(Losses) Recognized in Earnings										Gains/(Losses) Recognized in Earnings
		Location of gain/(loss) recognized in earnings	Quarter Ended				Two Quarters Ended					Location of gain/(loss) recognized in earnings	Quarter Ended				Two Quarters Ended
			Mar 28, 2021		Mar 29, 2020		Mar 28, 2021		Mar 29, 2020				Apr 3, 2022		Mar 28, 2021		Apr 3, 2022		Mar 28, 2021
Non-Designated Derivatives:	Non-Designated Derivatives:										Non-Designated Derivatives:
Dairy											Dairy	Interest income and other, net	$	0.1	$	—	$	0.1	$	—
Foreign currency - other											Foreign currency - other	Interest income and other, net	11.6		(0.8)		21.8		(1.7)
Coffee											Coffee	Interest income and other, net	6.2		—		9.3		—
Diesel fuel and other commodities	Diesel fuel and other commodities	Interest income and other, net	$	0.8	$	(8.9)	$	2.0	$	(8.0)	Diesel fuel and other commodities	Interest income and other, net	0.7		0.8		0.7		2.0
Foreign currency - other		Interest income and other, net	(0.8)		4.9		(1.7)		8.3
Fair Value Hedges:	Fair Value Hedges:										Fair Value Hedges:
Interest rate swap	Interest rate swap	Interest expense	(1.5)		35.2		(1.1)		24.3		Interest rate swap	Interest expense	(21.3)		(1.5)		(26.1)		(1.1)
Long-term debt (hedged item)	Long-term debt (hedged item)	Interest expense	4.8		(27.5)		7.7		(23.3)		Long-term debt (hedged item)	Interest expense	24.8		4.8		33.0		7.7

Notional amounts of outstanding derivative contracts (in millions):


		Mar 28, 2021		Sep 27, 2020			Apr 3, 2022		Oct 3, 2021
Coffee	Coffee	$	210	$	63	Coffee	$	917	$	481
Cross-currency swaps	Cross-currency swaps	838		870		Cross-currency swaps	773		806
Dairy	Dairy	18		61		Dairy	55		53
Diesel fuel and other commodities	Diesel fuel and other commodities	12		5		Diesel fuel and other commodities	24		10
Foreign currency - other	Foreign currency - other	1,183		1,140		Foreign currency - other	1,105		1,009
Interest rate swap		1,750		1,750
Interest rate swaps						Interest rate swaps	1,600		1,250

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Fair value of outstanding derivative contracts (in millions) including the location of the asset and/or liability on the consolidated balance sheets:


		Derivative Assets
	Balance Sheet Location	Apr 3, 2022		Oct 3, 2021
Designated Derivative Instruments:
Coffee	Prepaid expenses and other current assets	$	35.4	$	130.5

Cross-currency swaps	Other long-term assets	68.8		54.7
Dairy	Prepaid expenses and other current assets	5.2		0.8

Foreign currency - other	Prepaid expenses and other current assets	12.6		8.9
	Other long-term assets	9.1		6.9

Interest rate swaps	Other long-term assets	35.7		22.7
Non-designated Derivative Instruments:
Coffee	Prepaid expenses and other current assets	2.3		—
Dairy	Prepaid expenses and other current assets	0.9		—
Diesel fuel and other commodities	Prepaid expenses and other current assets	1.6		0.1
Foreign currency	Prepaid expenses and other current assets	6.7		7.3

		Derivative Liabilities
	Balance Sheet Location	Apr 3, 2022		Oct 3, 2021
Designated Derivative Instruments:
Coffee	Accrued liabilities	$	23.4	$	—

Cross-currency swaps	Other long-term liabilities	0.7		3.3
Dairy	Accrued liabilities	1.4		0.9
Foreign currency - other	Accrued liabilities	7.4		7.4
	Other long-term liabilities	5.0		3.6
Interest rates	Other long-term liabilities	11.1		1.3
Non-designated Derivative Instruments:
Dairy	Accrued liabilities	0.2		0.2
Diesel fuel and other commodities	Accrued liabilities	1.0		—
Foreign currency	Accrued liabilities	1.6		0.1

Derivative Assets
Balance Sheet Location Mar 28, 2021 Sep 27, 2020
Designated Derivative Instruments:
Coffee Prepaid expenses and other current assets $ 12.9 $ 2.6
Cross-currency swaps Other long-term assets 28.6 37.7
Dairy Prepaid expenses and other current assets 0.6 2.1
Foreign currency - other Prepaid expenses and other current assets 6.4 8.6
Other long-term assets 4.3 3.8
Interest rates Other long-term assets 24.7 0
Interest rate swap Other long-term assets 38.5 45.8
Non-designated Derivative Instruments:
Diesel fuel and other commodities Prepaid expenses and other current assets 1.4 0
Foreign currency Prepaid expenses and other current assets 0.7 2.3
Derivative Liabilities
Balance Sheet Location Mar 28, 2021 Sep 27, 2020
Designated Derivative Instruments:
Coffee Accrued liabilities $ 0 $ 1.4
Other long-term liabilities 0 0.1
Cross-currency swaps Other long-term liabilities 4.7 7.3
Dairy Accrued liabilities 0.4 1.4
Foreign currency - other Accrued liabilities 11.2 1.6
Other long-term liabilities 8.9 2.6
Interest rates Other long-term liabilities 0 69.3
Non-designated Derivative Instruments:
Diesel fuel and other commodities Accrued liabilities 0.1 1.7
Foreign currency Accrued liabilities 1.6 1.2

The following amounts were recorded on the consolidated balance sheets related to fixed-to-floating interest rate swaps designated in fair value hedging relationships:

Carrying amount of hedged item Cumulative amount of fair value hedging adjustment included in the carrying amount
Mar 28, 2021 Sep 27, 2020 Mar 28, 2021 Sep 27, 2020
Location on the balance sheet
Long-term debt $ 777.9 $ 785.6 $ 27.9 $ 35.6


	Carrying amount of hedged item				Cumulative amount of fair value hedging adjustment included in the carrying amount
	Apr 3, 2022		Oct 3, 2021		Apr 3, 2022		Oct 3, 2021
Location on the balance sheet
Long-term debt	$	1,088.6	$	771.7	$	(11.4)	$	21.7

Additional disclosures related to cash flow gains and losses included in AOCI, as well as subsequent reclassifications to earnings, are included in Note 10, Equity.

1516

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Note 3: Fair Value Measurements

Assets and liabilities measured at fair value on a recurring basis (in millions):

Fair Value Measurements at Reporting Date Using
Balance at
March 28, 2021 Quoted Prices in Active Markets for Identical Assets
(Level 1) Significant Other Observable Inputs
(Level 2) Significant Unobservable Inputs
(Level 3)
Assets:
Cash and cash equivalents $ 3,880.7 $ 3,880.7 $ 0 $ 0
Short-term investments:
Available-for-sale debt securities
Commercial paper 38.5 0 38.5 0
Corporate debt securities 14.0 0 14.0 0
State and local government obligations 1.0 0 1.0 0
Total available-for-sale debt securities 53.5 0 53.5 0
Marketable equity securities 69.5 69.5 0 0
Total short-term investments 123.0 69.5 53.5 0
Prepaid expenses and other current assets:
Derivative assets 22.0 13.2 8.8 0
Long-term investments:
Available-for-sale debt securities
Auction rate securities 5.7 0 0 5.7
Corporate debt securities 167.4 0 167.4 0
Foreign government obligations 4.0 0 4.0 0
Mortgage and other asset-backed securities 18.0 0 18.0 0
State and local government obligations 4.1 0 4.1 0
U.S. government treasury securities 85.6 85.6 0 0
Total long-term investments 284.8 85.6 193.5 5.7
Other long-term assets:
Derivative assets 96.1 0 96.1 0
Total assets $ 4,406.6 $ 4,049.0 $ 351.9 $ 5.7
Liabilities:
Accrued liabilities:
Derivative liabilities $ 13.3 $ 0.2 $ 13.1 $ 0
Other long-term liabilities:
Derivative liabilities 13.6 0 13.6 0
Total liabilities $ 26.9 $ 0.2 $ 26.7 $ 0


			Fair Value Measurements at Reporting Date Using
	Balance at April 3, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash and cash equivalents	$	3,913.4	$	3,913.4	$	—	$	—
Short-term investments:
Available-for-sale debt securities



Corporate debt securities	8.2		—		8.2		—




Total available-for-sale debt securities	8.2		—		8.2		—
Marketable equity securities	73.9		73.9		—		—
Total short-term investments	82.1		73.9		8.2		—
Prepaid expenses and other current assets:
Derivative assets	64.7		39.6		25.1		—
Long-term investments:
Available-for-sale debt securities



Corporate debt securities	139.6		—		139.6		—
Foreign government obligations	3.8		—		3.8		—
Mortgage and other asset-backed securities	58.9		—		58.9		—
State and local government obligations	1.4		—		1.4		—
U.S. government treasury securities	81.9		81.9		—		—
Total long-term investments	285.6		81.9		203.7		—
Other long-term assets:
Derivative assets	113.6		—		113.6		—
Total assets	$	4,459.4	$	4,108.8	$	350.6	$	—
Liabilities:
Accrued liabilities:
Derivative liabilities	$	35.0	$	23.8	$	11.2	$	—
Other long-term liabilities:
Derivative liabilities	16.8		—		16.8		—
Total liabilities	$	51.8	$	23.8	$	28.0	$	—

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				Fair Value Measurements at Reporting Date Using									Fair Value Measurements at Reporting Date Using
		Balance at September 27, 2020		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			Balance at October 3, 2021		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:	Assets:									Assets:
Cash and cash equivalents	Cash and cash equivalents	$	4,350.9	$	4,350.9	$	0	$	0	Cash and cash equivalents	$	6,455.7	$	6,455.7	$	—	$	—
Short-term investments:	Short-term investments:									Short-term investments:
Available-for-sale debt securities	Available-for-sale debt securities									Available-for-sale debt securities
Certificates of deposit		1.6		0		1.6		0

Commercial paper	Commercial paper	66.8		0		66.8		0		Commercial paper	63.0		—		63.0		—
Corporate debt securities	Corporate debt securities	123.6		0		123.6		0		Corporate debt securities	24.7		—		24.7		—
Foreign government obligations		8.5		0		8.5		0

Mortgage and other asset-backed securities	Mortgage and other asset-backed securities	15.8		0		15.8		0		Mortgage and other asset-backed securities	0.1		—		0.1		—
Total available-for-sale debt securities	Total available-for-sale debt securities	216.3		0		216.3		0		Total available-for-sale debt securities	87.8		—		87.8		—
Marketable equity securities	Marketable equity securities	64.9		64.9		0		0		Marketable equity securities	74.4		74.4		—		—
Total short-term investments	Total short-term investments	281.2		64.9		216.3		0		Total short-term investments	162.2		74.4		87.8		—
Prepaid expenses and other current assets:	Prepaid expenses and other current assets:									Prepaid expenses and other current assets:
Derivative assets	Derivative assets	15.6		3.6		12.0		0		Derivative assets	147.6		131.1		16.5		—
Long-term investments:	Long-term investments:									Long-term investments:
Available-for-sale debt securities	Available-for-sale debt securities									Available-for-sale debt securities

Auction rate securities	Auction rate securities	5.7		0		0		5.7		Auction rate securities	6.0		—		—		6.0

Corporate debt securities	Corporate debt securities	82.6		0		82.6		0		Corporate debt securities	162.0		—		162.0		—

Foreign government obligations										Foreign government obligations	4.0		—		4.0		—
Mortgage and other asset-backed securities	Mortgage and other asset-backed securities	19.3		0		19.3		0		Mortgage and other asset-backed securities	31.9		—		31.9		—
State and local government obligations	State and local government obligations	3.6		0		3.6		0		State and local government obligations	1.5		—		1.5		—
U.S. government treasury securities	U.S. government treasury securities	94.9		94.9		0		0		U.S. government treasury securities	76.3		76.3		—		—
Total long-term investments	Total long-term investments	206.1		94.9		105.5		5.7		Total long-term investments	281.7		76.3		199.4		6.0
Other long-term assets:	Other long-term assets:									Other long-term assets:
Derivative assets	Derivative assets	87.3		0		87.3		0		Derivative assets	84.3		—		84.3		—
Total assets	Total assets	$	4,941.1	$	4,514.3	$	421.1	$	5.7	Total assets	$	7,131.5	$	6,737.5	$	388.0	$	6.0
Liabilities:	Liabilities:									Liabilities:
Accrued liabilities:	Accrued liabilities:									Accrued liabilities:
Derivative liabilities	Derivative liabilities	$	7.3	$	1.9	$	5.4	$	0	Derivative liabilities	$	8.6	$	0.3	$	8.3	$	—
Other long-term liabilities:	Other long-term liabilities:									Other long-term liabilities:
Derivative liabilities	Derivative liabilities	79.3		0.1		79.2		0		Derivative liabilities	8.2		—		8.2		—
Total liabilities	Total liabilities	$	86.6	$	2.0	$	84.6	$	0	Total liabilities	$	16.8	$	0.3	$	16.5	$	—

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 ~~March 28, 2021~~April 3, 2022 and ~~September 27, 2020.~~

~~Table of Contents~~

October 3, 2021.

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 and other assets. These assets are measured at fair value if determined to be impaired. ~~During our first two quarters~~

Table of ~~fiscal 2021, we recorded asset impairment charges, primarily related to restructuring efforts for our North America store portfolio. See~~ ~~Note 1~~Contents~~, Summary of Significant Accounting Policies, for further discussion.~~

The estimated fair value of our long-term debt based on the quoted market price (Level 2) is included at Note 7, Debt. There were no material fair value adjustments during the two quarters ended April 3, 2022 and March 28, ~~2021 and March 29, 2020.~~2021.

Note 4: Inventories (in millions):


		Mar 28, 2021		Sep 27, 2020			Apr 3, 2022		Oct 3, 2021
Coffee:	Coffee:					Coffee:
Unroasted	Unroasted	$	690.0	$	664.7	Unroasted	$	929.1	$	670.3
Roasted	Roasted	221.7		223.5		Roasted	294.3		233.5
Other merchandise held for sale	Other merchandise held for sale	266.6		293.9		Other merchandise held for sale	322.0		329.3
Packaging and other supplies	Packaging and other supplies	325.3		369.3		Packaging and other supplies	374.6		370.8
Total	Total	$	1,503.6	$	1,551.4	Total	$	1,920.0	$	1,603.9

Other merchandise held for sale includes, among other items, serveware, food and tea. Inventory levels vary due to seasonality, commodity market supply and price fluctuations.

As of ~~March 28, 2021,~~April 3, 2022, we had committed to purchasing green coffee totaling ~~$637~~$500 million under fixed-price contracts and an estimated ~~$654 million~~$1.3 billion under price-to-be-fixed ~~contracts. We expect to take physical delivery for these~~ contracts. A portion of our price-to-be-fixed contracts are effectively fixed through the use of futures. See Note 2, 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.

During the second quarter of fiscal 2020, we wrote off approximately $50 million of inventory that was expiring or expected to expire due to COVID-19 related store closures, primarily perishable food and beverage ingredients located at our stores, distribution centers and suppliers. We did not record significant write-offs related to COVID-19 during the first half of fiscal 2021.

Note 5: Supplemental Balance Sheet and Statement of Earnings Information (in millions):

Prepaid Expenses and Other Current Assets

Mar 28, 2021 Sep 27, 2020
Income tax receivable $ 180.6 $ 356.9
Government subsidies receivable 158.6 155.1
Other prepaid expenses and current assets 252.8 227.5
Total prepaid expenses and current assets $ 592.0 $ 739.5


	Apr 3, 2022		Oct 3, 2021
Income tax receivable	$	183.3	$	20.7
Government subsidies receivable	97.1		172.4
Other prepaid expenses and current assets	343.3		401.5
Total prepaid expenses and current assets	$	623.7	$	594.6

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Property, Plant and Equipment, net


	Apr 3, 2022		Oct 3, 2021
Land	$	46.2	$	46.2
Buildings	587.2		587.6
Leasehold improvements	8,846.5		8,637.6
Store equipment	2,963.9		2,934.1
Roasting equipment	863.6		857.2
Furniture, fixtures and other	1,465.9		1,392.0
Work in progress	539.5		374.1
Property, plant and equipment, gross	15,312.8		14,828.8
Accumulated depreciation	(8,852.0)		(8,459.3)
Property, plant and equipment, net	$	6,460.8	$	6,369.5

Mar 28, 2021 Sep 27, 2020
Land $ 46.2 $ 46.0
Buildings 592.3 586.8
Leasehold improvements 8,246.4 8,262.6
Store equipment 2,817.1 2,800.3
Roasting equipment 807.0 796.6
Furniture, fixtures and other 1,288.6 1,285.7
Work in progress 389.9 377.3
Property, plant and equipment, gross 14,187.5 14,155.3
Accumulated depreciation (8,064.4) (7,913.9)
Property, plant and equipment, net $ 6,123.1 $ 6,241.4

Accrued Liabilities

Mar 28, 2021 Sep 27, 2020
Accrued occupancy costs $ 76.1 $ 76.9
Accrued dividends payable 530.1 0
Accrued capital and other operating expenditures 757.7 677.2
Self-insurance reserves 236.4 243.9
Accrued business taxes 171.3 162.7
Total accrued liabilities $ 1,771.6 $ 1,160.7


	Apr 3, 2022		Oct 3, 2021
Accrued occupancy costs	$	84.7	$	107.1
Accrued dividends payable	561.9		578.1
Accrued capital and other operating expenditures	902.1		840.7
Self-insurance reserves	251.7		229.3
Income taxes payable	113.8		348.0
Accrued business taxes	178.2		218.0
Total accrued liabilities	$	2,092.4	$	2,321.2

Store Operating Expenses


		Quarter Ended				Two Quarters Ended					Quarter Ended				Two Quarters Ended
		Mar 28, 2021		Mar 29, 2020		Mar 28, 2021		Mar 29, 2020			Apr 3, 2022		Mar 28, 2021		Apr 3, 2022		Mar 28, 2021
Wages and benefits	Wages and benefits	$	1,664.9	$	1,608.0	$	3,271.1	$	3,206.0	Wages and benefits	$	2,018.3	$	1,664.9	$	4,029.0	$	3,271.1
Occupancy costs	Occupancy costs	626.2		593.9		1,254.3		1,212.6		Occupancy costs	664.9		626.2		1,330.2		1,254.3
Other expenses	Other expenses	532.2		519.5		1,165.3		1,124.3		Other expenses	631.5		532.2		1,355.4		1,165.3
Total store operating expenses	Total store operating expenses	$	2,823.3	$	2,721.4	$	5,690.7	$	5,542.9	Total store operating expenses	$	3,314.7	$	2,823.3	$	6,714.6	$	5,690.7

Note 6: Other Intangible Assets and Goodwill

Indefinite-Lived Intangible Assets

(in millions) Mar 28, 2021 Sep 27, 2020
Trade names, trademarks and patents $ 95.7 $ 95.0


(in millions)	Apr 3, 2022		Oct 3, 2021
Trade names, trademarks and patents	$	97.1	$	96.4

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Finite-Lived Intangible Assets

Mar 28, 2021 Sep 27, 2020
(in millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount
Acquired and reacquired rights $ 1,137.8 $ (880.8) $ 257.0 $ 1,116.1 $ (765.0) $ 351.1
Acquired trade secrets and processes 27.6 (23.4) 4.2 27.6 (22.0) 5.6
Trade names, trademarks and patents 125.4 (42.1) 83.3 124.8 (32.1) 92.7
Licensing agreements 16.0 (15.7) 0.3 16.6 (15.0) 1.6
Other finite-lived intangible assets 23.7 (19.9) 3.8 22.8 (16.7) 6.1
Total finite-lived intangible assets $ 1,330.5 $ (981.9) $ 348.6 $ 1,307.9 $ (850.8) $ 457.1


	Apr 3, 2022						Oct 3, 2021
(in millions)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Acquired and reacquired rights	$	1,126.7	$	(1,040.5)	$	86.2	$	1,141.5	$	(971.9)	$	169.6
Acquired trade secrets and processes	27.6		(26.2)		1.4		27.6		(24.8)		2.8
Trade names, trademarks and patents	127.4		(61.7)		65.7		126.3		(51.9)		74.4
Licensing agreements	20.1		(15.8)		4.3		18.8		(13.5)		5.3
Other finite-lived intangible assets	24.3		(24.3)		—		24.0		(22.6)		1.4
Total finite-lived intangible assets	$	1,326.1	$	(1,168.5)	$	157.6	$	1,338.2	$	(1,084.7)	$	253.5

Amortization expense for finite-lived intangible assets was $49.2 million and $99.4 million for the quarter and two quarters ended April 3, 2022, respectively and $62.2 million and $123.4 million for the quarter and two quarters ended March 28, 2021, ~~respectively and $54.5 million and $108.6 million for the quarter and two quarters ended March 29, 2020,~~ respectively.

Estimated future amortization expense as of ~~March 28, 2021~~April 3, 2022 (in millions):


Fiscal Year	Fiscal Year	Total		Fiscal Year	Total
2021 (excluding the two quarters ended March 28, 2021)		$	103.6
2022		190.3
2022 (excluding the two quarters ended April 3, 2022)				2022 (excluding the two quarters ended April 3, 2022)	$	97.9
2023	2023	19.6		2023	20.9
2024	2024	19.0		2024	20.4
2025	2025	13.1		2025	14.4
2026				2026	1.5
Thereafter	Thereafter	3.0		Thereafter	2.5
Total estimated future amortization expense	Total estimated future amortization expense	$	348.6	Total estimated future amortization expense	$	157.6

Goodwill

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

Americas International Channel Development Corporate and Other Total
Goodwill balance at September 27, 2020 $ 496.5 $ 3,065.0 $ 34.7 $ 1.0 $ 3,597.2
Other(1)
1.6 60.1 0 0 61.7
Goodwill balance at March 28, 2021 $ 498.1 $ 3,125.1 $ 34.7 $ 1.0 $ 3,658.9


	North America		International		Channel Development		Corporate and Other		Total
Goodwill balance at October 3, 2021	$	493.2	$	3,148.3	$	34.7	$	1.1	$	3,677.3


Other(1)	0.4		(31.6)		—		—		(31.2)
Goodwill balance at April 3, 2022	$	493.6	$	3,116.7	$	34.7	$	1.1	$	3,646.1

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

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Note 7: Debt

Revolving Credit Facility

Our $3 billion unsecured five-year revolving credit facility (the "2021 credit facility"), of which $150 million may be used for issuances of letters of credit, is currently set to mature on September 16, 2026. The 2021 credit facility is available for working capital, capital expenditures and other 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 billion.

Borrowings under the 2021 credit facility will bear interest at a variable rate based on LIBOR, and, for U.S. dollar-denominated loans under certain circumstances, a Base Rate (as defined in the 2021 credit facility), in each case plus an applicable margin. The applicable margin is based on the Company’s long-term credit ratings assigned by the Moody’s and Standard & Poor’s rating agencies. The 2021 credit facility contains alternative interest rate provisions specifying rate calculations to be used at such time LIBOR ceases to be available as a benchmark due to reference rate reform. The “Base Rate” is the highest of (i) the Federal Funds Rate (as defined in the 2021 credit facility) plus 0.050%, (ii) Bank of America’s prime rate, and (iii) the Eurocurrency Rate (as defined in the 2021 credit facility) plus 1.000%.

The 2021 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 April 3, 2022, we were in compliance with all applicable covenants. No amounts were outstanding under our 2021 credit facility as of April 3, 2022 or October 3, 2021.

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 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 2021 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. As of ~~March 28,~~April 3, 2022 and October 3, 2021, we had 0no borrowings outstanding under the program.

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 billion, or ~~$45.8~~$41.1 million, credit facility is currently set to mature on December ~~30, 2021.~~31, 2022. Borrowings under ~~the~~such credit facility are subject to terms defined within the facility and will bear interest at a variable rate based on ~~TIBOR~~Tokyo Interbank Offered Rate ("TIBOR") plus an applicable margin of 0.400%.

~~Table of Contents~~

•A ¥10 billion, or ~~$91.6~~$82.2 million, credit facility is currently set to mature on March ~~26, 2022.~~27, 2023. Borrowings under ~~the~~such 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 0.350%.

As of ~~March 28,~~April 3, 2022 and October 3, 2021, we had ~~¥2 billion , or $18.3 million, of~~no borrowings outstanding under these Japanese yen-denominated credit facilities.

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Long-term Debt

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


		Mar 28, 2021				Sep 27, 2020				Stated Interest Rate		Effective Interest Rate(1)			Apr 3, 2022				Oct 3, 2021				Stated Interest Rate		Effective Interest Rate(1)
Issuance	Issuance	Amount		Estimated Fair Value		Amount		Estimated Fair Value						Issuance	Amount		Estimated Fair Value		Amount		Estimated Fair Value
November 2020 notes(2)		$	0	$	0	$	500.0	$	501.5	2.200	%	2.228	%
February 2021 notes(2)		0		0		500.0		502.3		2.100	%	2.293	%
February 2021 notes(2)		0		0		250.0		251.1		2.100	%	1.600	%

May 2022 notes	May 2022 notes	500.0		505.3		500.0		506.5		1.300	%	1.334	%	May 2022 notes	$	500.0	$	500.1	$	500.0	$	503.1	1.300	%	1.334	%
June 2022 notes	June 2022 notes	500.0		512.3		500.0		517.5		2.700	%	2.819	%	June 2022 notes	500.0		500.7		500.0		506.7		2.700	%	2.819	%
March 2023 notes	March 2023 notes	1,000.0		1,049.1		1,000.0		1,058.8		3.100	%	3.107	%	March 2023 notes	1,000.0		1,008.2		1,000.0		1,035.9		3.100	%	3.107	%
October 2023 notes~~(3)~~(2)	October 2023 notes~~(3)~~(2)	750.0		807.9		750.0		817.5		3.850	%	2.859	%	October 2023 notes~~(3)~~(2)	750.0		762.0		750.0		794.8		3.850	%	2.859	%
February 2024 notes(3)														February 2024 notes(3)	500.0		500.6		—		—		0.553	%	0.783	%
March 2024 notes(4)	March 2024 notes(4)	778.5		766.8		806.4		794.4		0.372	%	0.462	%	March 2024 notes(4)	698.4		671.4		763.8		761.0		0.372	%	0.462	%
August 2025 notes	August 2025 notes	1,250.0		1,382.3		1,250.0		1,414.5		3.800	%	3.721	%	August 2025 notes	1,250.0		1,275.7		1,250.0		1,371.5		3.800	%	3.721	%
June 2026 notes	June 2026 notes	500.0		525.0		500.0		542.6		2.450	%	2.511	%	June 2026 notes	500.0		485.7		500.0		526.4		2.450	%	2.511	%
March 2027 notes	March 2027 notes	500.0		509.3		500.0		528.9		2.000	%	2.058	%	March 2027 notes	500.0		472.1		500.0		513.0		2.000	%	2.058	%
March 2028 notes	March 2028 notes	600.0		650.6		600.0		679.5		3.500	%	3.529	%	March 2028 notes	600.0		600.3		600.0		663.2		3.500	%	3.529	%
November 2028 notes	November 2028 notes	750.0		841.5		750.0		886.0		4.000	%	3.958	%	November 2028 notes	750.0		772.4		750.0		855.9		4.000	%	3.958	%
August 2029 notes		1,000.0		1,088.7		1,000.0		1,147.1		3.550	%	3.840	%
August 2029 notes(2)														August 2029 notes(2)	1,000.0		1,004.4		1,000.0		1,109.9		3.550	%	3.840	%
March 2030 notes	March 2030 notes	750.0		736.5		750.0		778.0		2.250	%	3.084	%	March 2030 notes	750.0		684.8		750.0		758.6		2.250	%	3.084	%
November 2030 notes	November 2030 notes	1,250.0		1,252.5		1,250.0		1,325.9		2.550	%	2.582	%	November 2030 notes	1,250.0		1,158.7		1,250.0		1,286.9		2.550	%	2.582	%
February 2032 notes														February 2032 notes	1,000.0		952.7		—		—		3.000	%	3.155	%
June 2045 notes	June 2045 notes	350.0		385.8		350.0		412.4		4.300	%	4.348	%	June 2045 notes	350.0		358.7		350.0		414.1		4.300	%	4.348	%
December 2047 notes	December 2047 notes	500.0		515.0		500.0		546.6		3.750	%	3.765	%	December 2047 notes	500.0		480.0		500.0		556.5		3.750	%	3.765	%
November 2048 notes	November 2048 notes	1,000.0		1,150.2		1,000.0		1,222.8		4.500	%	4.504	%	November 2048 notes	1,000.0		1,079.1		1,000.0		1,248.6		4.500	%	4.504	%
August 2049 notes	August 2049 notes	1,000.0		1,137.4		1,000.0		1,215.5		4.450	%	4.447	%	August 2049 notes	1,000.0		1,070.5		1,000.0		1,241.0		4.450	%	4.447	%
March 2050 notes	March 2050 notes	500.0		482.9		500.0		517.1		3.350	%	3.362	%	March 2050 notes	500.0		456.2		500.0		527.5		3.350	%	3.362	%
November 2050 notes	November 2050 notes	1,250.0		1,247.7		1,250.0		1,332.2		3.500	%	3.528	%	November 2050 notes	1,250.0		1,162.8		1,250.0		1,339.5		3.500	%	3.528	%
Total	Total	14,728.5		15,546.8		16,006.4		17,498.7						Total	16,148.4		15,957.1		14,713.8		16,014.1
Aggregate debt issuance costs and unamortized premium/(discount), net	Aggregate debt issuance costs and unamortized premium/(discount), net	(126.1)				(132.5)								Aggregate debt issuance costs and unamortized premium/(discount), net	(124.0)				(119.7)
Hedge accounting fair value adjustment(3)		27.9				35.6
Hedge accounting fair value adjustment(2)														Hedge accounting fair value adjustment(2)	(11.4)				21.7
Total	Total	$	14,630.3			$	15,909.5							Total	$	16,013.0			$	14,615.8

(1)Includes the effects of the amortization of any premium or discount and any gain or loss upon settlement of related treasury locks or forward-starting interest rate swaps utilized to hedge interest rate risk prior to the debt issuance.

(2)~~November 2020 and February 2021 notes were repaid in the first and second quarters of fiscal 2021, respectively.~~

~~(3)~~Amount includes the change in fair value due to changes in benchmark interest rates related to hedging our October 2023 notes and $350 million of our August 2029 notes. Refer to Note 2, Derivative Financial Instruments, for additional information on our interest rate ~~swap~~swaps designated as a fair value ~~hedge.~~hedges.

(3)Floating rate notes which bear interest at a rate equal to Compounded SOFR (as defined in the February 2024 notes) plus 0.420%, resulting in a stated interest rate of 0.553% at April 3, 2022.

(4)Japanese yen-denominated long-term debt.

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The following table summarizes our long-term debt maturities as of ~~March 28, 2021~~April 3, 2022 by fiscal year (in millions):

Fiscal Year Total
2021 $ 0
2022 1,000.0
2023 1,000.0
2024 1,528.5
2025 1,250.0
Thereafter 9,950.0
Total $ 14,728.5


Fiscal Year	Total

2022	$	1,000.0
2023	1,000.0
2024	1,948.4
2025	1,250.0
2026	500.0
Thereafter	10,450.0
Total	$	16,148.4

Note 8: Leases

For the quarter and two quarters ended March 28, 2021, we recognized accelerated lease ROU asset amortization costs of $14.4 million and $44.0 million, which was recognized within restructuring and impairments on the consolidated statements of earnings.

The components of lease costs (in millions):


		Quarter Ended				Two Quarters Ended					Quarter Ended				Two Quarters Ended
		Mar 28, 2021		Mar 29, 2020		Mar 28, 2021		Mar 29, 2020			Apr 3, 2022		Mar 28, 2021		Apr 3, 2022		Mar 28, 2021
Operating lease costs(1)	Operating lease costs(1)	$	389.3	$	377.4	$	798.7	$	750.5	Operating lease costs(1)	$	393.4	$	389.3	$	779.5	$	798.7
Variable lease costs	Variable lease costs	224.3		197.2		446.7		426.0		Variable lease costs	235.8		224.3		465.6		446.7
Short-term lease costs	Short-term lease costs	7.6		8.3		16.3		16.6		Short-term lease costs	7.1		7.6		14.2		16.3
Total lease costs	Total lease costs	$	621.2	$	582.9	$	1,261.7	$	1,193.1	Total lease costs	$	636.3	$	621.2	$	1,259.3	$	1,261.7

(1)~~Operating lease costs were net of~~Includes immaterial amounts of sublease ~~income. For the quarter~~income and ~~two quarters ended March 28, 2021, operating lease costs were also net of immaterial amounts of~~ rent concessions.

The following table includes supplemental information (in millions):


		Two Quarters Ended							Two Quarters Ended
		Mar 28, 2021			Mar 29, 2020				Apr 3, 2022			Mar 28, 2021
Cash paid related to operating lease liabilities	Cash paid related to operating lease liabilities	$	792.4		$	726.0		Cash paid related to operating lease liabilities	$	845.5		$	792.4
Operating lease liabilities arising from obtaining ROU assets	Operating lease liabilities arising from obtaining ROU assets	659.6			506.6			Operating lease liabilities arising from obtaining ROU assets	710.6			659.6

		Mar 28, 2021			Mar 29, 2020				Apr 3, 2022			Mar 28, 2021
Weighted-average remaining operating lease term	Weighted-average remaining operating lease term	8.7 years			8.9 years			Weighted-average remaining operating lease term	8.5 years			8.7 years
Weighted-average operating lease discount rate	Weighted-average operating lease discount rate	2.4		%	2.5		%	Weighted-average operating lease discount rate	2.5		%	2.4		%

Finance lease assets are recorded in property, plant and equipment, net with the corresponding lease liabilities included in accrued liabilities and other long-term liabilities on the consolidated balance sheet. There were no material finance leases as of ~~March 28,~~April 3, 2022 and October 3, 2021.

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


Fiscal Year	Total
2022 (excluding the two quarters ended April 3, 2022)	$	754.3
2023	1,481.1
2024	1,381.8
2025	1,236.9
2026	1,077.3
Thereafter	4,059.4
Total lease payments	9,990.8
Less imputed interest	(1,086.0)
Total	$	8,904.8

Fiscal Year Total
2021 (excluding the two quarters ended March 28, 2021) $ 780.6
2022 1,486.5
2023 1,343.6
2024 1,202.9
2025 1,056.6
Thereafter 4,137.9
Total lease payments 10,008.1
Less imputed interest (1,134.0)
Total $ 8,874.1

As of ~~March 28, 2021,~~April 3, 2022, we have entered into operating leases that have not yet commenced of ~~$761.9 million,~~$1.0 billion, primarily related to real estate leases. These leases will commence between fiscal year ~~2021~~2022 and fiscal year ~~2027~~2028 with lease terms ranging from ~~3 years~~ten to 20twenty years.

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Note 9: Deferred Revenue

Our deferred revenue primarily consists of the prepaid royalty from Nestlé, for which we have continuing performance obligations to support the Global Coffee Alliance, our unredeemed stored value card liability and unredeemed loyalty points (“Stars”) associated with our loyalty program.

As of ~~March 28, 2021,~~April 3, 2022, the current and long-term deferred revenue related to Nestlé was ~~$178.9~~$177.0 million and $6.3 billion, respectively. As of October 3, 2021, the current and long-term deferred revenue related to the Nestlé up-front payment was $177.0 million and $6.4 billion, respectively. During both quarters and two quarters ended April 3, 2022 and March 28, 2021, ~~and March 29, 2020,~~ we recognized $44.2 million and $88.4 million of prepaid royalty revenue related to Nestlé, respectively.

Changes in our deferred revenue balance related to our stored value cards and loyalty program (in millions):


Quarter Ended April 3, 2022	Total
Stored value cards and loyalty program at January 2, 2022	$	1,952.5
Revenue deferred - card activations, card reloads and Stars earned	3,124.0
Revenue recognized - card and Stars redemptions and breakage	(3,426.3)
Other(1)	(5.0)
Stored value cards and loyalty program at April 3, 2022(2)	$	1,645.2

Quarter Ended March 28, 2021	Total
Stored value cards and loyalty program at December 27, 2020	$	1,750.0
Revenue deferred - card activations, card reloads and Stars earned	2,709.7
Revenue recognized - card and Stars redemptions and breakage	(2,977.8)
Other(1)	(6.7)
Stored value cards and loyalty program at March 28, 2021(2)	$	1,475.2

~~Quarter~~Two Quarters Ended ~~March 29, 2020~~April 3, 2022	Total
Stored value cards and loyalty program at ~~December 29, 2019~~October 3, 2021	$	~~1,561.0~~1,448.5
Revenue deferred - card activations, card reloads and Stars earned	~~2,453.6~~7,041.5
Revenue recognized - card and Stars redemptions and breakage	~~(2,736.4)~~(6,837.1)
Other(1)	~~(5.1)~~(7.7)
Stored value cards and loyalty program at ~~March 29, 2020~~April 3, 2022(2)	$	~~1,273.1~~1,645.2

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Two Quarters Ended March 28, 2021	Total
Stored value cards and loyalty program at September 27, 2020	$	1,280.5
Revenue deferred - card activations, card reloads and Stars earned	6,147.1
Revenue recognized - card and Stars redemptions and breakage	(5,958.0)
Other(1)	5.6
Stored value cards and loyalty program at March 28, 2021(2)	$	1,475.2

~~Two Quarters Ended March 29, 2020~~	~~Total~~
~~Stored value cards and loyalty program at September 29, 2019~~	$	~~1,113.7~~
~~Revenue deferred - card activations, card reloads and Stars earned~~	~~5,961.1~~
~~Revenue recognized - card and Stars redemptions and breakage~~	~~(5,798.3)~~
~~Other(1)~~	~~(3.4)~~
~~Stored value cards and loyalty program at March 29, 2020(2)~~	$	~~1,273.1~~

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

(2)As of April 3, 2022 and March 28, 2021, approximately $1.5 billion and ~~March 29, 2020, approximately $1,370.4 million and $1,191.5 million~~$1.4 billion of these amounts were current, respectively.

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Note 10: Equity

Changes in AOCI by component, net of tax (in millions):


Quarter Ended	Quarter Ended	Available-for-Sale Debt Securities		Cash Flow Hedges		Net Investment Hedges		Translation Adjustment and Other		Total		Quarter Ended	Available-for-Sale Debt Securities		Cash Flow Hedges		Net Investment Hedges		Translation Adjustment and Other		Total
March 28, 2021
April 3, 2022												April 3, 2022
Net gains/(losses) in AOCI, beginning of period	Net gains/(losses) in AOCI, beginning of period	$	4.1	$	(75.5)	$	(13.5)	$	(61.0)	$	(145.9)	Net gains/(losses) in AOCI, beginning of period	$	(1.2)	$	224.6	$	77.1	$	(47.0)	$	253.5
Net gains/(losses) recognized in OCI before reclassifications	Net gains/(losses) recognized in OCI before reclassifications	(2.0)		73.3		35.6		(81.2)		25.7		Net gains/(losses) recognized in OCI before reclassifications	(7.9)		52.9		28.5		(38.5)		35.0
Net (gains)/losses reclassified from AOCI to earnings	Net (gains)/losses reclassified from AOCI to earnings	(0.1)		(3.5)		(2.5)		0		(6.1)		Net (gains)/losses reclassified from AOCI to earnings	0.1		(25.8)		(2.6)		0.1		(28.2)
Other comprehensive income/(loss) attributable to Starbucks	Other comprehensive income/(loss) attributable to Starbucks	(2.1)		69.8		33.1		(81.2)		19.6		Other comprehensive income/(loss) attributable to Starbucks	(7.8)		27.1		25.9		(38.4)		6.8

Net gains/(losses) in AOCI, end of period	Net gains/(losses) in AOCI, end of period	$	2.0	$	(5.7)	$	19.6	$	(142.2)	$	(126.3)	Net gains/(losses) in AOCI, end of period	$	(9.0)	$	251.7	$	103.0	$	(85.4)	$	260.3

March 29, 2020
March 28, 2021												March 28, 2021
Net gains/(losses) in AOCI, beginning of period	Net gains/(losses) in AOCI, beginning of period	$	3.2	$	33.7	$	7.7	$	(432.0)	$	(387.4)	Net gains/(losses) in AOCI, beginning of period	$	4.1	$	(75.5)	$	(13.5)	$	(61.0)	$	(145.9)
Net gains/(losses) recognized in OCI before reclassifications	Net gains/(losses) recognized in OCI before reclassifications	2.5		(96.7)		43.0		(78.4)		(129.6)		Net gains/(losses) recognized in OCI before reclassifications	(2.0)		73.3		35.6		(81.2)		25.7
Net (gains)/losses reclassified from AOCI to earnings	Net (gains)/losses reclassified from AOCI to earnings	(0.1)		(1.8)		(2.9)		0		(4.8)		Net (gains)/losses reclassified from AOCI to earnings	(0.1)		(3.5)		(2.5)		0		(6.1)
Other comprehensive income/(loss) attributable to Starbucks	Other comprehensive income/(loss) attributable to Starbucks	2.4		(98.5)		40.1		(78.4)		(134.4)		Other comprehensive income/(loss) attributable to Starbucks	(2.1)		69.8		33.1		(81.2)		19.6

Net gains/(losses) in AOCI, end of period	Net gains/(losses) in AOCI, end of period	$	5.6	$	(64.8)	$	47.8	$	(510.4)	$	(521.8)	Net gains/(losses) in AOCI, end of period	$	2.0	$	(5.7)	$	19.6	$	(142.2)	$	(126.3)

Two Quarters Ended	Two Quarters Ended	Available-for-Sale Debt Securities		Cash Flow Hedges		Net Investment Hedges		Translation Adjustment and Other		Total		Two Quarters Ended	Available-for-Sale Debt Securities		Cash Flow Hedges		Net Investment Hedges		Translation Adjustment and Other		Total
April 3, 2022												April 3, 2022
Net gains/(losses) in AOCI, beginning of period												Net gains/(losses) in AOCI, beginning of period	$	1.5	$	158.3	$	48.6	$	(61.2)	$	147.2
Net gains/(losses) recognized in OCI before reclassifications												Net gains/(losses) recognized in OCI before reclassifications	(10.5)		129.8		59.5		(24.3)		154.5
Net (gains)/losses reclassified from AOCI to earnings												Net (gains)/losses reclassified from AOCI to earnings	—		(36.4)		(5.1)		0.1		(41.4)
Other comprehensive income/(loss) attributable to Starbucks												Other comprehensive income/(loss) attributable to Starbucks	(10.5)		93.4		54.4		(24.2)		113.1

Net gains/(losses) in AOCI, end of period												Net gains/(losses) in AOCI, end of period	$	(9.0)	$	251.7	$	103.0	$	(85.4)	$	260.3

March 28, 2021	March 28, 2021											March 28, 2021
Net gains/(losses) in AOCI, beginning of period	Net gains/(losses) in AOCI, beginning of period	$	5.7	$	(82.1)	$	11.5	$	(299.7)	$	(364.6)	Net gains/(losses) in AOCI, beginning of period	$	5.7	$	(82.1)	$	11.5	$	(299.7)	$	(364.6)
Net gains/(losses) recognized in OCI before reclassifications	Net gains/(losses) recognized in OCI before reclassifications	(2.4)		78.1		13.0		157.5		246.2		Net gains/(losses) recognized in OCI before reclassifications	(2.4)		78.1		13.0		157.5		246.2
Net (gains)/losses reclassified from AOCI to earnings	Net (gains)/losses reclassified from AOCI to earnings	(1.3)		(1.7)		(4.9)		0		(7.9)		Net (gains)/losses reclassified from AOCI to earnings	(1.3)		(1.7)		(4.9)		—		(7.9)
Other comprehensive income/(loss) attributable to Starbucks	Other comprehensive income/(loss) attributable to Starbucks	(3.7)		76.4		8.1		157.5		238.3		Other comprehensive income/(loss) attributable to Starbucks	(3.7)		76.4		8.1		157.5		238.3

Net gains/(losses) in AOCI, end of period	Net gains/(losses) in AOCI, end of period	$	2.0	$	(5.7)	$	19.6	$	(142.2)	$	(126.3)	Net gains/(losses) in AOCI, end of period	$	2.0	$	(5.7)	$	19.6	$	(142.2)	$	(126.3)

March 29, 2020
Net gains/(losses) in AOCI, beginning of period		$	3.9	$	11.0	$	(10.1)	$	(508.1)	$	(503.3)
Net gains/(losses) recognized in OCI before reclassifications		2.4		(70.9)		60.7		(2.3)		(10.1)
Net (gains)/losses reclassified from AOCI to earnings		0		(7.9)		(5.3)		0		(13.2)
Other comprehensive income/(loss) attributable to Starbucks		2.4		(78.8)		55.4		(2.3)		(23.3)

Cumulative effect of accounting adoption		(0.7)		3.0		2.5		0		4.8
Net gains/(losses) in AOCI, end of period		$	5.6	$	(64.8)	$	47.8	$	(510.4)	$	(521.8)

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


Quarter Ended	Quarter Ended						Quarter Ended
AOCI Components	AOCI Components	Amounts Reclassified from AOCI				Affected Line Item in the Statements of Earnings	AOCI Components	Amounts Reclassified from AOCI				Affected Line Item in the Statements of Earnings
		Mar 28, 2021		Mar 29, 2020				Apr 3, 2022		Mar 28, 2021
Gains/(losses) on available-for-sale debt securities	Gains/(losses) on available-for-sale debt securities	$	0.2	$	0.2	Interest income and other, net	Gains/(losses) on available-for-sale debt securities	$	(0.2)	$	0.2	Interest income and other, net
Gains/(losses) on cash flow hedges	Gains/(losses) on cash flow hedges	4.3		2.3		Please refer to Note 2, Derivative Financial Instruments for additional information.	Gains/(losses) on cash flow hedges	30.9		4.3		Please refer to Note 2, Derivative Financial Instruments for additional information.
Gains/(losses) on net investment hedges	Gains/(losses) on net investment hedges	3.4		3.9		Interest expense	Gains/(losses) on net investment hedges	3.5		3.4		Interest expense

		7.9		6.4		Total before tax		34.2		7.9		Total before tax
		(1.8)		(1.6)		Tax (expense)/benefit		(6.0)		(1.8)		Tax (expense)/benefit
		$	6.1	$	4.8	Net of tax		$	28.2	$	6.1	Net of tax

Two Quarters Ended	Two Quarters Ended						Two Quarters Ended
AOCI Components	AOCI Components	Amounts Reclassified from AOCI				Affected Line Item in the Statements of Earnings	AOCI Components	Amounts Reclassified from AOCI				Affected Line Item in the Statements of Earnings
		Mar 28, 2021		Mar 29, 2020				Apr 3, 2022		Mar 28, 2021
Gains/(losses) on available-for-sale debt securities	Gains/(losses) on available-for-sale debt securities	$	1.7	$	0	Interest income and other, net	Gains/(losses) on available-for-sale debt securities	$	—	$	1.7	Interest income and other, net
Gains/(losses) on cash flow hedges	Gains/(losses) on cash flow hedges	3.2		9.9		Please refer to Note 2, Derivative Financial Instruments for additional information.	Gains/(losses) on cash flow hedges	43.4		3.2		Please refer to Note 2, Derivative Financial Instruments for additional information.
Gains/(losses) on net investment hedges	Gains/(losses) on net investment hedges	6.6		7.2		Interest expense	Gains/(losses) on net investment hedges	6.9		6.6		Interest expense

		11.5		17.1		Total before tax		50.3		11.5		Total before tax
		(3.6)		(3.9)		Tax (expense)/benefit		(8.9)		(3.6)		Tax (expense)/benefit
		$	7.9	$	13.2	Net of tax		$	41.4	$	7.9	Net of tax

In addition to 2.4 billion shares of authorized common stock with $0.001 par value per share, the Company has authorized 7.5 million shares of preferred stock, ~~NaN~~none of which was outstanding as of April 3, 2022.

During the two quarters ended April 3, 2022, we repurchased 36.3 million shares of common stock for $4.0 billion. On March ~~28, 2021.~~

15, 2022, we announced that our Board of Directors authorized the repurchase of up to an additional 40 million shares under our ongoing share repurchase program. On April 4, 2022, we announced a temporary suspension of our share repurchase program to allow us to augment investments in our stores and partners. Repurchases pursuant to this program were last made on April 1, 2022. As of ~~March 28, 2021, 48.9~~April 3, 2022, 52.6 million shares remained available for repurchase under current authorizations. ~~We have suspended our share repurchase program until we restore certain financial leverage targets, which we currently expect to occur in late fiscal 2021.~~

During the second quarter of fiscal ~~2021,~~2022, our Board of Directors approved a quarterly cash dividend to shareholders of ~~$0.45~~$0.49 per share to be paid on May ~~28, 2021~~27, 2022 to shareholders of record as of the close of business on May 13, ~~2021.~~2022.

Note 11: Employee Stock Plans

As of ~~March 28, 2021,~~April 3, 2022, there were ~~40.1~~34.5 million shares of common stock available for issuance pursuant to future equity-based compensation awards and ~~11.7~~11.1 million shares available for issuance under our employee stock purchase plan.

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


		Quarter Ended				Two Quarters Ended					Quarter Ended				Two Quarters Ended
		Mar 28, 2021		Mar 29, 2020		Mar 28, 2021		Mar 29, 2020			Apr 3, 2022		Mar 28, 2021		Apr 3, 2022		Mar 28, 2021
Restricted Stock Units (“RSUs”)										Restricted Stock Units (“RSUs”)	$	54.1	$	75.1	$	149.8	$	173.5
Options	Options	$	0.9	$	0.7	$	1.8	$	2.4	Options	(0.6)		0.9		(0.5)		1.8
Restricted Stock Units (“RSUs”)		75.1		55.6		173.5		144.2
Total stock-based compensation expense	Total stock-based compensation expense	$	76.0	$	56.3	$	175.3	$	146.6	Total stock-based compensation expense	$	53.5	$	76.0	$	149.3	$	175.3

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Stock option and RSU transactions from ~~September 27, 2020~~October 3, 2021 through ~~March 28, 2021~~April 3, 2022 (in millions):

Stock Options RSUs
Options outstanding/Nonvested RSUs, September 27, 2020 9.2 8.3
Granted 0 3.9
Options exercised/RSUs vested (2.2) (3.0)
Forfeited/expired (0.1) (0.8)
Options outstanding/Nonvested RSUs, March 28, 2021 6.9 8.4
Total unrecognized stock-based compensation expense, net of estimated forfeitures, as of March 28, 2021 $ 0.3 $ 253.8


	Stock Options		RSUs
Options outstanding/Nonvested RSUs, October 3, 2021	5.2		7.7
Granted	—		3.7
Options exercised/RSUs vested	(0.7)		(3.5)
Forfeited/expired	—		(0.6)
Options outstanding/Nonvested RSUs, April 3, 2022	4.5		7.3
Total unrecognized stock-based compensation expense, net of estimated forfeitures, as of April 3, 2022	$	—	$	245.8

~~Note 12: Income Taxes~~

The effective tax rate for the quarter ended March 28, 2021 was 25.9% compared to 16.8% for the same quarter in fiscal 2020. The increase was primarily due to higher earnings, including the foreign rate differential on our jurisdictional mix of earnings, partially offset by lapping valuation allowances recorded against deferred tax assets of certain international jurisdictions in the prior year.

The effective tax rate for the first two quarters ended March 28, 2021 was 24.5% compared to 21.1% for the same period in fiscal 2020. The increase was primarily due to higher earnings, including the foreign rate differential on our jurisdictional mix of earnings, partially offset by lapping valuation allowances recorded against deferred tax assets of certain international jurisdictions in the prior year.

Note ~~13:~~12: Earnings per Share

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


		Quarter Ended				Two Quarters Ended					Quarter Ended				Two Quarters Ended
		Mar 28, 2021		Mar 29, 2020		Mar 28, 2021		Mar 29, 2020			Apr 3, 2022		Mar 28, 2021		Apr 3, 2022		Mar 28, 2021
Net earnings attributable to Starbucks	Net earnings attributable to Starbucks	$	659.4	$	328.4	$	1,281.6	$	1,214.1	Net earnings attributable to Starbucks	$	674.5	$	659.4	$	1,490.4	$	1,281.6
Weighted average common shares outstanding (for basic calculation)	Weighted average common shares outstanding (for basic calculation)	1,177.5		1,171.8		1,176.3		1,176.1		Weighted average common shares outstanding (for basic calculation)	1,149.2		1,177.5		1,159.4		1,176.3
Dilutive effect of outstanding common stock options and RSUs	Dilutive effect of outstanding common stock options and RSUs	7.3		8.9		7.6		9.7		Dilutive effect of outstanding common stock options and RSUs	4.7		7.3		5.8		7.6
Weighted average common and common equivalent shares outstanding (for diluted calculation)	Weighted average common and common equivalent shares outstanding (for diluted calculation)	1,184.8		1,180.7		1,183.9		1,185.8		Weighted average common and common equivalent shares outstanding (for diluted calculation)	1,153.9		1,184.8		1,165.2		1,183.9
EPS — basic	EPS — basic	$	0.56	$	0.28	$	1.09	$	1.03	EPS — basic	$	0.59	$	0.56	$	1.29	$	1.09
EPS — diluted	EPS — diluted	$	0.56	$	0.28	$	1.08	$	1.02	EPS — diluted	$	0.58	$	0.56	$	1.28	$	1.08

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 would exclude out-of-the-money stock options (i.e., such options’ exercise prices were greater than the average market price of our common shares for the period) because their inclusion would be ~~antidilutive.~~anti-dilutive. As of April 3, 2022 and March 28, 2021, ~~and March 29, 2020,~~ we had ~~0 out-of-the-money~~an immaterial amount of anti-dilutive stock ~~options.~~options and unvested RSUs.

Note ~~14:~~13: Commitments and Contingencies

Legal Proceedings

On April 13, 2010, an organization named Council for Education and Research on Toxics (“Plaintiff”) filed a lawsuit in the Superior Court of the State of California, County of Los Angeles, against the Company and certain other defendants who manufacture, package, distribute or sell brewed coffee. The lawsuit is Council for Education and Research on Toxics v. Starbucks Corporation, et al. On May 9, 2011, the Plaintiff filed an additional lawsuit in the Superior Court of the State of California, County of Los Angeles, against the Company and additional defendants who manufacture, package, distribute or sell packaged coffee. The lawsuit is Council for Education and Research on Toxics v. Brad Barry LLC, et al... Both cases have since been consolidated and now include nearly eighty defendants, which constitute the ~~great~~ majority of the coffee industry in California. Plaintiff alleges that the Company and the other defendants failed to provide warnings for their coffee products of exposure to the chemical acrylamide as required under California Health and Safety Code ~~section~~Section 25249.5, the California Safe Drinking Water and Toxic Enforcement Act of 1986, better known as Proposition 65. Plaintiff seeks equitable relief, including

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providing warnings to consumers of coffee products, as well as civil penalties in the amount of the statutory maximum of two thousand five hundred dollars per day per violation of Proposition 65. The Plaintiff asserts that every consumed cup of coffee, absent a compliant warning, is equivalent to a violation under Proposition 65.

The Company, as part of a joint defense group organized to defend against the lawsuit, disputes the claims of the Plaintiff. Acrylamide is not added to coffee but is present in all coffee in small amounts (parts per billion) as a byproduct of the coffee bean roasting process. The Company has asserted multiple affirmative defenses. Trial of the first phase of the case (“Phase 1”) commenced on September 8, 2014, and was limited to three affirmative defenses shared by all defendants. On September 1, 2015, the trial court issued a final ruling adverse to defendants on all Phase 1 defenses. Trial of the second phase of the case (“Phase 2”) commenced in the fall of 2017. On May 7, 2018, the trial court issued a ruling adverse to defendants on the Phase 2 defense, the Company's last remaining defense to liability. On June 22, 2018, the California Office of Environmental Health Hazard Assessment (OEHHA) proposed a new regulation clarifying that cancer warnings are not required for coffee under Proposition 65. The case was set to proceed to a third phase trial (“Phase 3”) on damages, remedies and attorneys' fees on

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October 15, 2018. However, on October 12, 2018, the California Court of Appeal granted the ~~defendants~~defendants’ request for a stay of the Phase 3 trial.

On June 3, 2019, the California Office of Administrative Law (OAL) approved the coffee exemption regulation. The regulation became effective on October 1, 2019. On June 24, 2019, the California Court of Appeal lifted the stay of the litigation. At the status conference on August 25, 2020, the trial judge granted the defendants’ motion for summary judgment, ruling that the coffee exemption regulation is a complete defense to the Plaintiff’s complaint. The Notice of Entry of Judgment from the court was served on October 6, 2020, and the Plaintiff filed a Notice of Appeal on November 20, ~~2020. The court issued~~2020 and its opening brief in the appeals process on April 9, 2021. Defendants filed their response brief on August 9, 2021, and Plaintiff filed a ~~briefing schedule, and the parties are working through the appellate process.~~reply on November 15, 2021. Starbucks believes that the likelihood that the Company will ultimately incur a material loss in connection with this litigation is less than reasonably possible. Accordingly, as of April 3, 2022, no loss contingency ~~was~~has been recorded for this matter.

Starbucks is party to various other legal proceedings arising in the ordinary course of business, including certain employment litigation cases that have been certified as class or collective actions, but, except as noted above, 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.

Note ~~15:~~14: Segment Reporting

Segment information is prepared on the same basis that our ~~ceo,~~interim chief executive officer, who is our ~~Chief Operating Decision Maker,~~chief operating decision maker, manages the segments, evaluates financial results and makes key operating decisions.

Consolidated revenue mix by product type~~(1)~~ (in millions):


		Quarter Ended								Two Quarters Ended									Quarter Ended								Two Quarters Ended
		Mar 28, 2021				Mar 29, 2020				Mar 28, 2021				Mar 29, 2020					Apr 3, 2022				Mar 28, 2021				Apr 3, 2022				Mar 28, 2021
Beverage~~(2)~~(1)	Beverage~~(2)~~(1)	$	4,212.8	63	%	$	3,530.9	59	%	$	8,464.5	63	%	$	7,789.4	59	%	Beverage~~(2)~~(1)	$	4,599.0	60	%	$	4,212.8	63	%	$	9,497.4	60	%	$	8,464.5	63	%
Food~~(3)~~(2)	Food~~(3)~~(2)	1,131.4		17	%	968.7		16	%	2,272.0		17	%	2,128.4		16	%	Food~~(3)~~(2)	1,364.3		18	%	1,131.4		17	%	2,798.9		18	%	2,272.0		17	%
Other~~(4)~~(3)	Other~~(4)~~(3)	1,323.8		20	%	1,496.1		25	%	2,681.0		20	%	3,175.0		25	%	Other~~(4)~~(3)	1,672.3		22	%	1,323.8		20	%	3,389.7		22	%	2,681.0		20	%
Total	Total	$	6,668.0	100	%	$	5,995.7	100	%	$	13,417.5	100	%	$	13,092.8	100	%	Total	$	7,635.6	100	%	$	6,668.0	100	%	$	15,686.0	100	%	$	13,417.5	100	%

(1)~~Certain prior period amounts have been reclassified to conform to current period presentation.~~

~~(2)~~Beverage represents sales within our company-operated stores.

~~(3)~~(2)Food includes sales within our company-operated stores.

~~(4)~~(3)~~“Other”~~Other primarily consists of packaged and single-serve coffees and teas, royalty and licensing revenues, serveware, beverage-related ingredients and ready-to-drink beverages, among other items.

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The ~~table~~tables below ~~presents~~present financial information for our reportable operating segments and Corporate and Other segment (in millions):

Quarter Ended


													North America (1)		International (1)		Channel Development		Corporate and Other (1)		Total
April 3, 2022												April 3, 2022
Total net revenues												Total net revenues	$	5,445.7	$	1,702.4	$	463.1	$	24.4	$	7,635.6
Depreciation and amortization expenses												Depreciation and amortization expenses	202.0		133.4		—		32.3		367.7
Income from equity investees												Income from equity investees	—		0.6		48.5		—		49.1
Operating income/(loss)												Operating income/(loss)	931.5		180.7		197.9		(361.2)		948.9
		Americas		International		Channel Development		Corporate and Other		Total
March 28, 2021	March 28, 2021											March 28, 2021
Total net revenues	Total net revenues	$	4,664.6	$	1,610.9	$	369.9	$	22.6	$	6,668.0	Total net revenues	$	4,638.5	$	1,637.0	$	369.9	$	22.6	$	6,668.0
Depreciation and amortization expenses	Depreciation and amortization expenses	186.0		143.4		0.3		37.0		366.7		Depreciation and amortization expenses	186.0		143.4		0.3		37.0		366.7
Income from equity investees	Income from equity investees	0		26.8		50.3		0		77.1		Income from equity investees	—		26.8		50.3		—		77.1
Operating income/(loss)	Operating income/(loss)	905.3		251.5		172.6		(341.8)		987.6		Operating income/(loss)	896.4		258.1		172.6		(339.5)		987.6

March 29, 2020
Two Quarters Ended												Two Quarters Ended
													North America		International		Channel Development		Corporate and Other		Total
April 3, 2022												April 3, 2022
Total net revenues	Total net revenues	$	4,330.0	$	1,134.6	$	519.1	$	12.0	$	5,995.7	Total net revenues	$	11,178.0	$	3,578.4	$	880.1	$	49.5	$	15,686.0
Depreciation and amortization expenses	Depreciation and amortization expenses	191.5		130.0		0.3		34.5		356.3		Depreciation and amortization expenses	402.1		266.5		—		65.2		733.8
Income from equity investees	Income from equity investees	0		24.8		43.1		0		67.9		Income from equity investees	—		1.3		88.1		—		89.4
Operating income/(loss)	Operating income/(loss)	621.2		(15.4)		189.6		(308.0)		487.4		Operating income/(loss)	2,014.6		480.3		381.1		(749.3)		2,126.7

Two Quarters Ended
		Americas		International		Channel Development		Corporate and Other		Total
March 28, 2021	March 28, 2021											March 28, 2021
Total net revenues	Total net revenues	$	9,367.9	$	3,265.3	$	741.2	$	43.1	$	13,417.5	Total net revenues	$	9,314.2	$	3,319.0	$	741.2	$	43.1	$	13,417.5
Depreciation and amortization expenses	Depreciation and amortization expenses	374.9		283.4		0.6		73.7		732.6		Depreciation and amortization expenses	374.9		283.4		0.6		73.7		732.6
Income from equity investees	Income from equity investees	0		53.0		106.7		0		159.7		Income from equity investees	—		53.0		106.7		—		159.7
Operating income/(loss)	Operating income/(loss)	1,718.7		526.3		353.3		(697.1)		1,901.2		Operating income/(loss)	1,699.3		541.0		353.3		(692.4)		1,901.2

March 29, 2020
Total net revenues		$	9,340.9	$	2,705.7	$	1,013.7	$	32.5	$	13,092.8
Depreciation and amortization expenses		380.7		256.7		0.6		69.4		707.4
Income from equity investees		0		55.8		86.1		0		141.9
Operating income/(loss)		1,720.0		260.5		365.1		(638.4)		1,707.2

(1)North America and International total net revenues and operating income and Corporate and Other operating loss for the quarter and two quarters ended March 28, 2021, have been restated to conform with current period presentation.

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

CAUTIONARY STATEMENT PURSUANT TO THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Certain statements herein are “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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,” “project,” “seek,” “should,” “will,” “would,” and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These statements include statements relating to trends in or expectations relating to the ~~expected~~ effects of our existing and any future initiatives, strategies, investments and plans, as well as trends in or expectations regarding our financial results and long-term growth model and ~~drivers,~~drivers; our operations in the ~~anticipated timing~~U.S. and ~~effects~~China; our environmental, social and governance efforts; our partners; economic and consumer trends, including the impact of ~~recovery of our business,~~inflationary pressures; the conversion of several market operations to fully licensed ~~models,~~models; our plans for streamlining our operations, including store openings, closures and changes in store formats and ~~models,~~models; expanding our licensing to Nestlé of our consumer packaged goods and Foodservice businesses and its effects on our Channel Development segment ~~results,~~results; tax ~~rates,~~rates; business opportunities and ~~expansion,~~expansion; strategic ~~acquisitions, expenses,~~acquisitions; our dividends ~~share repurchases,~~programs; commodity costs and our ~~mitigation strategies,~~mitgation strategy; our liquidity, cash flow from operations, ~~use of cash and cash requirements,~~ investments, borrowing capacity and use of ~~proceeds,~~proceeds; continuing compliance with our covenants under our credit facilities and commercial paper program; repatriation of cash to the U.S.,; the likelihood of the issuance of additional debt and the applicable interest ~~rate,~~rate; the continuing impact of the COVID-19 ~~outbreak~~pandemic on our financial results ~~credits available to us under the CARES Act~~ and future availability of governmental subsidies for COVID-19 or other ~~government credits,~~public health events; our ceo transition; our share repurchase program; our use of cash and cash requirements; the expected effects of new accounting pronouncements and the estimated impact of changes in U.S. tax law, including on tax rates, investments funded by these changes and potential ~~outcomes~~outcomes; and effects of legal proceedings. Such statements are based on currently available operating, financial and competitive information and are subject to various risks and uncertainties. Actual future results and trends may differ materially depending on a variety of factors, including, but not limited to: further spread of COVID-19 and related disruptions to our business; regulatory measures or voluntary actions that may be put in place to limit the spread of COVID-19, including restrictions on business operations or social distancing requirements, and the duration and efficacy of such restrictions; the ~~potential for a~~ resurgence of COVID-19 infections ~~in a given geographic region after it has hit its “peak”;~~and the circulation of novel variants of COVID-19; fluctuations in U.S. and international economies and currencies; our ability to preserve, grow and leverage our brands; the ability of our business partners and third-party providers to fulfill their responsibilities and commitments; potential negative effects of incidents involving food or beverage-borne illnesses, tampering, adulteration, contamination or mislabeling; potential negative effects of material breaches of our information technology systems to the extent we experience a material breach; material failures of our information technology systems; costs associated with, and the successful execution of, the Company’s initiatives and plans; new initiatives and plans ~~including the successful expansion of our Global Coffee Alliance with Nestlé;~~or revisions to existing initiatives or plans; our ability to obtain financing on acceptable terms; the acceptance of the Company’s products by our customers, evolving consumer preferences and tastes and changes in consumer spending behavior; partner investments, changes in the availability and cost of ~~labor;~~labor including any union organizing efforts and our responses to such efforts; failure to attract or retain key executive or employee talent; significant increased logistics costs; inflationary pressures; the impact of competition; inherent risks of operating a global ~~business;~~business including any potential negative effects stemming from the Russian invasion of Ukraine; the prices and availability of coffee, dairy and other raw materials; the effect of legal proceedings; the effects of changes in tax laws and related guidance and regulations that may be implemented and other risks detailed in our filings with the SEC, including in Part I Item IA “Risk Factors” in the 10-K.

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 report. We are under no obligation to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise.

This information should be read in conjunction with the consolidated financial statements and the notes included in Item 1 of Part I of this 10-Q and the audited consolidated financial statements and notes, and Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), contained in the ~~10-K.~~10-K filed with the SEC on November 19, 2021.

Introduction and Overview

Starbucks is the premier ~~coffee~~ roaster, marketer and retailer of specialty coffee ~~with operations~~ in ~~83 markets around~~ the ~~world.~~world, operating in 84 markets. As of ~~March 28, 2021,~~April 3, 2022, Starbucks had ~~over 32,900~~more than 34,600 company-operated and licensed stores, an increase of 3%5% from the prior year. Additionally, we sell a variety of consumer-packaged goods, ~~or CPG,~~ primarily through the Global Coffee Alliance established with Nestlé and other partnerships and joint ventures. ~~Our~~During the quarter ended April 3, 2022, our global comparable store sales grew 7%, primarily driven by 12% growth in the U.S. market, partially offset by COVID-19 related restrictions in China, leading to a 23% decrease in China comparable store sales.

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

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Development. Non-reportable operating segments such as Evolution Fresh and unallocated corporate expenses are reported within Corporate and Other.

We believe our financial results and long-term growth model will continue to be driven by new store openings, comparable store sales growth and operating margin ~~management.~~ management, underpinned by disciplined capital allocation. 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. Throughout this MD&A, we commonly discuss the following key operating metrics:

•New store openings and store count

•Comparable store sales ~~represent~~growth

•Operating margin

Comparable store sales growth represents the percentage change in sales in one period from the same prior year period for company-operated stores open for 13 months or longer and exclude the impact of foreign currency translation. We analyze comparable store sales growth on a constant currency basis as this helps identify underlying business trends, without distortion from the effects of currency movements. Stores that are temporarily closed or operating at reduced hours due to the COVID-19 ~~outbreak~~pandemic remain in comparable store sales while stores identified for permanent closure have been removed. ~~During the quarter ended March 28, 2021, our global comparable store sales grew 15%, a reflection of our recovery from the significant adverse impacts from the pandemic in the prior year period.~~

We have three reportable operating segments: Americas, International and Channel Development. Non-reportable operating segments and unallocated corporate expenses are reported within Corporate and Other.

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Our fiscal year ends on the Sunday closest to September 30. Our ~~2021~~ fiscal 2022 year includes 52 weeks while our fiscal 2021 year included 53 weeks, with the 53rd week falling in the fourth quarter of fiscal ~~quarter, while fiscal year 2020 included 52 weeks.~~2021. All references to store counts, including data for new store openings, are reported net of store closures, unless otherwise noted.

~~COVID-19 Update~~

Starbucks results for the second quarter of fiscal ~~2021 reflect continued momentum in the recovery of our business from the effects of the COVID-19 pandemic. The sequential improvements in our quarterly results~~2022 demonstrate the overall strength and resilience of our ~~brand.~~brand, despite continued COVID-19 related disruptions in certain international markets, especially China. Consolidated net revenues increased ~~11%~~15% to $7.6 billion in the second quarter of fiscal 2022 compared to $6.7 billion in the second quarter of fiscal 2021, ~~compared to $6.0 billion~~primarily driven by strength in ~~the second quarter of fiscal 2020, driven primarily~~our U.S. business, incremental revenues from new store openings and growth in our licensed stores, partially offset by ~~lapping lost sales resulting~~continued COVID-19 pandemic related disruptions in China restricting customer mobility. Consolidated operating margin decreased 240 basis points from ~~the COVID-19 outbreak in~~ the prior year to 12.4%, primarily driven by inflationary pressures on commodities and ~~strength~~our supply chain as well as investments and growth in ~~the U.S. business~~retail store partner wages and benefits, partially offset by pricing and lower restructuring expenses in ~~the current year.~~North America.

For both the ~~Americas~~North America segment and the U.S., comparable store sales increased 9%12% for the second quarter of fiscal ~~2021~~2022 compared to ~~a decline~~an increase of 3%9% in the second quarter of fiscal ~~2020. The U.S. market also had a 6% increase in two-year comparable store sales(1), demonstrating our sales in~~2021. Average ticket for both the North America segment and the U.S. ~~had fully recovered from the adverse impacts from the pandemic. We continued~~grew 7%, primarily driven by pricing and increased demand for food items in our U.S. market. The segment also experienced higher costs, primarily related to ~~incur incremental~~increased supply chain costs ~~attributable~~due to ~~COVID-19, including catastrophe pay programs for company-operated~~inflationary pressures, enhancements in retail store ~~partners (employees). These were~~partner wages and increased spend on new partner training and support costs to address labor market conditions, partially offset by ~~qualified tax credits provided by the Coronavirus Aid, Relief~~pricing and Economic Security Act (“CARES Act”) and the Canada Emergency Wage Subsidy (“CEWS”). In fiscal year 2020, we announced a plan to optimize our Americas store portfolio, primarily in dense, metropolitan markets, by blending store formats to better cater to changing customer tastes and preferences. During the second quarter of fiscal 2021, we closed approximately 300 storeslapping restructuring expenses in the U.S. and Canada, and expect to close an additional 200 stores primarily over the next 9 to 12 months to complete our restructuring efforts. Costs incurred related to the restructuring efforts are recorded as restructuring and impairments on our consolidated statement of earnings and will continue to be recorded as stores are identified for closure and are eventually closed.prior period.

For the International segment, comparable store sales ~~increased 35% for~~declined 8%, inclusive of a 3% adverse impact from lapping the ~~second quarter of fiscal 2021 compared to a decline of 31% in the second quarter of fiscal 2020.~~prior-year value-added tax benefit. Comparable store sales for our China market ~~increased 91%, inclusive of value-added tax (“VAT”) favorability of approximately 9% which was reinstated~~declined 23% for the second quarter of fiscal ~~2021. Key markets~~2022, inclusive of a 4% adverse impact from lapping the prior-year value-added tax benefit. Our China market experienced unprecedented COVID-19 pandemic related restrictions in ~~the International segment continued to experience pandemic-related restrictions~~multiple cities that ~~significantly~~severely impacted customer ~~mobility during the quarter. Although nearly all company-operated~~mobility; approximately one third of our stores in ~~these~~China remain temporarily closed or offer mobile ordering channels only. Strong business recovery in other international markets ~~remained open,~~partially offset the ~~modified operating protocols had an adverse impact to comparable store sales and results. Most of~~unfavorability in our ~~International licensed stores were also open with modified operations at the end of the second quarter of fiscal 2021.~~China market.

Net revenues for our Channel Development segment ~~declined $150~~increased $93 million, or ~~29%~~25%, when compared with the second quarter of fiscal ~~2020.~~2021. This was largely due to ~~the transition of certain single-serve~~higher product ~~activities~~sales to ~~Nestlé beginning in~~and royalty revenue from the ~~fourth quarter of fiscal 2020 and lapping~~ Global Coffee Alliance ~~transition-related activities. Our Channel Development segment continues to grow category share as customers adjust to their at-home routines.~~

~~As we lap the adverse impacts of the pandemic in fiscal 2020, we expect the momentum~~and growth in our international ready-to-drink business.

Despite continued COVID-19 induced business ~~recovery~~interruptions, especially in our China market, we have seen the strength and resilience of our brand as well as strong customer demand across our portfolio. However, COVID-19 related mobility restrictions remain in place in China. Additionally, our business expects the weights from inflationary pressures and increased spend due to labor market conditions to continue as well as incremental investments in our partners, technology and digital capabilities. While we anticipate these will have an adverse impact on our operating margin for the remainder of the fiscal year. Absent significant and prolonged COVID-19 relapses or global economic disruptions, and based on the current trend of our retail business recovery and our focused efforts to expand contactless customer experiences, enhance digital capabilities and drive beverage innovation,year, we are confident inthat our strategy will elevate both the ~~strength of our brand~~partner and customer experience, accelerating growth over the ~~durability of our long-term growth model.~~

~~(1)~~Two-year comparable store sales metric is calculated as ((1 + % change in comparable store sales in FY20) * (1 + % change in comparable store sales in FY21)) - 1. Two-year comparable store sales for the U.S. of 6% = ((1 + (-3%)) * (1 + 9%)) - 1.

~~Comparable Store Sales~~

~~Starbucks comparable store sales for the second quarter of fiscal 2021:~~

Quarter Ended Mar 28, 2021 Two Quarters Ended Mar 28, 2021

Change in
Comparable Store Sales
Change in
Transactions
Change in
Ticket
Change in
Comparable Store Sales Change in
Transactions Change in
Ticket
Consolidated 15% (4)% 19% 4% (12)% 18%
Americas 9% (10)% 22% 1% (16)% 21%
International 35% 26% 7% 13% 4% 8%

The above comparable store sales for the quarter ended March 28, 2021 reflect continued recovery from the pandemic, which had a significant adverse impact to our results during the same quarter in the prior year.

~~Refer to our~~ ~~Quarterly Store Data, also included in Item 2 of Part I of this 10-Q, for additional information on our company operated and licensed store portfolio.~~long-term.

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Results of Operations (in millions)

Revenues


		Quarter Ended								Two Quarters Ended									Quarter Ended								Two Quarters Ended
		Mar 28, 2021		Mar 29, 2020		$ Change		% Change		Mar 28, 2021		Mar 29, 2020		$ Change		% Change			Apr 3, 2022		Mar 28, 2021		$ Change		% Change		Apr 3, 2022		Mar 28, 2021		$ Change		% Change
Company-operated stores	Company-operated stores	$	5,653.1	$	4,766.0	$	887.1	18.6	%	$	11,379.6	$	10,546.6	$	833.0	7.9	%	Company-operated stores	$	6,276.7	$	5,653.1	$	623.6	11.0	%	$	12,999.1	$	11,379.6	$	1,619.5	14.2	%
Licensed stores	Licensed stores	595.0		689.8		(94.8)		(13.7)		1,208.8		1,481.9		(273.1)		(18.4)		Licensed stores	849.5		595.0		254.5		42.8		1,700.3		1,208.8		491.5		40.7
Other	Other	419.9		539.9		(120.0)		(22.2)		829.1		1,064.3		(235.2)		(22.1)		Other	509.4		419.9		89.5		21.3		986.6		829.1		157.5		19.0
Total net revenues	Total net revenues	$	6,668.0	$	5,995.7	$	672.3	11.2	%	$	13,417.5	$	13,092.8	$	324.7	2.5	%	Total net revenues	$	7,635.6	$	6,668.0	$	967.6	14.5	%	$	15,686.0	$	13,417.5	$	2,268.5	16.9	%

For the quarter ended April 3, 2022 compared with the quarter ended March 28, 2021 ~~compared with the quarter ended March 29, 2020~~

Total net revenues for the second quarter of fiscal ~~2021~~2022 increased ~~$672~~$968 million, primarily due to higher revenues from company-operated stores ($~~887~~624 million). The growth of company-operated stores ~~revenues~~revenue was driven by a ~~15%~~7% increase in comparable store sales ($~~670~~402 million) ~~attributed~~, attributable to a ~~19%~~4% increase in average ticket ~~partially offset by~~and a ~~4% decrease~~3% increase in comparable transactions. Also contributing to the increase were incremental revenues from ~~469~~885 net new Starbucks® company-operated stores, or a 3%5% increase, over the past 12 months ($~~124~~250 million) ~~and favorable~~. Partially offsetting these increases was unfavorable foreign currency translation ($9455 million).

Licensed stores revenue ~~decreased $95~~increased $255 million ~~primarily~~also contributed to the increase in total net revenues, driven by ~~lower~~higher product and equipment sales to and royalty revenues from our ~~licensees.~~licensees ($228 million) and the conversion of our Korea market from a joint venture to a fully licensed market in the fourth quarter of fiscal 2021 ($40 million).

Other revenues ~~decreased $120~~increased $90 million, primarily due to ~~the transition of certain single-serve product activities to Nestlé and the lapping of~~higher product sales ~~to Nestlé as part of~~and royalty revenue in the ~~Foodservice order fulfillment transition. These were partially offset by~~Global Coffee Alliance and volume growth in ~~at-home coffee and~~ our international ready-to-drink ~~businesses.~~business.

For the two quarters ended April 3, 2022 compared with the two quarters ended March 28, 2021 ~~compared with the two quarters ended March 29, 2020~~

Total net revenues for the first two quarters of fiscal ~~2021~~2022 increased ~~$325 million,~~$2.3 billion, primarily due to higher revenues from company-operated stores ($~~833 million)~~1.6 billion). The growth of company-operated stores ~~revenues~~revenue was driven by a 4%10% increase in comparable store sales ($~~392 million)~~1.1 billion) attributed to ~~an 18%~~a 6% increase in comparable transactions and a 3% increase in average ~~ticket, partially offset by a 12% decrease in transactions.~~ticket. Also contributing to the increase were incremental revenues from ~~469~~885 net new Starbucks® company-operated stores, or a 3%5% increase, over the past 12 months ($~~286~~503 million) ~~and favorable~~. Partially offsetting these increases was unfavorable foreign currency translation ($~~171~~61 million).

Licensed stores revenue ~~decreased $273~~increased $492 million, primarily driven by ~~lower~~higher product and equipment sales to and royalty revenues from our ~~licensees.~~licensees ($434 million) and the conversion of our Korea market from a joint venture to a fully licensed market in the fourth quarter of fiscal 2021 ($79 million).

Other revenues ~~decreased $235~~increased $158 million, primarily due to ~~the transition of certain single-serve~~higher product ~~activities to Nestlé~~sales and ~~the lapping of higher transition activities related to~~royalty revenue in the Global Coffee ~~Alliance. Also contributing were lower Global Coffee~~ Alliance ~~revenues, mainly driven by the Foodservice business, which experienced softening due to COVID-19. These were partially offset by~~and volume growth in ~~at-home coffee and~~ our international ready-to-drink ~~businesses.~~business.

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Operating Expenses


		Quarter Ended										Two Quarters Ended											Quarter Ended										Two Quarters Ended
		Mar 28, 2021		Mar 29, 2020		$ Change		Mar 28, 2021		Mar 29, 2020		Mar 28, 2021		Mar 29, 2020		$ Change		Mar 28, 2021		Mar 29, 2020			Apr 3, 2022		Mar 28, 2021		$ Change		Apr 3, 2022		Mar 28, 2021		Apr 3, 2022		Mar 28, 2021		$ Change		Apr 3, 2022		Mar 28, 2021
								As a % of Total Net Revenues										As a % of Total Net Revenues											As a % of Total Net Revenues										As a % of Total Net Revenues
Product and distribution costs	Product and distribution costs	$	1,992.4	$	1,997.7	$	(5.3)	29.9	%	33.3	%	$	4,041.5	$	4,234.2	$	(192.7)	30.1	%	32.3	%	Product and distribution costs	$	2,465.8	$	1,992.4	$	473.4	32.3	%	29.9	%	$	4,992.7	$	4,041.5	$	951.2	31.8	%	30.1	%
Store operating expenses	Store operating expenses	2,823.3		2,721.4		101.9		42.3		45.4		5,690.7		5,542.9		147.8		42.4		42.3		Store operating expenses	3,314.7		2,823.3		491.4		43.4		42.3		6,714.6		5,690.7		1,023.9		42.8		42.4
Other operating expenses	Other operating expenses	87.7		95.0		(7.3)		1.3		1.6		179.5		196.7		(17.2)		1.3		1.5		Other operating expenses	101.7		87.7		14.0		1.3		1.3		203.4		179.5		23.9		1.3		1.3
Depreciation and amortization expenses	Depreciation and amortization expenses	366.7		356.3		10.4		5.5		5.9		732.6		707.4		25.2		5.5		5.4		Depreciation and amortization expenses	367.7		366.7		1.0		4.8		5.5		733.8		732.6		1.2		4.7		5.5
General and administrative expenses	General and administrative expenses	464.4		406.5		57.9		7.0		6.8		936.5		840.7		95.8		7.0		6.4		General and administrative expenses	481.5		464.4		17.1		6.3		7.0		1,007.3		936.5		70.8		6.4		7.0
Restructuring and impairments	Restructuring and impairments	23.0		(0.7)		23.7		0.3		—		95.2		5.6		89.6		0.7		—		Restructuring and impairments	4.4		23.0		(18.6)		0.1		0.3		(3.1)		95.2		(98.3)		—		0.7

Total operating expenses	Total operating expenses	5,757.5		5,576.2		181.3		86.3		93.0		11,676.0		11,527.5		148.5		87.0		88.0		Total operating expenses	6,735.8		5,757.5		978.3		88.2	%	86.3	%	13,648.7		11,676.0		1,972.7		87.0		87.0
Income from equity investees	Income from equity investees	77.1		67.9		9.2		1.2		1.1		159.7		141.9		17.8		1.2		1.1		Income from equity investees	49.1		77.1		(28.0)		0.6		1.2		89.4		159.7		(70.3)		0.6		1.2
Operating income	Operating income	$	987.6	$	487.4	$	500.2	14.8	%	8.1	%	$	1,901.2	$	1,707.2	$	194.0	14.2	%	13.0	%	Operating income	$	948.9	$	987.6	$	(38.7)	12.4	%	14.8	%	$	2,126.7	$	1,901.2	$	225.5	13.6	%	14.2	%
Store operating expenses as a % of company-operated store revenues								49.9	%	57.1	%							50.0	%	52.6	%
Store operating expenses as a % of company-operated stores revenue																						Store operating expenses as a % of company-operated stores revenue							52.8	%	49.9	%							51.7	%	50.0	%

For the quarter ended April 3, 2022 compared with the quarter ended March 28, 2021 ~~compared with the quarter ended March 29, 2020~~

Product and distribution costs as a percentage of total net revenues ~~decreased 340~~increased 240 basis points for the second quarter of fiscal ~~2021,~~2022, primarily due to sales leverage driven by lapping the severe impact of the COVID-19 pandemic in the prior year. Also contributing were the lapping of inventory write-offs and product waste in the prior year (approximately 90 basis points).supply chain costs due to inflationary pressures.

Store operating expenses as a percentage of total net revenues ~~decreased 310~~increased 110 basis points for the second quarter of fiscal ~~2021.~~2022. Store operating expenses as a percentage of company-operated ~~store revenues decreased 720~~stores revenue increased 290 basis points, primarily due to ~~sales leverage driven by~~enhancements in retail store partner wages and benefits (approximately 260 basis points), lapping ~~the severe impact~~ of ~~the COVID-19 pandemic~~higher temporary government subsidies in the prior year ~~and higher benefits in the current year provided by temporary subsidies from the U.S. and certain foreign governments~~ (approximately ~~130~~150 basis points)~~. These were~~ and increased spend on new partner training and support costs to address labor market conditions (approximately 80 basis points), partially offset by ~~additional investments and growth in retail store partners wages and benefits (approximately 300 basis points).~~sales leverage.

Other operating expenses ~~decreased $7~~increased $14 million for the second quarter of fiscal ~~2021,~~2022, primarily due to ~~lapping prior year incremental~~higher support costs ~~to develop~~for our growing licensed markets ($4 million) and ~~grow the Global Coffee Alliance.~~strategic investments in technology and other initiatives ($3 million).

Depreciation and amortization expenses as a percentage of total net revenues decreased 4070 basis points, primarily due to sales leverage.

General and administrative expenses increased ~~$58~~$17 million, primarily due to incremental ~~strategic~~ investments in technology ($2524 million), increased partner wages and benefits ($19 million) and ~~higher~~increased support costs to address labor market conditions ($10 million). These increases were partially offset by lower performance-based compensation ~~recognizing the better than expected business recovery~~ ($2533 million).

Restructuring and impairment expenses ~~increased $24~~decreased $19 million, primarily due to lower restructuring activities related to our North America store portfolio optimization in the prior year, specifically lower accelerated lease right-of-use asset amortization ~~of right-of-use lease assets associated with the closure of certain company-operated stores~~costs ($1413 million) and ~~higher~~lower asset impairment charges ($87 million) ~~related to store portfolio optimization.~~.

Income from equity investees ~~increased $9~~decreased $28 million, primarily due to ~~higher income~~the conversion of our Korea market from ~~our North American Coffee Partnership~~a joint ~~venture.~~venture to a fully licensed market in the fourth quarter of fiscal 2021 ($27 million).

The combination of these changes resulted in an overall ~~increase~~decrease in operating margin of ~~670~~240 basis points for the second quarter of fiscal ~~2021.~~2022.

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For the two quarters ended ~~March 28, 2021~~April 3, 2022 compared with the two quarters ended March ~~29, 2020~~28, 2021

Product and distribution costs as a percentage of total net revenues ~~decreased 220~~increased 170 basis points for the first two quarters of fiscal ~~2021,~~2022, primarily due to sales leverage driven by lapping the severe impact of the COVID-19 pandemic in the prior year. Also contributing were the lapping of inventory write-offs and product waste in the prior year (approximately 30 basis points).supply chain costs due to inflationary pressures.

Store operating expenses as a percentage of total net revenues increased 1040 basis points for the first two quarters of fiscal ~~2021.~~2022. Store operating expenses as a percentage of company-operated ~~store revenues decreased 260~~stores revenue increased 170 basis points, primarily due to ~~labor efficiencies~~enhancements in retail store partner wages and benefits (approximately ~~170~~280 basis points), ~~benefits provided by~~lapping of higher temporary government subsidies ~~from~~in the ~~U.S. and certain foreign governments~~prior year (approximately 80 basis points) and ~~sales leverage driven by lapping the severe impact of the COVID-19 pandemic in the prior year. These were~~increased spend on new partner training and support costs to address labor market conditions (approximately 100 basis points), partially offset by ~~additional investments and growth in retail store partners wages and benefits (approximately 230 basis points).~~sales leverage.

Other operating expenses ~~decreased $17~~increased $24 million for the first two quarters of fiscal ~~2021,~~2022, primarily due to ~~lapping prior year incremental~~higher support costs for our growing licensed markets ($11 million) and strategic investments in technology and other initiatives ($4 million).

Depreciation and amortization expenses as a percentage of total net revenues decreased 80 basis points, primarily due to ~~develop and grow the Global Coffee Alliance.~~sales leverage.

General and administrative expenses increased ~~$96~~$71 million, primarily due to incremental ~~strategic~~ investments in technology ($5352 million), increased partner wages and benefits ($38 million) and ~~higher~~increased support costs to address labor market conditions ($11 million). These increases were partially offset by lower performance-based compensation ~~recognizing the better than expected business recovery~~ ($4341 million).

Restructuring and impairment expenses ~~increased $90~~decreased $98 million, primarily due to ~~higher~~lower restructuring activities related to our North America store portfolio optimization in the prior year, specifically lower accelerated lease right-of-use asset amortization costs ($52 million) and lower asset impairment charges ($5048 million) ~~and accelerated amortization of right-of-use lease assets associated with the closure of certain company-operated stores ($40 million), related to store portfolio optimization.~~.

Income from equity investees ~~increased $18~~decreased $70 million, primarily due to ~~higher~~the conversion of our Korea market from a joint venture to a fully licensed market in the fourth quarter of fiscal 2021 ($54 million) and lower income from our North American Coffee Partnership joint venture ~~partially offset by temporary store closures and reduced operating hours in our South Korea and India joint ventures.~~($19 million).

The combination of these changes resulted in an overall ~~increase~~decrease in operating margin of ~~120~~60 basis points for the first two quarters of fiscal ~~2021.~~2022.

Other Income and Expenses


	Quarter Ended										Two Quarters Ended
	Apr 3, 2022		Mar 28, 2021		$ Change		Apr 3, 2022		Mar 28, 2021		Apr 3, 2022		Mar 28, 2021		$ Change		Apr 3, 2022		Mar 28, 2021
							As a % of Total Net Revenues										As a % of Total Net Revenues
Operating income	$	948.9	$	987.6	$	(38.7)	12.4	%	14.8	%	$	2,126.7	$	1,901.2	$	225.5	13.6	%	14.2	%


Interest income and other, net	46.3		17.3		29.0		0.6		0.3		46.2		32.7		13.5		0.3		0.2
Interest expense	(119.1)		(115.0)		(4.1)		(1.6)		(1.7)		(234.4)		(235.8)		1.4		(1.5)		(1.8)
Earnings before income taxes	876.1		889.9		(13.8)		11.5		13.3		1,938.5		1,698.1		240.4		12.4		12.7
Income tax expense	201.1		230.5		(29.4)		2.6		3.5		447.4		416.5		30.9		2.9		3.1
Net earnings including noncontrolling interests	675.0		659.4		15.6		8.8		9.9		1,491.1		1,281.6		209.5		9.5		9.6
Net earnings attributable to noncontrolling interests	0.5		—		0.5		—		—		0.7		—		0.7		—		—
Net earnings attributable to Starbucks	$	674.5	$	659.4	$	15.1	8.8	%	9.9	%	$	1,490.4	$	1,281.6	$	208.8	9.5	%	9.6	%
Effective tax rate including noncontrolling interests							23.0	%	25.9	%							23.1	%	24.5	%

Quarter Ended Two Quarters Ended
Mar 28,
2021 Mar 29,
2020
$
Change
Mar 28,
2021 Mar 29,
2020 Mar 28,
2021 Mar 29,
2020 $
Change Mar 28,
2021 Mar 29,
2020
As a % of Total
Net Revenues
As a % of Total
Net Revenues
Operating income $ 987.6 $ 487.4 $ 500.2 14.8 % 8.1 % $ 1,901.2 $ 1,707.2 $ 194.0 14.2 % 13.0 %
Interest income and other, net 17.3 2.0 15.3 0.3 — 32.7 18.0 14.7 0.2 0.1
Interest expense (115.0) (99.2) (15.8) (1.7) (1.7) (235.8) (191.1) (44.7) (1.8) (1.5)
Earnings before income taxes 889.9 390.2 499.7 13.3 6.5 1,698.1 1,534.1 164.0 12.7 11.7
Income tax expense 230.5 65.4 165.1 3.5 1.1 416.5 324.0 92.5 3.1 2.5
Net earnings including noncontrolling interests 659.4 324.8 334.6 9.9 5.4 1,281.6 1,210.1 71.5 9.6 9.2
Net loss attributable to noncontrolling interests — (3.6) 3.6 — (0.1) — (4.0) 4.0 — —
Net earnings attributable to Starbucks $ 659.4 $ 328.4 $ 331.0 9.9 % 5.5 % $ 1,281.6 $ 1,214.1 $ 67.5 9.6 % 9.3 %
Effective tax rate including noncontrolling interests 25.9 % 16.8 % 24.5 % 21.1 %

For the quarter ended April 3, 2022 compared with the quarter ended March 28, 2021 ~~compared with the quarter ended March 29, 2020~~

Interest income and other, net increased $15 million, primarily due to additional gains from certain investments and net favorable fair value adjustments from derivatives used to manage our risk of commodity risk price fluctuations.

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Interest income and other, net increased $29 million, primarily due to higher net gains from certain investments.

Interest expense increased ~~$16~~$4 million, primarily due to additional interest incurred on long-term debt issued in ~~March 2020 and May 2020.~~February 2022.

The effective tax rate for the quarter ended ~~March 28, 2021~~April 3, 2022 was ~~25.9%~~23.0% compared to ~~16.8%~~25.9% for the same ~~quarter~~period in fiscal ~~2020.~~2021. The ~~increase~~decrease was primarily due to ~~higher earnings, including~~a beneficial return-to-provision adjustment recorded related to the ~~foreign rate differential on our jurisdictional mix of earnings, partially offset by lapping valuation allowances recorded against deferred tax assets~~prior year divestiture of certain ~~international jurisdictions in~~joint venture operations.

For the ~~prior year.~~

~~For~~two quarters ended April 3, 2022 compared with the two quarters ended March 28, 2021 ~~compared with the two quarters ended March 29, 2020~~

Interest income and other, net increased ~~$15~~$14 million, primarily due to ~~additional~~higher net gains from certain ~~investments and net favorable fair value adjustments from derivatives used to manage our risk of commodity risk price fluctuations.~~

~~Interest expense increased $45 million, primarily due to additional interest incurred on long-term debt issued in March 2020 and May 2020.~~investments.

The effective tax rate for the first two quarters ended ~~March 28, 2021~~April 3, 2022 was ~~24.5%~~23.1% compared to ~~21.1%~~24.5% for the same period in fiscal ~~2020.~~2021. The ~~increase~~decrease was primarily due to ~~higher earnings, including~~a beneficial return-to-provision adjustment recorded related to the ~~foreign rate differential on our jurisdictional mix of earnings, partially offset by lapping valuation allowances recorded against deferred tax assets~~prior year divestiture of certain ~~international jurisdictions in the prior year.~~

~~Table of Contents~~

joint venture operations.

Segment Information

Results of operations by segment (in millions):

~~Americas~~North America (1)


	Quarter Ended										Two Quarters Ended
	Apr 3, 2022		Mar 28, 2021		$ Change		Apr 3, 2022		Mar 28, 2021		Apr 3, 2022		Mar 28, 2021		$ Change		Apr 3, 2022		Mar 28, 2021
							As a % of North America Total Net Revenues										As a % of North America Total Net Revenues
Net revenues:
Company-operated stores	$	4,936.3	$	4,268.4	$	667.9	90.6	%	92.0	%	$	10,150.4	$	8,553.2	$	1,597.2	90.8	%	91.8	%
Licensed stores	507.0		368.1		138.9		9.3		7.9		1,022.9		756.6		266.3		9.2		8.1
Other	2.4		2.0		0.4		—		—		4.7		4.4		0.3		—		—
Total net revenues	5,445.7��		4,638.5		807.2		100.0		100.0		11,178.0		9,314.2		1,863.8		100.0		100.0
Product and distribution costs	1,564.0		1,213.1		350.9		28.7		26.2		3,193.4		2,473.5		719.9		28.6		26.6
Store operating expenses	2,625.4		2,203.1		422.3		48.2		47.5		5,327.7		4,442.1		885.6		47.7		47.7
Other operating expenses	47.1		39.2		7.9		0.9		0.8		95.3		80.7		14.6		0.9		0.9
Depreciation and amortization expenses	202.0		186.0		16.0		3.7		4.0		402.1		374.9		27.2		3.6		4.0
General and administrative expenses	71.3		77.7		(6.4)		1.3		1.7		148.0		148.5		(0.5)		1.3		1.6
Restructuring and impairments	4.4		23.0		(18.6)		0.1		0.5		(3.1)		95.2		(98.3)		—		1.0
Total operating expenses	4,514.2		3,742.1		772.1		82.9		80.7		9,163.4		7,614.9		1,548.5		82.0		81.8

Operating income	$	931.5	$	896.4	$	35.1	17.1	%	19.3	%	$	2,014.6	$	1,699.3	$	315.3	18.0	%	18.2	%
Store operating expenses as a % of company-operated stores revenue							53.2	%	51.6	%							52.5	%	51.9	%

Quarter Ended Two Quarters Ended
Mar 28,
2021 Mar 29,
2020
$
Change
Mar 28,
2021 Mar 29,
2020 Mar 28,
2021 Mar 29,
2020 $
Change Mar 28,
2021 Mar 29,
2020
As a % of Americas
Total Net Revenues
As a % of Americas
Total Net Revenues
Net revenues:
Company-operated stores $ 4,268.4 $ 3,863.6 $ 404.8 91.5 % 89.2 % $ 8,553.2 $ 8,334.6 $ 218.6 91.3 % 89.2 %
Licensed stores 394.2 464.2 (70.0) 8.5 10.7 810.3 1,001.5 (191.2) 8.6 10.7
Other 2.0 2.2 (0.2) — 0.1 4.4 4.8 (0.4) — 0.1
Total net revenues 4,664.6 4,330.0 334.6 100.0 100.0 9,367.9 9,340.9 27.0 100.0 100.0
Product and distribution costs 1,227.6 1,248.2 (20.6) 26.3 28.8 2,503.8 2,636.6 (132.8) 26.7 28.2
Store operating expenses 2,203.1 2,158.6 44.5 47.2 49.9 4,442.1 4,373.0 69.1 47.4 46.8
Other operating expenses 41.9 41.8 0.1 0.9 1.0 84.7 84.3 0.4 0.9 0.9
Depreciation and amortization expenses 186.0 191.5 (5.5) 4.0 4.4 374.9 380.7 (5.8) 4.0 4.1
General and administrative expenses 77.7 68.2 9.5 1.7 1.6 148.5 140.6 7.9 1.6 1.5
Restructuring and impairments 23.0 0.5 22.5 0.5 — 95.2 5.7 89.5 1.0 0.1
Total operating expenses 3,759.3 3,708.8 50.5 80.6 85.7 7,649.2 7,620.9 28.3 81.7 81.6
Operating income $ 905.3 $ 621.2 $ 284.1 19.4 % 14.3 % $ 1,718.7 $ 1,720.0 $ (1.3) 18.3 % 18.4 %
Store operating expenses as a % of company-operated store revenues 51.6 % 55.9 % 51.9 % 52.5 %
(1)North America licensed stores revenue, total net revenues, product and distribution costs, other operating expenses, total operating expenses and operating income for the quarter and two quarters ended March 28, 2021, have been restated to conform with current period presentation.

For the quarter ended April 3, 2022 compared with the quarter ended March 28, 2021 ~~compared with the quarter ended March 29, 2020~~

Table of Contents

Revenues

~~Americas~~North America total net revenues for the second quarter of fiscal ~~2021~~2022 increased ~~$335~~$807 million, or 8%17%, primarily due to a 9%12% increase in comparable store sales ($~~349~~510 million) driven by a ~~22%~~7% increase in average ticket ~~partially offset by~~and a ~~10% decrease~~5% increase in ~~transactions and~~transactions. Also contributing to these increases were the ~~opening~~performance of new ~~company-operated~~ stores compared to the closure of underperforming stores in prior year including stores related to our restructuring plan ($45146 million)~~. These increases were partially offset by lower~~ and higher product and equipment sales to and royalty revenues from our licensees ($70139 million)~~, primarily due to the impact of the COVID-19 pandemic.~~

~~Table of Contents~~

Operating Margin

~~Americas~~North America operating income for the second quarter of fiscal ~~2021~~2022 increased ~~46%~~4% to ~~$905~~$932 million, compared to ~~$621~~$896 million in the second quarter of fiscal ~~2020.~~2021. Operating margin ~~increased 510~~decreased 220 basis points to ~~19.4%~~17.1%, primarily due to ~~the lapping of COVID-19 related~~higher supply chain costs ~~mostly catastrophe~~resulting from inflationary pressures (approximately 350 basis points), investments in labor including enhancements in retail store partner wages and ~~service pay for store partners~~benefits (approximately ~~140~~280 basis points) and ~~inventory write-offs~~support costs to address labor market conditions (approximately ~~110~~100 basis points)~~, sales leverage from business recovery, and pricing (approximately 120 basis points). Temporary~~ as well as lapping temporary subsidies provided by the CARES Act and CEWS (approximately 70140 basis points). These were partially offset by sales leverage as well as pricing (approximately 390 basis points), sourcing savings (approximately 80 basis points), lower restructuring activity expenses (approximately 40 basis points) and benefits from the closure of lower-performing stores (approximately 70 basis points) also contributed. These increases were partially offset by additional growth and investments in retail store partners wages and benefits (approximately 320 basis points) and higher restructuring expenses relating to our Americas portfolio optimization (approximately 5040 basis points).

For the two quarters ended ~~March 28, 2021~~April 3, 2022 compared with the two quarters ended March ~~29, 2020~~28, 2021

Revenues

~~Americas~~North America total net revenues for the first two quarters of fiscal ~~2021~~2022 increased ~~$27 million,~~$1.9 billion, or 20% primarily due to a 1%15% increase in comparable store sales ($~~107 million)~~1.3 billion) driven by a ~~21%~~9% increase in transactions and a 6% increase in average ~~ticket, partially offset by a 16% decrease in transactions and~~ticket. Also contributing to these increases were the ~~opening~~performance of new ~~company-operated~~ stores compared to the closure of underperforming stores in prior year including stores related to our restructuring plan ($~~106~~287 million)~~. These increases were partially offset by lower~~ and higher product and equipment sales to and royalty revenues from our licensees ($~~190~~268 million), primarily due to ~~the~~business recovery from impact of the COVID-19 pandemic.

Operating Margin

~~Americas~~North America operating income for the first two quarters of fiscal ~~2021 was relatively flat at $1.7~~2022 increased 19% to $2.0 billion, compared to $1.7 billion for the ~~second quarter of~~same period in fiscal ~~2020.~~2021. Operating margin decreased 1020 basis points to ~~18.3%~~18.0%, primarily due to ~~additional growth and~~ investments in labor including enhancements in retail store ~~partners~~partner wages and benefits (approximately ~~250~~310 basis points)~~. Higher restructuring expenses relating~~ and increased spend on new partner training and support costs to ~~our Americas portfolio optimization (approximately 90 basis points) also contributed to the decrease. Partially offsetting these decreases were improved~~address labor ~~efficiencies (approximately 170 basis points), pricing~~market conditions (approximately 120 basis points), higher supply chain costs resulting from inflationary pressures (approximately 300 basis points) and lapping temporary ~~benefits~~subsidies provided by the CARES Act and CEWS (approximately 6090 basis points). These were partially offset by sales leverage as well as pricing (approximately 300 basis points), lower restructuring activity expenses (approximately 100 basis points), sourcing savings (approximately 80 basis points) and benefits from the closure of lower-performing stores (approximately 50 basis points).

Table of Contents

International (1)


	Quarter Ended										Two Quarters Ended
	Apr 3, 2022		Mar 28, 2021		$ Change		Apr 3, 2022		Mar 28, 2021		Apr 3, 2022		Mar 28, 2021		$ Change		Apr 3, 2022		Mar 28, 2021
							As a % of International Total Net Revenues										As a % of International Total Net Revenues
Net revenues:
Company-operated stores	$	1,340.4	$	1,384.7	$	(44.3)	78.7	%	84.6	%	$	2,848.7	$	2,826.4	$	22.3	79.6	%	85.2	%
Licensed stores	342.5		226.9		115.6		20.1		13.9		677.4		452.2		225.2		18.9		13.6
Other	19.5		25.4		(5.9)		1.1		1.6		52.3		40.4		11.9		1.5		1.2
Total net revenues	1,702.4		1,637.0		65.4		100.0		100.0		3,578.4		3,319.0		259.4		100.0		100.0
Product and distribution costs	580.5		528.0		52.5		34.1		32.3		1,196.4		1,064.2		132.2		33.4		32.1
Store operating expenses	689.3		620.2		69.1		40.5		37.9		1,386.9		1,248.6		138.3		38.8		37.6
Other operating expenses	39.5		32.0		7.5		2.3		2.0		78.7		67.6		11.1		2.2		2.0
Depreciation and amortization expenses	133.4		143.4		(10.0)		7.8		8.8		266.5		283.4		(16.9)		7.4		8.5
General and administrative expenses	79.6		82.1		(2.5)		4.7		5.0		170.9		167.2		3.7		4.8		5.0

Total operating expenses	1,522.3		1,405.7		116.6		89.4		85.9		3,099.4		2,831.0		268.4		86.6		85.3
Income from equity investees	0.6		26.8		(26.2)		—		1.6		1.3		53.0		(51.7)		—		1.6
Operating income	$	180.7	$	258.1	$	(77.4)	10.6	%	15.8	%	$	480.3	$	541.0	$	(60.7)	13.4	%	16.3	%
Store operating expenses as a % of company-operated stores revenue							51.4	%	44.8	%							48.7	%	44.2	%

(1)International licensed stores revenue, total net revenues, product and distribution costs, other operating expenses, general and administrative expenses, total operating expenses and operating income for the quarter and two quartersended March 28, 2021, have been restated to conform with current period presentation.

Quarter Ended Two Quarters Ended
Mar 28,
2021 Mar 29,
2020
$
Change
Mar 28,
2021 Mar 29,
2020 Mar 28,
2021 Mar 29,
2020
$
Change
Mar 28,
2021 Mar 29,
2020
As a % of International
Total Net Revenues As a % of International
Total Net Revenues
Net revenues:
Company-operated stores $ 1,384.7 $ 902.4 $ 482.3 86.0 % 79.5 % $ 2,826.4 $ 2,212.0 $ 614.4 86.6 % 81.8 %
Licensed stores 200.8 225.6 (24.8) 12.5 19.9 398.5 480.4 (81.9) 12.2 17.8
Other 25.4 6.6 18.8 1.6 0.6 40.4 13.3 27.1 1.2 0.5
Total net revenues 1,610.9 1,134.6 476.3 100.0 100.0 3,265.3 2,705.7 559.6 100.0 100.0
Product and distribution costs 513.5 387.7 125.8 31.9 34.2 1,033.9 876.2 157.7 31.7 32.4
Store operating expenses 620.2 562.8 57.4 38.5 49.6 1,248.6 1,169.9 78.7 38.2 43.2
Other operating expenses 29.3 31.8 (2.5) 1.8 2.8 63.6 67.7 (4.1) 1.9 2.5
Depreciation and amortization expenses 143.4 130.0 13.4 8.9 11.5 283.4 256.7 26.7 8.7 9.5
General and administrative expenses 79.8 63.7 16.1 5.0 5.6 162.5 130.9 31.6 5.0 4.8
Restructuring and impairments — (1.2) 1.2 — (0.1) — (0.4) 0.4 — —
Total operating expenses 1,386.2 1,174.8 211.4 86.1 103.5 2,792.0 2,501.0 291.0 85.5 92.4
Income from equity investees 26.8 24.8 2.0 1.7 2.2 53.0 55.8 (2.8) 1.6 2.1
Operating income/(loss) $ 251.5 $ (15.4) $ 266.9 15.6 % (1.4) % $ 526.3 $ 260.5 $ 265.8 16.1 % 9.6 %
Store operating expenses as a % of company-operated store revenues 44.8 % 62.4 % 44.2 % 52.9 %

For the quarter ended April 3, 2022 compared with the quarter ended March 28, 2021 ~~compared with the quarter ended March 29, 2020~~

Revenues

International total net revenues for the second quarter of fiscal ~~2021~~2022 increased ~~$476~~$65 million, or ~~42%~~4%, primarily due to 751 net new Starbucks company-operated store openings, or an 11% increase over the past 12 months ($104 million). Additionally, there were higher product sales to and royalty revenues from our licensees ($89 million), primarily due to continuing improvement of our licensees from the COVID-19 pandemic. Also contributing to the increase was the conversion of our Korea market from a ~~35% increase~~joint venture to a fully licensed market in the fourth quarter of fiscal 2021 ($40 million). These increases were partially offset by an 8% decline in comparable store sales ($~~322~~108 million), driven by a ~~26% increase~~5% decrease in ~~transactions~~average ticket and a ~~7% increase~~3% decrease in ~~average ticket. Also contributing were favorable~~customer transactions, primarily attributable to COVID-19 related restrictions in China and lapping the prior-year VAT benefit as well as unfavorable foreign currency translation ($8653 million).

Operating Margin

International operating income for the second quarter of fiscal 2022 decreased 30% to $181 million, compared to $258 million in the second quarter of fiscal 2021. Operating margin decreased 520 basis points to 10.6%, primarily due to strategic initiatives, largely in China (approximately 180 basis points), an increase in product and ~~699~~distribution costs from a sales mix shift (approximately 160 basis points), investments and growth in retail store partner wages and benefits (approximately 130 basis points), lower temporary government subsidies (approximately 90 basis points) and increased supply chain costs due to inflationary pressures (approximately 50 basis points). These decreases were partially offset by lower amortization expenses (approximately 80 basis points).

Table of Contents

For the two quarters ended April 3, 2022 compared with the two quarters ended March 28, 2021

Revenues

International total net revenues for the first two quarters of fiscal 2022 increased $259 million, or 8%, primarily due to 751 net new Starbucks® company-operated stores, or an 11% increase over the past 12 months ($79217 million). ~~These~~Additionally, there were ~~partially offset by lower~~higher product ~~and equipment~~ sales to and royalty revenues from our licensees ($32166 million), primarily due to ~~the impact~~continuing improvement of our licensees from the COVID-19 pandemic.

~~Operating Margin~~

~~International operating income for~~ Also contributing to the ~~second~~increase was the conversion of our Korea market from a joint venture to a fully licensed market in the fourth quarter of fiscal 2021 ~~was $252 million, compared to the operating loss of $15 million in the second quarter of fiscal 2020. Operating margin increased 1,700 basis points to 15.6%, primarily due to sales leverage driven~~($79 million). These increases were partially offset by ~~lapping the severe impact of the COVID-19 pandemic in the prior year, as well as temporary government subsidies (approximately 270 basis points).~~

~~For the two quarters ended March 28, 2021 compared with the two quarters ended March 29, 2020~~

~~Revenues~~

~~International total net revenues for the first two quarters of fiscal 2021 increased $560 million, or 21%, primarily due to~~ a ~~13% increase~~6% decline in comparable store sales ($~~285~~151 million), driven by ~~an 8% increase~~a 5% decrease in average ticket primarily attributable to COVID-19 related restrictions in China and ~~a 4% increase~~lapping the prior-year VAT benefit in ~~transactions. Also contributing were 699 net new Starbucks~~® ~~company-operated stores, or an 11% increase, over the past 12 months~~

~~Table of Contents~~

~~($180 million) and favorable~~China as well as unfavorable foreign currency translation ($~~164~~70 million). ~~These were partially offset by lower product and equipment sales to and royalty revenues from our licensees ($93 million), primarily due to the impact of the COVID-19 pandemic.~~

Operating Margin

International operating income for the first two quarters of fiscal ~~2021 was $526~~2022 decreased 11% to $480 million, compared to ~~$261~~$541 million for the same period in fiscal ~~2020.~~2021. Operating margin ~~increased 650~~decreased 290 basis points to ~~16.1%~~13.4%, primarily due to strategic initiatives, largely in China (approximately 140 basis points), investments and growth in retail store partner wages and benefits (approximately 130 basis points), an increase in product and distribution costs from a sales ~~leverage driven by lapping the severe impact of the COVID-19 pandemic in the prior year, as well as temporary government subsidies~~mix shift (approximately 120 basis points) and increased supply chain costs due to inflationary pressures (approximately 50 basis points). These decreases were partially offset by lower amortization expenses (approximately 80 basis points).

Channel Development


		Quarter Ended										Two Quarters Ended											Quarter Ended										Two Quarters Ended
		Mar 28, 2021		Mar 29, 2020		$ Change		Mar 28, 2021		Mar 29, 2020		Mar 28, 2021		Mar 29, 2020		$ Change		Mar 28, 2021		Mar 29, 2020			Apr 3, 2022		Mar 28, 2021		$ Change		Apr 3, 2022		Mar 28, 2021		Apr 3, 2022		Mar 28, 2021		$ Change		Apr 3, 2022		Mar 28, 2021
								As a % of Channel Development Total Net Revenues										As a % of Channel Development Total Net Revenues											As a % of Channel Development Total Net Revenues										As a % of Channel Development Total Net Revenues
Net revenues	Net revenues	$	369.9	$	519.1	$	(149.2)					$	741.2	$	1,013.7	$	(272.5)					Net revenues	$	463.1	$	369.9	$	93.2					$	880.1	$	741.2	$	138.9
Product and distribution costs	Product and distribution costs	231.9		351.6		(119.7)		62.7	%	67.7	%	465.4		690.4		(225.0)		62.8	%	68.1	%	Product and distribution costs	300.5		231.9		68.6		64.9	%	62.7	%	559.3		465.4		93.9		63.5	%	62.8	%
Other operating expenses	Other operating expenses	13.1		17.7		(4.6)		3.5		3.4		24.1		38.3		(14.2)		3.3		3.8		Other operating expenses	10.7		13.1		(2.4)		2.3		3.5		22.0		24.1		(2.1)		2.5		3.3
Depreciation and amortization expenses	Depreciation and amortization expenses	0.3		0.3		—		0.1		0.1		0.6		0.6		—		0.1		0.1		Depreciation and amortization expenses	—		0.3		(0.3)		—		0.1		—		0.6		(0.6)		—		0.1
General and administrative expenses	General and administrative expenses	2.3		3.0		(0.7)		0.6		0.6		4.5		5.4		(0.9)		0.6		0.5		General and administrative expenses	2.5		2.3		0.2		0.5		0.6		5.8		4.5		1.3		0.7		0.6
Total operating expenses	Total operating expenses	247.6		372.6		(125.0)		66.9		71.8		494.6		734.7		(240.1)		66.7		72.5		Total operating expenses	313.7		247.6		66.1		67.7		66.9		587.1		494.6		92.5		66.7		66.7
Income from equity investees	Income from equity investees	50.3		43.1		7.2		13.6		8.3		106.7		86.1		20.6		14.4		8.5		Income from equity investees	48.5		50.3		(1.8)		10.5		13.6		88.1		106.7		(18.6)		10.0		14.4
Operating income	Operating income	$	172.6	$	189.6	$	(17.0)	46.7	%	36.5	%	$	353.3	$	365.1	$	(11.8)	47.7	%	36.0	%	Operating income	$	197.9	$	172.6	$	25.3	42.7	%	46.7	%	$	381.1	$	353.3	$	27.8	43.3	%	47.7	%

For the quarter ended April 3, 2022 compared with the quarter ended March 28, 2021 ~~compared with the quarter ended March 29, 2020~~

Revenues

Channel Development total net revenues for the second quarter of fiscal ~~2021 decreased $149~~2022 increased $93 million, or ~~29%~~25%, primarily due to ~~the transition of certain single-serve product activities to Nestlé ($106 million), lapping of additional~~higher Global Coffee Alliance product sales ~~to Nestlé to transition Foodservice order fulfillment~~and royalty revenue ($3977 million)~~. These were partially offset by~~ and volume growth in our ready-to-drink ~~business. We expect the impacts from the transition to be substantially completed by the end of fiscal 2021.~~businesses ($18 million).

Operating Margin

Channel Development operating income for the second quarter of fiscal ~~2021 decreased 9%~~2022 increased 15% to ~~$173~~$198 million, compared to ~~$190~~$173 million in the second quarter of fiscal ~~2020.~~2021. Operating margin ~~increased 1,020~~decreased 400 basis points to ~~46.7%~~42.7%, primarily due to ~~the transfer of certain single-serve products to Nestlé as part of~~business mix shift driven by growth in the Global Coffee Alliance (approximately 480 basis points) and lapping Global Coffee Alliance transition-related activities (approximately 210 basis points). Strong performance from our North American Coffee Partnership joint venture also contributed.Alliance.

For the two quarters ended April 3, 2022 compared with the two quarters ended March 28, 2021 ~~compared with the two quarters ended March 29, 2020~~

Table of Contents

Revenues

Channel Development total net revenues for the first two quarters of fiscal ~~2021 decreased $273~~2022 increased $139 million, or ~~27%~~19%, primarily due to ~~the transition of certain single-serve product activities to Nestlé ($197 million) and the lapping of~~ higher ~~transition activities related to the~~ Global Coffee Alliance product sales and royalty revenue ($73107 million)~~. Also contributing were lower Global Coffee Alliance revenues ($27 million), mainly driven by the Foodservice business, which experienced softening due to COVID-19. These were partially offset by~~ and volume growth in our ready-to-drink ~~business.~~

~~Table of Contents~~

businesses ($34 million).

Operating Margin

Channel Development operating income for the first two quarters of fiscal ~~2021 decreased 3%~~2022 increased 8% to ~~$353~~$381 million, compared to ~~$365~~$353 million for the same period in fiscal ~~2020.~~2021. Operating margin ~~increased 1,170~~decreased 440 basis points to ~~47.7%~~43.3%, primarily due to the transfer of certain single-serve products to Nestlé as part of the Global Coffee Alliance (approximately 650 basis points) and lapping Global Coffee Alliance transition-related activities (approximately 100 basis points). Strong performance froma decline in our North American Coffee Partnership joint venture ~~also contributed.~~income due to supply chain constraints and inflationary pressures as well as a business mix shift.

Corporate and Other(1)


	Quarter Ended								Two Quarters Ended
	Apr 3, 2022		Mar 28, 2021		$ Change		% Change		Apr 3, 2022		Mar 28, 2021		$ Change		% Change
Net revenues:


Other	$	24.4	$	22.6	$	1.8	8.0	%	$	49.5	$	43.1	$	6.4	14.8	%
Total net revenues	24.4		22.6		1.8		8.0		49.5		43.1		6.4		14.8
Product and distribution costs	20.8		19.4		1.4		7.2		43.6		38.4		5.2		13.5

Other operating expenses	4.4		3.4		1.0		29.4		7.4		7.1		0.3		4.2
Depreciation and amortization expenses	32.3		37.0		(4.7)		(12.7)		65.2		73.7		(8.5)		(11.5)
General and administrative expenses	328.1		302.3		25.8		8.5		682.6		616.3		66.3		10.8

Total operating expenses	385.6		362.1		23.5		6.5		798.8		735.5		63.3		8.6

Operating loss	$	(361.2)	$	(339.5)	$	(21.7)	6.4	%	$	(749.3)	$	(692.4)	$	(56.9)	8.2	%

Quarter Ended Two Quarters Ended
Mar 28,
2021 Mar 29,
2020
$
Change
%
Change
Mar 28,
2021 Mar 29,
2020
$
Change
%
Change
Net revenues:
Other $ 22.6 $ 12.0 $ 10.6 88.3 % $ 43.1 $ 32.5 $ 10.6 32.6 %
Total net revenues 22.6 12.0 10.6 88.3 43.1 32.5 10.6 32.6
Product and distribution costs 19.4 10.2 9.2 90.2 38.4 31.0 7.4 23.9
Other operating expenses 3.4 3.7 (0.3) (8.1) 7.1 6.4 0.7 10.9
Depreciation and amortization expenses 37.0 34.5 2.5 7.2 73.7 69.4 4.3 6.2
General and administrative expenses 304.6 271.6 33.0 12.2 621.0 563.8 57.2 10.1
Restructuring and impairments — — — nm — 0.3 (0.3) nm
Total operating expenses 364.4 320.0 44.4 13.9 740.2 670.9 69.3 10.3
Operating loss $ (341.8) $ (308.0) $ (33.8) 11.0 % $ (697.1) $ (638.4) $ (58.7) 9.2 %
(1)Corporate and other general and administrative expenses, total operating expenses and operating loss for the quarter and two quartersended March 28, 2021, have been restated to conform with current period presentation.

Corporate and Other primarily consists of our unallocated corporate expenses, as well as Evolution Fresh. Unallocated corporate expenses include corporate administrative functions that support the operating segments but are not specifically attributable to or managed by any segment and are not included in the reported financial results of the operating segments.

For the quarter ended ~~March 28, 2021~~April 3, 2022 compared with the quarter ended March ~~29, 2020~~28, 2021

Corporate and Other operating loss increased to ~~$342~~$361 million for the second quarter of fiscal ~~2021,~~2022, or ~~11%~~6%, compared to ~~$308~~$340 million for the second quarter of fiscal ~~2020.~~2021. This increase was primarily driven by incremental ~~strategic~~ investments in technology ($22 million), increased partner wages and ~~higher~~benefits ($12 million) and increased support costs to address labor market conditions ($10 million). These increases were partially offset by lower performance-based compensation ~~recognizing~~($26 million).

For the ~~better than expected business recovery.~~

~~For~~two quarters ended April 3, 2022 compared with the two quarters ended March 28, 2021 ~~compared with the two quarters ended March 29, 2020~~

Corporate and Other operating loss increased to ~~$697~~$749 million for the first two quarters of fiscal ~~2021,~~2022, or 9%8%, compared to ~~$638~~$692 million for the same period in fiscal ~~2020.~~2021. This increase was primarily driven by incremental ~~strategic~~ investments in technology ($45 million), increased partner wages and ~~higher~~benefits ($21 million) and increased support costs to address labor market conditions ($11 million). These increases were partially offset by lower performance-based compensation~~, recognizing the better than expected business recovery.~~ ($24 million).

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Quarterly Store Data

Our store data for the periods presented is as follows:

Net stores opened/(closed) and transferred during the period
Quarter Ended Two Quarters Ended Stores open as of
Mar 28,
2021 Mar 29,
2020 Mar 28,
2021 Mar 29,
2020 Mar 28,
2021 Mar 29,
2020
Americas
Company-operated stores (209) 31 (289) 77 9,820 10,051
Licensed stores 21 37 55 127 8,300 8,220
Total Americas (188) 68 (234) 204 18,120 18,271
International
Company-operated stores 123 78 308 277 6,836 6,137
Licensed stores 70 109 209 313 7,987 7,642
Total International 193 187 517 590 14,823 13,779
Total Company 5 255 283 794 32,943 32,050


	Net stores opened/(closed) and transferred during the period
	Quarter Ended		Two Quarters Ended		Stores open as of
	Apr 3, 2022	Mar 28, 2021	Apr 3, 2022	Mar 28, 2021	Apr 3, 2022	Mar 28, 2021
North America
Company-operated stores	54	(209)	93	(289)	9,954	9,820
Licensed stores	(16)	20	7	50	6,972	6,881
Total North America (1)	38	(189)	100	(239)	16,926	16,701
International
Company-operated stores	102	123	315	308	7,587	6,836
Licensed stores	173	71	382	214	10,117	9,406
Total International (1)	275	194	697	522	17,704	16,242




Total Company	313	5	797	283	34,630	32,943

(1)North America and International licensed stores as of March 28, 2021, have been recast as a result of our fiscal 2021 operating segment reporting structure realignment.

Financial Condition, Liquidity and Capital Resources

Investment Overview

Our cash and investments totaled $4.3 billion as of ~~March 28, 2021~~April 3, 2022 and ~~$4.8~~$6.9 billion as of ~~September 27, 2020.~~October 3, 2021. We actively manage our cash and investments in order to internally fund operating needs, make scheduled interest and principal payments on our borrowings, make acquisitions and return cash to shareholders through common stock cash dividend payments and share repurchases. Our investment portfolio primarily includes highly liquid available-for-sale securities, including corporate debt securities and government treasury securities (foreign and domestic) ~~and commercial paper.~~. As of ~~March 28, 2021,~~April 3, 2022, approximately ~~$2.3~~$2.9 billion of cash was held in foreign subsidiaries.

Borrowing Capacity

~~The 2018 credit facility~~Revolving Credit Facility

Our ~~$2.0~~$3 billion unsecured ~~5-year~~five-year revolving credit facility ~~("the 2018~~(the "2021 credit facility"), of which $150 million may be used for issuances of letters of credit, is currently set to mature on ~~October 25, 2022.~~September 16, 2026. The 2021 credit facility is available for working capital, capital expenditures and other 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 ~~$500 million.~~ $1.0 billion.

Borrowings under the 2021 credit facility ~~are subject to terms defined within the 2018 credit facility and~~ will bear interest at a variable rate based on LIBOR, and, for U.S. dollar-denominated loans under certain circumstances, a Base Rate (as defined in the 2021 credit facility), in each case plus an applicable margin. The applicable margin is based on the ~~better of (i) the Company's~~Company’s long-term credit ratings assigned by ~~Moody's~~the Moody’s and Standard & ~~Poor's~~Poor’s rating ~~agencies~~agencies. The 2021 credit facility contains alternative interest rate provisions specifying rate calculations to be used at such time LIBOR ceases to be available as a benchmark due to reference rate reform. The “Base Rate” is the highest of (i) the Federal Funds Rate (as defined in the 2021 credit facility) plus 0.050%, (ii) Bank of America’s prime rate and ~~(ii)~~(iii) the ~~Company's~~Eurocurrency Rate (as defined in the 2021 credit facility) plus 1.000%.

The 2021 credit facility contains provisions requiring us to maintain compliance with certain covenants, including a minimum fixed charge coverage ratio, ~~pursuant~~which measures our ability to a pricing grid set forth in the five-year credit agreement. The current applicable margin is 1.100% for Eurocurrency Rate Loans and 0.100% for Base Rate Loans. The 2018 credit facility is available for general corporate purposes.cover financing expenses. As of ~~March 28, 2021,~~April 3, 2022, we ~~had no borrowings under the 2018 credit facility.~~

~~The 364-day credit facility~~

Our $1.0 billion unsecured 364-day credit facility (the "364-day credit facility"), of which no amount may be used for issuances of letters of credit, is currently set to mature on September 22, 2021. We have the option, subject to negotiation and agreement with the related banks, to increase the maximum commitment amount by an additional $500 million. Borrowings under the credit facility are subject to terms defined within the 364-day credit facility and will bear interest at a variable rate based on LIBOR, and, for U.S. dollar-denominated loans under certain circumstances, a Base Rate, in each case plus an applicable margin. The applicable margin is based on the better of (i) the Company's long-term credit ratings assigned by Moody's and Standard & Poor's rating agencies and (ii) the Company's fixed charge coverage ratio, pursuant to a pricing grid set forth in the 364-day credit agreement. The applicable margin is 1.150% for Eurocurrency Rate Loans and 0.150% for Base Rate Loans. The 364-day credit facility is available for general purposes. As of March 28, 2021, we had no borrowings under the 364-day credit facility.

Due to the financial impacts from COVID-19, we reached an agreement with our lenders to amend the fixed charge coverage ratio covenant for our combined $3 billion revolving lines of credit, through the fourth quarter of fiscal 2021. Given the

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~~recovery in our cash flows, we are currently~~were in compliance with ~~the covenant prior to the amendment and expect~~all applicable covenants. No amounts were outstanding under our ~~continued compliance upon the amendment expiration at the end~~2021 credit facility as of ~~fiscal~~April 3, 2022 or October 3, 2021.

Commercial Paper

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 the ~~2018 and 364-day~~2021 credit ~~facilities~~facility discussed above. The proceeds from borrowings under our commercial paper program may be used for

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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. As of ~~March 28,~~April 3, 2022 and October 3, 2021, we had no borrowings outstanding under our commercial paper program. ~~As such, our~~Our total contractual borrowing capacity for general corporate purposes was $3 billion as of the end of our second quarter of fiscal ~~2021 was $6.0 billion when combining the unused commercial paper program and credit facilities, less outstanding borrowing.~~2022.

Credit facilities in Japan

Additionally, we hold Japanese yen-denominated credit facilities for the use of our Japan subsidiary. These are available for working capital needs and capital expenditures within our Japanese market.

As of ~~March 28,~~April 3, 2022 and October 3, 2021, we had ~~$18.3 million of~~no borrowings outstanding under these Japanese yen-denominated credit facilities.

See Note 7, Debt, to the consolidated financial statements included in Item 1 of Part I of this 10-Q for details of the components of our long-term debt.

Our ability to incur new liens and conduct sale and leaseback transactions on certain material properties is subject to compliance with terms of the indentures under which the ~~Senior Notes~~long-term notes were issued. As of ~~March 28, 2021,~~April 3, 2022, we were in compliance with all applicable covenants.

Use of Cash

We expect to use our available cash and investments, including, but not limited to, additional potential future borrowings under the credit facilities, commercial paper program and the issuance of debt to support and invest in our core businesses, including investing in new ways to serve our customers and supporting our store partners, repaying maturing debts, as well as returning cash to shareholders through common stock cash dividend payments and discretionary share repurchases and investing in new business opportunities related to our core and developing businesses. ~~Further,~~Furthermore, we may use our available cash resources to make proportionate capital contributions to our investees. We may also seek strategic acquisitions to leverage existing capabilities and further build our ~~business in support of our “Growth at Scale” agenda.~~business. Acquisitions may include increasing our ownership interests in our investees. Any decisions to increase such ownership interests will be driven by valuation and fit with our ownership strategy.

We believe that net future cash flows generated from operations and existing cash and investments both domestically and internationally combined with our ability to leverage our balance sheet through the issuance of debt will be sufficient to finance capital requirements for our core businesses as well as shareholder distributions for at least the ~~foreseeable future. Significant new joint ventures, acquisitions and/~~next 12 months. We are currently not aware of any trends or ~~other new business opportunities may require additional outside funding.~~demands, commitments, events or uncertainties that will result in, or that are reasonably likely to result in, our liquidity increasing or decreasing in any material way that will impact our capital needs during or beyond the next 12 months. We have borrowed funds and continue to believe we have the ability to do so at reasonable interest rates; however, additional borrowings would result in increased interest expense in the future. In this regard, we may incur additional debt, within targeted levels, as part of our plans to fund our capital programs, including cash returns to shareholders through future dividends and discretionary share ~~repurchases. To further strengthen our liquidity~~repurchases as well as investing in ~~the near term,~~new business opportunities. If necessary, we ~~currently expect the suspension~~may pursue additional sources of ~~share repurchases to continue into late fiscal 2021.~~financing, including both short-term and long-term borrowings and debt issuances.

We regularly review our cash positions and our determination of indefinite reinvestment of foreign earnings. In the event we determine that all or a portion of such foreign earnings are no longer indefinitely reinvested, we may be subject to additional foreign withholding taxes and U.S. state income taxes, which could be material. We do not anticipate the need for repatriated funds to the U.S. to satisfy domestic liquidity needs.

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During the first quarter of fiscal 2022, we resumed our share repurchase program which was temporarily suspended in March 2020. During the ~~date~~two quarters ended April 3, 2022, we repurchased 36.3 million shares of ~~this report,~~common stock for $4.0 billion. On March 15, 2022, we ~~do not expect~~announced that our Board of Directors authorized the repurchase of up to ~~reduce~~an additional 40 million shares under our ~~quarterly dividend as a result of the COVID-19 pandemic.~~

ongoing share repurchase program. On April ~~8, 2020,~~4, 2022, we announced a temporary suspension of our share repurchase ~~program.~~program to allow us to augment investments in our stores and partners. Repurchases pursuant to this program were last made ~~in mid-March 2020.~~on April 1, 2022. As of ~~March 28, 2021, 48.9~~April 3, 2022, 52.6 million shares remained available for repurchase under current authorizations. ~~The existing share repurchase program remains authorized by the Board~~

Table of ~~Directors, however, we have temporarily suspended our share repurchase program until we restore certain financial leverage targets, which we currently expect to occur in late fiscal 2021.~~Contents

Other than normal operating expenses, cash requirements for the remainder of fiscal ~~2021~~2022 are expected to consist primarily of capital expenditures for investments in our new and existing stores, ~~and~~ our supply chain and corporate ~~facilities.~~facilities as well as repayment of debt maturities due later this fiscal year. Total capital expenditures for fiscal ~~2021~~2022 are expected to be approximately ~~$1.9~~$2 billion.

~~Cash Flows~~

~~Cash provided by operating activities was $2.7 billion for~~In the ~~first two quarters of fiscal 2021, compared to $0.5 billion for the same period in fiscal 2020. The increase was primarily due to the timing of tax payments and refunds.~~

Cash used in investing activities for the first two quarters of fiscal 2021 totaled $0.6 billion, compared to cash used in investing activities of $0.7 billion for the same period in fiscal 2020. The change was primarily due to an increase in purchase of investments, partially offset by higher maturities and calls of investments and decrease in spend on capital expenditures.

Cash used in financing activities for the first two quarters of fiscal 2021 totaled $2.7 billion compared to cash provided by financing activities of $0.2 billion for the same period in fiscal 2020. The change was primarily due to increased debt repayments and lower net proceeds from new debt issuances, partially offset by the temporary suspension of our share repurchase program.

~~Contractual Obligations~~

~~In Management’s Discussion and Analysis of Financial Condition and Results of Operations~~MD&A included in the 10-K, we disclosed that we had ~~$35.4~~$33.7 billion ~~in total contractual obligations~~of current and long-term material cash requirements as of ~~September 27, 2020.~~October 3, 2021. There have been no material changes to our ~~total obligations~~material cash requirements during the period covered by this 10-Q outside of the normal course of our business.

Cash Flows

~~Off-Balance Sheet Arrangements~~Cash provided by operating activities was $2.0 billion for the first two quarters of fiscal 2022, compared to $2.7 billion for the same period in fiscal 2021. The change was primarily due to net cash used by changes in operating assets and liabilities, partially offset by higher net earnings.

~~There has been no material~~Cash used in investing activities for the first two quarters of fiscal 2022 totaled $881 million, compared to cash used in investing activities of $579 million for the same period in fiscal 2021. The change was primarily due to an increase in spend on capital expenditures.

Cash used in financing activities for the first two quarters of fiscal 2022 totaled $3.7 billion compared to cash used by financing activities of $2.7 billion for the same period in fiscal 2021. The increase was primarily due to resuming our ~~off-balance sheet arrangements discussed in Management’s Discussion and Analysis~~share repurchase program, partially offset by net proceeds from issuance of ~~Financial Condition and Results of Operations included in the 10-K.~~long-term debt.

Commodity Prices, Availability and General Risk Conditions

Commodity price risk represents our primary market risk, generated by our purchases of green coffee and dairy products, among other items. We purchase, roast and sell high-quality arabica coffee and related products and risk arises from the price volatility of green coffee. In addition to coffee, we also purchase significant amounts of dairy products to support the needs of our company-operated stores. The price and availability of these commodities directly impact our results of operations, and we expect commodity prices, particularly coffee, to impact future results of operations. For additional details, see Product Supply in Item 1 of the 10-K, as well as Risk Factors in Item 1A of the 10-K.

Seasonality and Quarterly Results

Our business is subject to moderate seasonal fluctuations, of which our fiscal second quarter typically experiences lower revenues and operating income. However, the COVID-19 ~~outbreak~~pandemic may have an impact on consumer behaviors and customer traffic that result in changes in the seasonal fluctuations of our business. Additionally, as our stored value 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. However, since revenues from our stored value cards are recognized upon redemption and not when cash is loaded, the impact of seasonal fluctuations on the consolidated statements of earnings is much less pronounced. As a result of moderate seasonal fluctuations, results for any quarter are not necessarily indicative of the results that may be achieved for the full fiscal year.

RECENT ACCOUNTING PRONOUNCEMENTS

See Note 1, Summary of Significant Accounting Policies and Estimates, to the consolidated financial statements included in Item 1 of Part I of this 10-Q, for a detailed description of recent accounting pronouncements.

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Item 3.Quantitative and Qualitative Disclosures About Market Risk

There has been no material change in the commodity price risk, foreign currency exchange risk, equity security price risk or interest rate risk discussed in Item 7A of the 10-K.

Item 4. Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that material information required to be disclosed in our periodic reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Our disclosure controls and procedures are also designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer as appropriate, to allow timely decisions regarding required disclosure.

During the second quarter of fiscal ~~2021,~~2022, we carried out an evaluation, under the supervision and with the participation of our management, including our interim chief executive officer and our chief financial officer, of the effectiveness of the design and operation of the disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act.

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Based upon that evaluation, our interim chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective, as of the end of the period covered by this report ~~(March 28, 2021)~~(April 3, 2022).

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during our most recently completed fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

~~The certifications required by Section 302 of the Sarbanes-Oxley Act of 2002 are filed as exhibits~~ ~~31.1~~ ~~and~~ ~~31.2~~ ~~to this 10-Q.~~

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PART II — OTHER INFORMATION

Item 1.Legal Proceedings

See Note 1413, Commitments and Contingencies, to the consolidated financial statements included in Item 1 of Part I of this 10-Q for information regarding certain legal proceedings in which we are involved.

Item 1A.Risk Factors

In addition to the other information set forth in this 10-Q, you should carefully consider the risks and uncertainties discussed in Part I, Item 1A. Risk Factors in our 10-K and Part II, Item 1A. Risk Factors in our first quarter 2022 Form 10-Q, which could materially adversely affect our business, financial condition, or future results. There have been no material changes to the risk factors ~~previously~~ disclosed ~~in the 10-K.~~our 10-K and our first quarter 2022 Form 10-Q.

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

Information regarding repurchases of our common stock during the quarter ended April 3, 2022:


	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(2)	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs(3)
Period (1)
January 3, 2022 - January 30, 2022	1,650,000	$	102.83	1,650,000	16,129,441
January 31, 2022 - February 27, 2022	1,432,263	94.55		1,432,263	14,697,178
February 28, 2022 - April 3, 2022	2,125,000	88.02		2,125,000	52,572,178
Total	5,207,263	$	94.51	5,207,263

(1)Monthly information is presented by reference to our fiscal months during the second quarter of fiscal 2022.

(2)Share repurchases are conducted under our ongoing share repurchase program announced in September 2001, which has no expiration date. On March 15, 2022, our Board of Directors authorized the repurchase of up to an additional 40 million shares under our ongoing share repurchase program. On April 4, 2022, we announced a temporary suspension of our share repurchase program. Repurchases pursuant to this program were last made on April 1, 2022.

(3)This column includes the total number of shares available for repurchase under our ongoing share repurchase program. Shares under our ongoing share repurchase program may be repurchased in open market transactions, including pursuant to a trading plan adopted in accordance with Rule 10b5-1 of the Exchange Act, or through privately negotiated transactions. The timing, manner, price and amount of repurchases will be determined at our discretion and the share repurchase program may be suspended, terminated or modified at any time for any reason. ~~On April 8, 2020, we announced a temporary suspension of our share repurchase program. During the second fiscal quarter ended March 28, 2021, there was no share repurchase activity.~~

Item 3.Defaults upon Senior Securities

None.

Item 4.Mine Safety Disclosures

Not applicable.

Item 5.Other Information

None.

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Item 6.Exhibits

Incorporated by Reference
Exhibit
No.
Exhibit Description Form File No.
Date of
Filing
Exhibit Number
Filed
Herewith
3.1
Restated Articles of Incorporation of Starbucks Corporation
10-Q 0-20322 04/28/2015 3.1
3.2
Amended and Restated Bylaws of Starbucks Corporation (As amended and restated through March 17, 2021 )
8-K 0-20322 03/19/2021 3.1
10.1*
Letter Agreement dated January 27, 2021 between Starbucks Corporation and Patrick Grismer
— — — — X
31.1
Certification of Principal Executive Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
— — — — X
31.2
Certification of Principal Financial Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
— — — — X
32**
Certifications of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
— — — — —
101 The following financial statements from the Company's 10-Q for the fiscal quarter ended March 28, 2021, formatted in iXBRL: (i) Consolidated Statements of Earnings, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Cash Flows, (v) Consolidated Statements of Equity and (vi) Notes to Consolidated Financial Statements — — — — X
104 Cover Page Interactive Data File (formatted in iXBRL and contained in Exhibit 101) — — — — X


		Incorporated by Reference
Exhibit No.	Exhibit Description	Form	File No.	Date of Filing	Exhibit Number	Filed Herewith
3.1	Restated Articles of Incorporation of Starbucks Corporation	10-Q	000-20322	04/28/2015	3.1
3.2	Amended and Restated Bylaws of Starbucks Corporation (As amended and restated through March 17, 2021)	8-K	000-20322	03/19/2021	3.1
4.1	Eighth Supplemental Indenture, dated as of February 14, 2022, by and between Starbucks Corporation and U.S. Bank Trust Company, National Association, as trustee and as successor in interest to U.S. Bank National Association	8-K	000-20322	02/14/2022	4.2
4.2	Form of Floating Rate Senior Notes due 2024 (included as Exhibit A to Exhibit 4.1)	8-K	000-20322	02/14/2022	4.3
4.3	Form of 3.000% Senior Notes due 2032 (included as Exhibit B to Exhibit 4.1)	8-K	000-20322	02/14/2022	4.4
1 0.1*	Amended and Restated 2005 Long-Term Equity Incentive Plan	—	—	—	—	X
10.2*	Separation Agreement dated March 30, 2022	8-K	000-20322	04/05/2022	10.1
31.1	Certification of Principal Executive Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	—	—	—	—	X
31.2	Certification of Principal Financial Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	—	—	—	—	X
32**	Certifications of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	—	—	—	—	—
101	The following financial statements from the Company's 10-Q for the fiscal quarter ended April 3, 2022, formatted in iXBRL: (i) Consolidated Statements of Earnings, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Cash Flows, (v) Consolidated Statements of Equity and (vi) Notes to Consolidated Financial Statements	—	—	—	—	X
104	Cover Page Interactive Data File (formatted in iXBRL and contained in Exhibit 101)	—	—	—	—	X

* Denotes a management contract or compensatory plan or arrangement.

** Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

~~April 27, 2021~~May 3, 2022


			STARBUCKS CORPORATION

			By:						/s/ Rachel Ruggeri
									Rachel Ruggeri
									executive vice president, chief financial officer
									Signing on behalf of the registrant and as principal financial officer


	Mar 28, 2021		Sep 27, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	3,880.7	$	4,350.9
Short-term investments	123.0		281.2
Accounts receivable, net	880.2		883.4
Inventories	1,503.6		1,551.4
Prepaid expenses and other current assets	592.0		739.5
Total current assets	6,979.5		7,806.4
Long-term investments	284.8		206.1
Equity investments	499.4		478.7
Property, plant and equipment, net	6,123.1		6,241.4
Operating lease, right-of-use asset	8,036.8		8,134.1
Deferred income taxes, net	1,770.0		1,789.9
Other long-term assets	574.9		568.6
Other intangible assets	444.3		552.1
Goodwill	3,658.9		3,597.2
TOTAL ASSETS	$	28,371.7	$	29,374.5
LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIT)
Current liabilities:
Accounts payable	$	1,033.6	$	997.9
Accrued liabilities	1,771.6		1,160.7
Accrued payroll and benefits	646.1		696.0
Income taxes payable	117.0		98.2
Current portion of operating lease liability	1,296.4		1,248.8
Stored value card liability and current portion of deferred revenue	1,622.1		1,456.5
Short-term debt	18.3		438.8
Current portion of long-term debt	0		1,249.9
Total current liabilities	6,505.1		7,346.8
Long-term debt	14,630.3		14,659.6
Operating lease liability	7,577.7		7,661.7
Deferred revenue	6,532.1		6,598.5
Other long-term liabilities	774.8		907.3
Total liabilities	36,020.0		37,173.9
Shareholders' deficit:
Common stock ($0.001 par value) — authorized, 2,400.0 shares; issued and outstanding, 1,177.9 and 1,173.3 shares, respectively	1.2		1.2
Additional paid-in capital	595.4		373.9
Retained deficit	(8,124.3)		(7,815.6)
Accumulated other comprehensive loss	(126.3)		(364.6)
Total shareholders’ deficit	(7,654.0)		(7,805.1)
Noncontrolling interests	5.7		5.7
Total deficit	(7,648.3)		(7,799.4)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIT)	$	28,371.7	$	29,374.5


			Fair Value Measurements at Reporting Date Using
	Balance at March 28, 2021		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash and cash equivalents	$	3,880.7	$	3,880.7	$	0	$	0
Short-term investments:
Available-for-sale debt securities


Commercial paper	38.5		0		38.5		0
Corporate debt securities	14.0		0		14.0		0


State and local government obligations	1.0		0		1.0		0

Total available-for-sale debt securities	53.5		0		53.5		0
Marketable equity securities	69.5		69.5		0		0
Total short-term investments	123.0		69.5		53.5		0
Prepaid expenses and other current assets:
Derivative assets	22.0		13.2		8.8		0
Long-term investments:
Available-for-sale debt securities

Auction rate securities	5.7		0		0		5.7

Corporate debt securities	167.4		0		167.4		0
Foreign government obligations	4.0		0		4.0		0
Mortgage and other asset-backed securities	18.0		0		18.0		0
State and local government obligations	4.1		0		4.1		0
U.S. government treasury securities	85.6		85.6		0		0
Total long-term investments	284.8		85.6		193.5		5.7
Other long-term assets:
Derivative assets	96.1		0		96.1		0
Total assets	$	4,406.6	$	4,049.0	$	351.9	$	5.7
Liabilities:
Accrued liabilities:
Derivative liabilities	$	13.3	$	0.2	$	13.1	$	0
Other long-term liabilities:
Derivative liabilities	13.6		0		13.6		0
Total liabilities	$	26.9	$	0.2	$	26.7	$	0


Fiscal Year	Total

2021	$	0
2022	1,000.0
2023	1,000.0
2024	1,528.5
2025	1,250.0
Thereafter	9,950.0
Total	$	14,728.5


	Stock Options		RSUs
Options outstanding/Nonvested RSUs, September 27, 2020	9.2		8.3
Granted	0		3.9
Options exercised/RSUs vested	(2.2)		(3.0)
Forfeited/expired	(0.1)		(0.8)
Options outstanding/Nonvested RSUs, March 28, 2021	6.9		8.4
Total unrecognized stock-based compensation expense, net of estimated forfeitures, as of March 28, 2021	$	0.3	$	253.8


	Quarter Ended Mar 28, 2021			Two Quarters Ended Mar 28, 2021
	Change in Comparable Store Sales	Change in Transactions	Change in Ticket	Change in Comparable Store Sales	Change in Transactions	Change in Ticket
Consolidated	15%	(4)%	19%	4%	(12)%	18%
Americas	9%	(10)%	22%	1%	(16)%	21%
International	35%	26%	7%	13%	4%	8%