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 January ~~2, 2022~~1, 2023

☐ 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: 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 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 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 January ~~26, 2022~~27, 2023
~~1,150.3~~1,149.3 million

Table of Contents

STARBUCKS CORPORATION

FORM 10-Q

For the Quarterly Period Ended January ~~2, 2022~~1, 2023

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				Quarter Ended
		Jan 2, 2022		Dec 27, 2020				Jan 1, 2023		Jan 2, 2022
Net revenues:	Net revenues:						Net revenues:
Company-operated stores	Company-operated stores	$	6,722.4	$	5,726.5		Company-operated stores	$	7,083.5	$	6,722.4
Licensed stores	Licensed stores	850.8		613.8			Licensed stores	1,119.5		850.8
Other	Other	477.2		409.1			Other	510.9		477.2
Total net revenues	Total net revenues	8,050.4		6,749.4			Total net revenues	8,713.9		8,050.4
Product and distribution costs	Product and distribution costs	2,526.9		2,049.1			Product and distribution costs	2,810.2		2,526.9
Store operating expenses	Store operating expenses	3,400.0		2,867.3			Store operating expenses	3,665.3		3,400.0
Other operating expenses	Other operating expenses	101.7		91.8			Other operating expenses	129.3		101.7
Depreciation and amortization expenses	Depreciation and amortization expenses	366.0		366.1			Depreciation and amortization expenses	327.1		366.0
General and administrative expenses	General and administrative expenses	525.8		472.1			General and administrative expenses	580.9		525.8
Restructuring and impairments	Restructuring and impairments	(7.5)		72.2			Restructuring and impairments	5.8		(7.5)
Total operating expenses	Total operating expenses	6,912.9		5,918.6			Total operating expenses	7,518.6		6,912.9
Income from equity investees	Income from equity investees	40.3		82.7			Income from equity investees	57.8		40.3
Operating income	Operating income	1,177.8		913.5			Operating income	1,253.1		1,177.8

Interest income and other, net	Interest income and other, net	(0.1)		15.5			Interest income and other, net	11.6		(0.1)
Interest expense	Interest expense	(115.3)		(120.7)			Interest expense	(129.7)		(115.3)
Earnings before income taxes	Earnings before income taxes	1,062.4		808.3			Earnings before income taxes	1,135.0		1,062.4
Income tax expense	Income tax expense	246.3		186.1			Income tax expense	279.8		246.3
Net earnings including noncontrolling interests	Net earnings including noncontrolling interests	816.1		622.2			Net earnings including noncontrolling interests	855.2		816.1
Net earnings attributable to noncontrolling interests	Net earnings attributable to noncontrolling interests	0.2		—			Net earnings attributable to noncontrolling interests	—		0.2
Net earnings attributable to Starbucks	Net earnings attributable to Starbucks	$	815.9	$	622.2		Net earnings attributable to Starbucks	$	855.2	$	815.9
Earnings per share - basic	Earnings per share - basic	$	0.70	$	0.53		Earnings per share - basic	$	0.74	$	0.70
Earnings per share - diluted	Earnings per share - diluted	$	0.69	$	0.53		Earnings per share - diluted	$	0.74	$	0.69
Weighted average shares outstanding:	Weighted average shares outstanding:						Weighted average shares outstanding:
Basic	Basic	1,169.6		1,175.0			Basic	1,148.5		1,169.6
Diluted	Diluted	1,176.6		1,183.0			Diluted	1,152.9		1,176.6

See Notes to Consolidated Financial Statements.

Table of Contents

STARBUCKS CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions, unaudited)


		Quarter Ended				Quarter Ended
		Jan 2, 2022		Dec 27, 2020				Jan 1, 2023		Jan 2, 2022
Net earnings including noncontrolling interests	Net earnings including noncontrolling interests	$	816.1	$	622.2		Net earnings including noncontrolling interests	$	855.2	$	816.1
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	(3.4)		(0.5)			Unrealized holding gains/(losses) on available-for-sale debt securities	2.0		(3.4)
Tax (expense)/benefit	Tax (expense)/benefit	0.8		0.1			Tax (expense)/benefit	(0.5)		0.8
Unrealized gains/(losses) on cash flow hedging instruments	Unrealized gains/(losses) on cash flow hedging instruments	88.7		7.7			Unrealized gains/(losses) on cash flow hedging instruments	(180.7)		88.7
Tax (expense)/benefit	Tax (expense)/benefit	(11.8)		(2.9)			Tax (expense)/benefit	29.5		(11.8)
Unrealized gains/(losses) on net investment hedging instruments	Unrealized gains/(losses) on net investment hedging instruments	41.5		(30.2)			Unrealized gains/(losses) on net investment hedging instruments	(64.6)		41.5
Tax (expense)/benefit	Tax (expense)/benefit	(10.5)		7.6			Tax (expense)/benefit	16.3		(10.5)
Translation adjustment and other	Translation adjustment and other	14.2		238.7			Translation adjustment and other	208.9		14.2
Tax (expense)/benefit	Tax (expense)/benefit	—		—			Tax (expense)/benefit	—		—
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	(16.1)		(3.6)			Reclassification adjustment for net (gains)/losses realized in net earnings for available-for-sale debt securities, hedging instruments, and translation adjustment	(98.4)		(16.1)
Tax expense/(benefit)	Tax expense/(benefit)	2.9		1.8			Tax expense/(benefit)	11.8		2.9
Other comprehensive income		106.3		218.7
Other comprehensive income/(loss)							Other comprehensive income/(loss)	(75.7)		106.3
Comprehensive income including noncontrolling interests	Comprehensive income including noncontrolling interests	922.4		840.9			Comprehensive income including noncontrolling interests	779.5		922.4
Comprehensive income attributable to noncontrolling interests	Comprehensive income attributable to noncontrolling interests	0.2		—			Comprehensive income attributable to noncontrolling interests	—		0.2
Comprehensive income attributable to Starbucks	Comprehensive income attributable to Starbucks	$	922.2	$	840.9		Comprehensive income attributable to Starbucks	$	779.5	$	922.2

See Notes to Consolidated Financial Statements.

Table of Contents

STARBUCKS CORPORATION

CONSOLIDATED BALANCE SHEETS

(in millions, except per share data)

(unaudited)


		Jan 2, 2022		Oct 3, 2021			Jan 1, 2023		Oct 2, 2022
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	3,969.4	$	6,455.7	Cash and cash equivalents	$	3,186.5	$	2,818.4
Short-term investments	Short-term investments	87.4		162.2		Short-term investments	123.9		364.5
Accounts receivable, net	Accounts receivable, net	1,031.1		940.0		Accounts receivable, net	1,162.9		1,175.5
Inventories	Inventories	1,637.1		1,603.9		Inventories	2,088.1		2,176.6
Prepaid expenses and other current assets	Prepaid expenses and other current assets	530.1		594.6		Prepaid expenses and other current assets	373.5		483.7
Total current assets	Total current assets	7,255.1		9,756.4		Total current assets	6,934.9		7,018.7
Long-term investments	Long-term investments	299.6		281.7		Long-term investments	283.6		279.1
Equity investments	Equity investments	251.9		268.5		Equity investments	330.5		311.2
Property, plant and equipment, net	Property, plant and equipment, net	6,398.0		6,369.5		Property, plant and equipment, net	6,699.5		6,560.5
Operating lease, right-of-use asset	Operating lease, right-of-use asset	8,203.4		8,236.0		Operating lease, right-of-use asset	8,133.8		8,015.6
Deferred income taxes, net	Deferred income taxes, net	1,859.7		1,874.8		Deferred income taxes, net	1,811.8		1,799.7
Other long-term assets	Other long-term assets	588.0		578.5		Other long-term assets	527.6		554.2
Other intangible assets	Other intangible assets	302.5		349.9		Other intangible assets	151.4		155.9
Goodwill	Goodwill	3,675.7		3,677.3		Goodwill	3,383.0		3,283.5
TOTAL ASSETS	TOTAL ASSETS	$	28,833.9	$	31,392.6	TOTAL ASSETS	$	28,256.1	$	27,978.4
LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIT)	LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIT)					LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIT)
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	1,289.4	$	1,211.6	Accounts payable	$	1,348.2	$	1,441.4
Accrued liabilities	Accrued liabilities	2,444.3		2,321.2		Accrued liabilities	2,089.6		2,137.1
Accrued payroll and benefits	Accrued payroll and benefits	664.1		772.3		Accrued payroll and benefits	664.6		761.7

Current portion of operating lease liability	Current portion of operating lease liability	1,253.3		1,251.3		Current portion of operating lease liability	1,257.5		1,245.7
Stored value card liability and current portion of deferred revenue	Stored value card liability and current portion of deferred revenue	2,070.7		1,596.1		Stored value card liability and current portion of deferred revenue	2,137.0		1,641.9
Short-term debt	Short-term debt	200.0		—		Short-term debt	—		175.0
Current portion of long-term debt	Current portion of long-term debt	999.3		998.9		Current portion of long-term debt	1,749.3		1,749.0
Total current liabilities	Total current liabilities	8,921.1		8,151.4		Total current liabilities	9,246.2		9,151.8
Long-term debt	Long-term debt	13,586.3		13,616.9		Long-term debt	13,176.7		13,119.9
Operating lease liability	Operating lease liability	7,708.0		7,738.0		Operating lease liability	7,635.4		7,515.2
Deferred revenue	Deferred revenue	6,447.7		6,463.0		Deferred revenue	6,263.2		6,279.7
Other long-term liabilities	Other long-term liabilities	621.1		737.8		Other long-term liabilities	600.5		610.5
Total liabilities	Total liabilities	37,284.2		36,707.1		Total liabilities	36,922.0		36,677.1
Shareholders' deficit:	Shareholders' deficit:					Shareholders' deficit:
Common stock ($0.001 par value) — authorized, 2,400.0 shares; issued and outstanding, 1,151.6 and 1,180.0 shares, respectively		1.2		1.2
Common stock ($0.001 par value) — authorized, 2,400.0 shares; issued and outstanding, 1,148.5 and 1,147.9 shares, respectively						Common stock ($0.001 par value) — authorized, 2,400.0 shares; issued and outstanding, 1,148.5 and 1,147.9 shares, respectively	1.1		1.1
Additional paid-in capital	Additional paid-in capital	41.1		846.1		Additional paid-in capital	67.2		205.3
Retained deficit	Retained deficit	(8,753.0)		(6,315.7)		Retained deficit	(8,203.2)		(8,449.8)
Accumulated other comprehensive income		253.5		147.2
Accumulated other comprehensive income/(loss)						Accumulated other comprehensive income/(loss)	(538.9)		(463.2)
Total shareholders’ deficit	Total shareholders’ deficit	(8,457.2)		(5,321.2)		Total shareholders’ deficit	(8,673.8)		(8,706.6)
Noncontrolling interests	Noncontrolling interests	6.9		6.7		Noncontrolling interests	7.9		7.9
Total deficit	Total deficit	(8,450.3)		(5,314.5)		Total deficit	(8,665.9)		(8,698.7)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIT)	TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIT)	$	28,833.9	$	31,392.6	TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIT)	$	28,256.1	$	27,978.4

See Notes to Consolidated Financial Statements.

Table of Contents

STARBUCKS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions, unaudited)


		Quarter Ended					Quarter Ended
		Jan 2, 2022		Dec 27, 2020			Jan 1, 2023		Jan 2, 2022
OPERATING ACTIVITIES:	OPERATING ACTIVITIES:					OPERATING ACTIVITIES:
Net earnings including noncontrolling interests	Net earnings including noncontrolling interests	$	816.1	$	622.2	Net earnings including noncontrolling interests	$	855.2	$	816.1
Adjustments to reconcile net earnings to net cash provided by operating activities:	Adjustments to reconcile net earnings to net cash provided by operating activities:					Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	386.4		388.4		Depreciation and amortization	342.5		386.4
Deferred income taxes, net	Deferred income taxes, net	(0.3)		(6.1)		Deferred income taxes, net	15.8		(0.3)
Income earned from equity method investees	Income earned from equity method investees	(46.6)		(69.0)		Income earned from equity method investees	(56.9)		(46.6)
Distributions received from equity method investees	Distributions received from equity method investees	44.9		77.2		Distributions received from equity method investees	45.7		44.9

Stock-based compensation	Stock-based compensation	95.8		99.3		Stock-based compensation	85.2		95.8

Non-cash lease costs	Non-cash lease costs	330.4		308.3		Non-cash lease costs	263.7		330.4
Loss on retirement and impairment of assets	Loss on retirement and impairment of assets	50.7		132.6		Loss on retirement and impairment of assets	21.1		50.7
Other	Other	(4.9)		(10.2)		Other	6.7		(4.9)
Cash provided by/(used in) changes in operating assets and liabilities:	Cash provided by/(used in) changes in operating assets and liabilities:					Cash provided by/(used in) changes in operating assets and liabilities:
Accounts receivable	Accounts receivable	(91.6)		19.6		Accounts receivable	42.0		(91.6)
Inventories	Inventories	(36.0)		90.1		Inventories	108.5		(36.0)
Prepaid expenses and other current assets		64.6		5.2

Accounts payable	Accounts payable	84.0		24.8		Accounts payable	(117.3)		84.0
Deferred revenue	Deferred revenue	461.3		398.9		Deferred revenue	461.0		461.3
Operating lease liability	Operating lease liability	(363.3)		(314.8)		Operating lease liability	(281.4)		(363.3)
Other operating assets and liabilities	Other operating assets and liabilities	79.4		69.2		Other operating assets and liabilities	(198.6)		144.0
Net cash provided by operating activities	Net cash provided by operating activities	1,870.9		1,835.7		Net cash provided by operating activities	1,593.2		1,870.9
INVESTING ACTIVITIES:	INVESTING ACTIVITIES:					INVESTING ACTIVITIES:
Purchases of investments	Purchases of investments	(61.0)		(135.5)		Purchases of investments	(10.5)		(61.0)
Sales of investments	Sales of investments	72.6		91.2		Sales of investments	0.8		72.6
Maturities and calls of investments	Maturities and calls of investments	45.6		113.7		Maturities and calls of investments	253.3		45.6

Additions to property, plant and equipment	Additions to property, plant and equipment	(416.8)		(324.2)		Additions to property, plant and equipment	(516.8)		(416.8)

Other	Other	(41.4)		(17.7)		Other	(6.1)		(41.4)
Net cash used in investing activities	Net cash used in investing activities	(401.0)		(272.5)		Net cash used in investing activities	(279.3)		(401.0)
FINANCING ACTIVITIES:	FINANCING ACTIVITIES:					FINANCING ACTIVITIES:
Proceeds from issuance of commercial paper		200.0		—
Net proceeds from issuance of short-term debt		—		192.9
Repayments of short-term debt		—		(144.7)
Net proceeds/(payments) from issuance of commercial paper						Net proceeds/(payments) from issuance of commercial paper	(175.0)		200.0

Repayments of long-term debt		—		(500.0)

Proceeds from issuance of common stock	Proceeds from issuance of common stock	41.3		102.8		Proceeds from issuance of common stock	45.9		41.3
Cash dividends paid	Cash dividends paid	(576.0)		(528.2)		Cash dividends paid	(608.3)		(576.0)
Repurchase of common stock	Repurchase of common stock	(3,520.9)		—		Repurchase of common stock	(191.4)		(3,520.9)
Minimum tax withholdings on share-based awards	Minimum tax withholdings on share-based awards	(113.6)		(88.6)		Minimum tax withholdings on share-based awards	(79.0)		(113.6)

Net cash used in financing activities		(3,969.2)		(965.8)
Net cash provided by/(used in) financing activities						Net cash provided by/(used in) financing activities	(1,007.8)		(3,969.2)
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	13.0		79.8		Effect of exchange rate changes on cash and cash equivalents	62.0		13.0
Net increase/(decrease) in cash and cash equivalents	Net increase/(decrease) in cash and cash equivalents	(2,486.3)		677.2		Net increase/(decrease) in cash and cash equivalents	368.1		(2,486.3)
CASH AND CASH EQUIVALENTS:	CASH AND CASH EQUIVALENTS:					CASH AND CASH EQUIVALENTS:
Beginning of period	Beginning of period	6,455.7		4,350.9		Beginning of period	2,818.4		6,455.7
End of period	End of period	$	3,969.4	$	5,028.1	End of period	$	3,186.5	$	3,969.4
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:	SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:					SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:	Cash paid during the period for:					Cash paid during the period for:
Interest, net of capitalized interest	Interest, net of capitalized interest	$	108.3	$	130.0	Interest, net of capitalized interest	$	116.7	$	108.3
Income taxes	Income taxes	$	161.4	$	109.4	Income taxes	$	106.2	$	161.4

See Notes to Consolidated Financial Statements.

Table of Contents

STARBUCKS CORPORATION

CONSOLIDATED STATEMENTS OF EQUITY

For the Quarters Ended January 1, 2023 and January 2, 2022 ~~and December 27, 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				Common Stock							Additional Paid-in Capital				Retained Earnings/(Deficit)				Accumulated Other Comprehensive Income/(Loss)				Shareholders’ Equity/(Deficit)				Noncontrolling Interests				Total
														Shares								Amount
Balance, October 2, 2022																											Balance, October 2, 2022	1,147.9			$	1.1					$	205.3			$	(8,449.8)			$	(463.2)			$	(8,706.6)			$	7.9			$	(8,698.7)

Net earnings																											Net earnings	—			—				—				855.2				—				855.2				—				855.2
Other comprehensive loss																											Other comprehensive loss	—			—				—				—				(75.7)				(75.7)				—				(75.7)
Stock-based compensation expense																											Stock-based compensation expense	—			—				86.4				—				—				86.4				—				86.4
Exercise of stock options/vesting of RSUs																											Exercise of stock options/vesting of RSUs	2.4			—				(44.7)				—				—				(44.7)				—				(44.7)
Sale of common stock																											Sale of common stock	0.1			—				11.6				—				—				11.6				—				11.6
Repurchase of common stock																											Repurchase of common stock	(1.9)			—				(191.4)				—				—				(191.4)				—				(191.4)
Cash dividends declared, $0.53 per share																											Cash dividends declared, $0.53 per share	—			—				—				(608.6)				—				(608.6)				—				(608.6)

Balance, January 1, 2023																											Balance, January 1, 2023	1,148.5			$	1.1			$	67.2			$	(8,203.2)			$	(538.9)			$	(8,673.8)			$	7.9			$	(8,665.9)
		Shares	Amount				Additional Paid-in Capital						Retained Earnings/(Deficit)						Accumulated Other Comprehensive Income/(Loss)				Shareholders’ Equity/(Deficit)					Noncontrolling Interests			Total
Balance, October 3, 2021	Balance, October 3, 2021	1,180.0	$	1.2											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	Net earnings	—	—		—					815.9			—					815.9				0.2					816.1		Net earnings	—			—				—				815.9				—				815.9				0.2				816.1
Other comprehensive income	Other comprehensive income	—	—		—			—			106.3				106.3					—				106.3			Other comprehensive income	—			—				—				—				106.3				106.3				—				106.3
Stock-based compensation expense	Stock-based compensation expense	—	—		97.1			—			—				97.1					—				97.1			Stock-based compensation expense	—			—				97.1				—				—				97.1				—				97.1
Exercise of stock options/vesting of RSUs	Exercise of stock options/vesting of RSUs	2.6	—		(84.1)			—			—				(84.1)					—				(84.1)			Exercise of stock options/vesting of RSUs	2.6			—				(84.1)				—				—				(84.1)				—				(84.1)
Sale of common stock	Sale of common stock	0.1	—		11.8			—			—				11.8					—				11.8			Sale of common stock	0.1			—				11.8				—				—				11.8				—				11.8
Repurchase of common stock	Repurchase of common stock	(31.1)	—		(829.8)			(2,691.1)			—				(3,520.9)					—				(3,520.9)			Repurchase of common stock	(31.1)			—				(829.8)				(2,691.1)				—				(3,520.9)				—				(3,520.9)
Cash dividends declared, $0.49 per share	Cash dividends declared, $0.49 per share	—	—		—			(562.1)			—				(562.1)					—				(562.1)			Cash dividends declared, $0.49 per share	—			—				—				(562.1)				—				(562.1)				—				(562.1)

Balance, January 2, 2022	Balance, January 2, 2022	1,151.6	$	1.2	$	41.1		$	(8,753.0)		$	253.5			$	(8,457.2)				$	6.9			$	(8,450.3)		Balance, January 2, 2022	1,151.6			$	1.2			$	41.1			$	(8,753.0)			$	253.5			$	(8,457.2)			$	6.9			$	(8,450.3)

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		—	—		—			622.2			—				622.2					—				622.2
Other comprehensive income		—	—		—			—			218.7				218.7					—				218.7
Stock-based compensation expense		—	—		100.5			—			—				100.5					—				100.5
Exercise of stock options/vesting of RSUs		3.8	—		4.0			—			—				4.0					—				4.0
Sale of common stock		0.1	—		10.2			—			—				10.2					—				10.2

Cash dividends declared, $0.90 per share		—	—		—			(1,058.0)			—				(1,058.0)					—				(1,058.0)

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

See Notes to Consolidated Financial Statements.

Table of Contents

STARBUCKS CORPORATION

INDEX FOR NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 1	Summary of Significant Accounting Policies and Estimates	9
Note 2	Acquisitions, Divestitures and Strategic Alliance	9
Note 23	Derivative Financial Instruments	1110
Note 34	Fair Value Measurements	1413
Note 45	Inventories	1615
Note 56	Supplemental Balance Sheet and Statement of Earnings Information	16
Note 67	Other Intangible Assets and Goodwill	1716
Note 78	Debt	1918
Note 89	Leases	20
Note 910	Deferred Revenue	21
Note 1011	Equity	22
Note 12	Employee Stock Plans	22

Note 13	Earnings per Share	23
Note 1114	~~Employee Stock Plans~~Commitments and Contingencies	23

Note 1215	~~Earnings~~ ~~per Share~~Segment Reporting	24
Note 1316	~~Commitments and Contingencies~~Subsequent Event	24
~~Note 14~~	~~Segment Reporting~~	25

Table of Contents

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 January ~~2, 2022,~~1, 2023, and for the quarters ended January 1, 2023 and January 2, 2022, ~~and December 27, 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 quarters ended January 1, 2023 and January 2, 2022 ~~and December 27, 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 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 October ~~3, 2021~~2, 2022 is derived from our audited consolidated financial statements and notes for the fiscal year ended October ~~3, 2021~~2, 2022 (“fiscal ~~2021”~~2022”) included in Item 8 in the Fiscal ~~2021~~2022 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 ended January ~~2, 2022~~1, 2023 are not necessarily indicative of the results of operations that may be achieved for the entire fiscal year ending October ~~2, 2022~~1, 2023 (“fiscal ~~2022”~~2023”). Our fiscal year 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 2021.

The novel coronavirus, known as the global COVID-19 pandemic, 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 in many of our markets, our businesses demonstrated powerful momentum beyond recovery from the COVID-19 pandemic. ~~However,~~During the ~~Omicron variant quickly spread during the~~first quarter ~~and~~of fiscal 2023, our ~~operations~~China market continued to experience pandemic-related restrictions, impacting sales in both our North America and International segments, primarily China. Impacts also included higher than anticipated costs in North America due to staffing shortages in our supply chain and retail stores.business interruptions, including escalating COVID outbreaks that suppressed customer mobility. We continue to monitor the COVID-19 pandemic and its effect on our business and results of operations; however, we cannot predict the duration, scope or severity of the COVID-19 pandemic or its future impact on our business, results of operations, cash flows and financial condition.

~~Government Subsidies~~

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. Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) and the Canada Emergency Wage Subsidy, which were no longer applicable in late fiscal 2021. However, during the quarter ended January 2, 2022, an international government subsidy reduced our store operating expenses by $11.5 million on our consolidated statements of earnings. During the quarter ended December 27, 2020, qualified payroll and other credits reduced our store operating expenses by $19.8 million on our consolidated statements of earnings. After netting the qualified credits against our payable, a receivable of $98.8 million and $172.4 million was included in prepaid expenses and other current assets as of January 2, 2022 and October 3, 2021, respectively. As of January 2, 2022, deferred payroll tax payments of $116.5 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 on our consolidated balance sheets.

Restructuring

In fiscal ~~2021,~~2022, we ~~substantially completed~~announced our plan in the U.S. market to ~~optimize~~increase efficiency while elevating the partner and customer experience (the “Reinvention Plan”). We believe the investments in partner wages and trainings will increase retention and productivity while the acceleration of purpose-built store concepts and innovations in technologies will provide additional convenience and connection with our ~~North America store portfolio, primarily in dense metropolitan markets by developing new store formats to better cater to changing customer tastes and preferences.~~customers. As a result

~~Table~~ of ~~Contents~~

the restructuring efforts in connection with the Reinvention Plan, we recorded ~~approximately $72.2 million to restructuring and impairments~~an immaterial charge on our consolidated statements of earnings during the quarter ended December 27, 2020. Of this total, $42.6 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. During the quarter ended December 27, 2020, an additional $29.6 million 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. As the restructuring plan was substantially completed in fiscal 2021, we did not recognize any materialJanuary 1, 2023. Future restructuring and impairment ~~amounts during the quarter ended January 2, 2022.~~ costs attributable to our Reinvention Plan are not expected to be material.

As of January ~~2, 2022~~1, 2023 and October ~~3, 2021,~~2, 2022, there were no material restructuring-related accrued liabilities on our consolidated balance sheets.

Recently Adopted Accounting Pronouncements

In the first quarter of fiscal 2022, we adopted the Financial Accounting Standards Board (“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.~~2024. The adoption of the new guidance did not have a material impact toon our financial statements.

Note 2: Acquisitions, Divestitures and Strategic Alliance

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 firstfourth quarter of fiscal ~~2021 under the modified retrospective approach~~2022, we sold our Evolution Fresh brand and ~~resulted in~~business to Bolthouse Farms. This transaction did not have a ~~$2.2 million transition adjustment to opening shareholders' retained deficit~~material impact on our consolidated ~~statements of equity.~~

financial statements.

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Note 2:3: Derivative Financial Instruments

Interest Rates

From time to time, we enter into designated cash flow hedges to manage the variability in cash flows due to changes in benchmark interest rates. We enter into interest rate swap agreements and treasury locks, which are synthetic forward sales of U.S. 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 78, 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 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, 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 4,5, Inventories, or our longer-dated forecasted coffee demand where underlying fixed price and price-to-be-fixed contracts are not yet available. The resulting gains and losses are recorded in AOCI and are subsequently reclassified to product and distribution costs when the hedged exposure affects net earnings.

Depending on market conditions, we may also enter into dairy forward contracts and futures contracts to hedge a portion of anticipated cash flows under our dairy purchase contracts and our forecasted dairy demand. The resulting gains or losses are recorded in AOCI and are subsequently reclassified to product and distribution costs when the hedged exposure affects net earnings.

Cash flow hedges related to anticipated transactions are designated and documented at the inception of each hedge. Cash flows from hedging transactions are classified in the same categories as the cash flows from the respective hedged items. For de-designated cash flow hedges in which the underlying transactions are no longer probable of occurring, the related accumulated derivative gains or losses are recognized in interest income and other, net on our consolidated statements of earnings. These derivatives may be accounted for prospectively as non-designated derivatives until maturity, re-designated to new hedging relationships or terminated early. We continue to believe transactions related to our other designated cash flow hedges are probable to occur.

To mitigate the price uncertainty of a portion of our future purchases, including diesel fuel and other commodities, we enter into swap contracts, futures and collars that are not designated as hedging instruments. The resulting gains and losses are recorded in interest income and other, net to help offset price fluctuations on our beverage, food, packaging and transportation costs, which are included in product and distribution costs on our consolidated statements of earnings.

1110

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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)		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)
		Jan 2, 2022		Oct 3, 2021				Jan 1, 2023				Oct 2, 2022
Cash Flow Hedges:	Cash Flow Hedges:												Cash Flow Hedges:
Coffee	Coffee	$	255.2	$	197.8	$	202.2		5	Coffee	$	(36.4)		$	153.9	$	(20.7)	5
Cross-currency swaps	Cross-currency swaps	3.0		4.4		—			35	Cross-currency swaps	(1.7)			(1.9)		—		23
Dairy	Dairy	3.4		(0.4)		3.4			8	Dairy	(4.2)			(2.6)		(4.2)		8
Foreign currency - other	Foreign currency - other	6.6		1.3		2.9			36	Foreign currency - other	12.8			55.3		12.1		33
Interest rates	Interest rates	(43.6)		(44.8)		(1.4)			130	Interest rates	(5.4)			(5.8)		0.7		0
Net Investment Hedges:	Net Investment Hedges:									Net Investment Hedges:
Cross-currency swaps	Cross-currency swaps	47.6		37.9		—			93	Cross-currency swaps	52.7			67.3		—		111
Foreign currency	Foreign currency	16.0		16.0		—			0	Foreign currency	16.1			16.1		—		0
Foreign currency debt	Foreign currency debt	13.5		(5.3)		—			27	Foreign currency debt	88.1			125.7		—		15

Pre-tax gains and losses on derivative contracts and foreign currency-denominated long-term debt designated as hedging instruments recognized in other comprehensive income (“OCI”) and reclassifications from AOCI to earnings (in millions):


		Quarter Ended														Quarter Ended
		Gains/(Losses) Recognized in OCI Before Reclassifications				Gains/(Losses) Reclassified from AOCI to Earnings						Location of gain/(loss)				Gains/(Losses) Recognized in OCI Before Reclassifications							Gains/(Losses) Reclassified from AOCI to Earnings									Location of gain/(loss)
			Jan 2, 2022			Dec 27, 2020			Jan 2, 2022					Dec 27, 2020									Jan 1, 2023					Jan 2, 2022							Location of gain/(loss)		Jan 2, 2022
Cash Flow Hedges:	Cash Flow Hedges:																Cash Flow Hedges:
Coffee	Coffee		$	71.5		$	12.0		$	6.5		$	0.7		Product and distribution costs		Coffee						$	(119.4)				$	71.5			$	96.7				$	6.5					Product and distribution costs

Cross-currency swaps	Cross-currency swaps				4.5				(3.4)			(0.8)			1.0			Interest expense		Cross-currency swaps											(11.7)				4.5					(2.7)						(0.8)				Interest expense
						6.9					(4.8)			Interest income and other, net											(9.1)							6.9								Interest income and other, net
Dairy	Dairy		4.6					2.5			(0.4)			2.6			Product and distribution costs	Dairy							(3.6)						4.6				(1.5)					(0.4)						Product and distribution costs

Foreign currency - other	Foreign currency - other				6.9				(25.9)			2.2			—				Licensed stores revenue		Foreign currency - other									(46.0)						6.9					8.0						2.2				Licensed stores revenue
						(1.5)					—			Product and distribution costs														2.2						(1.5)								Product and distribution costs
																						0.2					—						Interest income and other, net
Interest rates	Interest rates		1.2					22.5				(0.4)			(0.6)			Interest expense		Interest rates										—				1.2					(0.5)						(0.4)				Interest expense

Interest rates																	Interest rates							—					1.2
	Net Investment Hedges:
Cross-currency swaps	Cross-currency swaps		16.3					(16.5)			3.4			3.2			Interest expense	Cross-currency swaps								(14.0)							16.3					5.3						3.4				Interest expense

Foreign currency debt	Foreign currency debt		25.2			(13.7)			—			—					Foreign currency debt						(50.6)						25.2				—					—

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

Location of gain/(loss) recognized in earnings

Quarter Ended

Location of gain/(loss) recognized in earnings

Quarter Ended

Jan 2, 2022

Dec 27, 2020

Location of gain/(loss) recognized in earnings

Jan 1, 2023

Jan 2, 2022

Non-Designated Derivatives:

Foreign currency - other

Interest income and other, net

10.2

(0.8)

Foreign currency - other

Interest income and other, net

(11.6)

10.2

Coffee

Interest income and other, net

3.1

—

Coffee

Interest income and other, net

(5.5)

3.1

Diesel fuel and other commodities

Interest income and other, net

—

1.2

Diesel fuel and other commodities

Interest income and other, net

(0.2)

—

Fair Value Hedges:

Interest rate swap

Interest expense

(4.8)

0.4

Interest rate swap

Interest expense

(1.6)

(4.8)

Long-term debt (hedged item)

Interest expense

8.2

2.9

Long-term debt (hedged item)

Interest expense

(3.3)

8.2

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Notional amounts of outstanding derivative contracts (in millions):


		Jan 2, 2022		Oct 3, 2021			Jan 1, 2023		Oct 2, 2022
Coffee	Coffee	$	686	$	481	Coffee	$	401	$	649
Cross-currency swaps	Cross-currency swaps	789		806		Cross-currency swaps	1,124		741
Dairy	Dairy	39		53		Dairy	68		94
Diesel fuel and other commodities	Diesel fuel and other commodities	96		10		Diesel fuel and other commodities	25		33
Foreign currency - other	Foreign currency - other	1,261		1,009		Foreign currency - other	1,305		1,269
Interest rate swaps	Interest rate swaps	1,250		1,250		Interest rate swaps	1,100		1,100

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


			Derivative Assets						Derivative Assets
		Balance Sheet Location	Jan 2, 2022		Oct 3, 2021			Balance Sheet Location	Jan 1, 2023		Oct 2, 2022
Designated Derivative Instruments:	Designated Derivative Instruments:						Designated Derivative Instruments:
Coffee		Prepaid expenses and other current assets	$	90.8	$	130.5
Cross-currency swaps							Cross-currency swaps	Other long-term assets	$	85.4	$	115.4

Cross-currency swaps		Other long-term assets	70.8		54.7
Dairy	Dairy	Prepaid expenses and other current assets	5.5		0.8		Dairy	Prepaid expenses and other current assets	0.2		0.5

Foreign currency - other	Foreign currency - other	Prepaid expenses and other current assets	9.5		8.9		Foreign currency - other	Prepaid expenses and other current assets	22.4		39.9
		Other long-term assets	8.7		6.9			Other long-term assets	13.8		33.5

Interest rate swaps		Other long-term assets	18.5		22.7

Non-designated Derivative Instruments:	Non-designated Derivative Instruments:						Non-designated Derivative Instruments:
Coffee		Prepaid expenses and other current assets	29.8		—
Dairy		Prepaid expenses and other current assets	0.6		—

Diesel fuel and other commodities	Diesel fuel and other commodities	Prepaid expenses and other current assets	0.1		0.1		Diesel fuel and other commodities	Prepaid expenses and other current assets	0.1		0.4
Foreign currency							Foreign currency	Prepaid expenses and other current assets	15.8		34.3
	Foreign currency	Prepaid expenses and other current assets	18.1		7.3			Other long-term assets	—		7.3

			Derivative Liabilities						Derivative Liabilities
		Balance Sheet Location	Jan 2, 2022		Oct 3, 2021			Balance Sheet Location	Jan 1, 2023		Oct 2, 2022
Designated Derivative Instruments:	Designated Derivative Instruments:						Designated Derivative Instruments:
Coffee		Accrued liabilities	$	3.1	$	—

Cross-currency swaps	Cross-currency swaps	Other long-term liabilities	2.1		3.3		Cross-currency swaps	Other long-term liabilities	$	1.6	$	—

Dairy	Dairy	Accrued liabilities	1.3		0.9		Dairy	Accrued liabilities	3.1		2.9
Foreign currency - other	Foreign currency - other	Accrued liabilities	5.5		7.4		Foreign currency - other	Accrued liabilities	10.0		0.3
		Other long-term liabilities	3.2		3.6			Other long-term liabilities	10.1		—
Interest rates		Other long-term liabilities	0.6		1.3
Interest rate							Interest rate	Accrued liabilities	20.4		12.0
Interest rate swap							Interest rate swap	Other long-term liabilities	33.6		34.0
Non-designated Derivative Instruments:							Non-designated Derivative Instruments:

Non-designated Derivative Instruments:
Dairy		Accrued liabilities	0.2		0.2
Diesel fuel and other commodities	Diesel fuel and other commodities	Accrued liabilities	0.1		—		Diesel fuel and other commodities	Accrued liabilities	0.4		—
Foreign currency	Foreign currency	Accrued liabilities	1.3		0.1		Foreign currency	Accrued liabilities	1.3		5.8

The following amounts were recorded on the consolidated balance sheets related to fixed-to-floating interest rate swaps designated in fair value hedging ~~relationships:~~relationships (
Carrying amount of hedged item Cumulative amount of fair value hedging adjustment included in the carrying amount
Jan 2, 2022 Oct 3, 2021 Jan 2, 2022 Oct 3, 2021
Location on the balance sheet
Long-term debt $ 763.5 $ 771.7 $ 13.5 $ 21.7
in millions):


	Carrying amount of hedged item				Cumulative amount of fair value hedging adjustment included in the carrying amount
	Jan 1, 2023		Oct 2, 2022		Jan 1, 2023		Oct 2, 2022
Location on the balance sheet
Long-term debt	$	1,051.0	$	1,047.7	$	(49.0)	$	(52.3)

Additional disclosures related to cash flow gains and losses included in AOCI, as well as subsequent reclassifications to earnings, are included in Note 1011, Equity.

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Note 3:4: Fair Value Measurements

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


				Fair Value Measurements at Reporting Date Using									Fair Value Measurements at Reporting Date Using
		Balance at January 2, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			Balance at January 1, 2023		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	$	3,969.4	$	3,969.4	$	—	$	—	Cash and cash equivalents	$	3,186.5	$	3,042.5	$	144.0	$	—
Short-term investments:	Short-term investments:									Short-term investments:
Available-for-sale debt securities	Available-for-sale debt securities									Available-for-sale debt securities

Commercial paper	Commercial paper	3.5		—		3.5		—		Commercial paper	0.2		—		0.2		—
Corporate debt securities	Corporate debt securities	4.8		—		4.8		—		Corporate debt securities	23.2		—		23.2		—
U.S. government treasury securities										U.S. government treasury securities	8.9		8.9		—		—

Mortgage and other asset-backed securities		0.1		—		0.1		—

Total available-for-sale debt securities	Total available-for-sale debt securities	8.4		—		8.4		—		Total available-for-sale debt securities	32.3		8.9		23.4		—
Structured deposits										Structured deposits	28.8		—		28.8		—
Marketable equity securities	Marketable equity securities	79.0		79.0		—		—		Marketable equity securities	62.8		62.8		—		—
Total short-term investments	Total short-term investments	87.4		79.0		8.4		—		Total short-term investments	123.9		71.7		52.2		—
Prepaid expenses and other current assets:	Prepaid expenses and other current assets:									Prepaid expenses and other current assets:
Derivative assets	Derivative assets	154.4		123.6		30.8		—		Derivative assets	38.5		—		38.5		—
Long-term investments:	Long-term investments:									Long-term investments:
Available-for-sale debt securities	Available-for-sale debt securities									Available-for-sale debt securities

Corporate debt securities	Corporate debt securities	148.1		—		148.1		—		Corporate debt securities	136.4		—		136.4		—
Foreign government obligations	Foreign government obligations	4.0		—		4.0		—		Foreign government obligations	3.8		—		3.8		—
Mortgage and other asset-backed securities	Mortgage and other asset-backed securities	59.9		—		59.9		—		Mortgage and other asset-backed securities	53.3		—		53.3		—
State and local government obligations	State and local government obligations	1.4		—		1.4		—		State and local government obligations	1.3		—		1.3		—
U.S. government treasury securities	U.S. government treasury securities	86.2		86.2		—		—		U.S. government treasury securities	88.8		88.8		—		—
Total long-term investments	Total long-term investments	299.6		86.2		213.4		—		Total long-term investments	283.6		88.8		194.8		—
Other long-term assets:	Other long-term assets:									Other long-term assets:
Derivative assets	Derivative assets	98.0		—		98.0		—		Derivative assets	99.2		—		99.2		—

Total assets	Total assets	$	4,608.8	$	4,258.2	$	350.6	$	—	Total assets	$	3,731.7	$	3,203.0	$	528.7	$	—
Liabilities:	Liabilities:									Liabilities:
Accrued liabilities:	Accrued liabilities:									Accrued liabilities:
Derivative liabilities	Derivative liabilities	$	11.5	$	4.0	$	7.5	$	—	Derivative liabilities	$	35.2	$	—	$	35.2	$	—
Other long-term liabilities:	Other long-term liabilities:									Other long-term liabilities:
Derivative liabilities	Derivative liabilities	5.9		—		5.9		—		Derivative liabilities	45.3		—		45.3		—
Total liabilities	Total liabilities	$	17.4	$	4.0	$	13.4	$	—	Total liabilities	$	80.5	$	—	$	80.5	$	—

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				Fair Value Measurements at Reporting Date Using									Fair Value Measurements at Reporting Date Using
		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)			Balance at October 2, 2022		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	$	6,455.7	$	6,455.7	$	—	$	—	Cash and cash equivalents	$	2,818.4	$	2,797.3	$	21.1	$	—
Short-term investments:	Short-term investments:									Short-term investments:
Available-for-sale debt securities	Available-for-sale debt securities									Available-for-sale debt securities

Commercial paper		63.0		—		63.0		—

Corporate debt securities	Corporate debt securities	24.7		—		24.7		—		Corporate debt securities	22.4		—		22.4		—
U.S. government treasury securities										U.S. government treasury securities	9.3		9.3		—		—

Mortgage and other asset-backed securities		0.1		—		0.1		—

Total available-for-sale debt securities	Total available-for-sale debt securities	87.8		—		87.8		—		Total available-for-sale debt securities	31.7		9.3		22.4		—
Structured deposits										Structured deposits	275.1		—		275.1		—
Marketable equity securities	Marketable equity securities	74.4		74.4		—		—		Marketable equity securities	57.7		57.7		—		—
Total short-term investments	Total short-term investments	162.2		74.4		87.8		—		Total short-term investments	364.5		67.0		297.5		—
Prepaid expenses and other current assets:	Prepaid expenses and other current assets:									Prepaid expenses and other current assets:
Derivative assets	Derivative assets	147.6		131.1		16.5		—		Derivative assets	75.1		—		75.1		—
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		6.0		—		—		6.0

Corporate debt securities	Corporate debt securities	162.0		—		162.0		—		Corporate debt securities	134.7		—		134.7		—
Foreign government obligations	Foreign government obligations	4.0		—		4.0		—		Foreign government obligations	3.8		—		3.8		—
Mortgage and other asset-backed securities	Mortgage and other asset-backed securities	31.9		—		31.9		—		Mortgage and other asset-backed securities	56.5		—		56.5		—
State and local government obligations	State and local government obligations	1.5		—		1.5		—		State and local government obligations	1.3		—		1.3		—
U.S. government treasury securities	U.S. government treasury securities	76.3		76.3		—		—		U.S. government treasury securities	82.8		82.8		—		—
Total long-term investments	Total long-term investments	281.7		76.3		199.4		6.0		Total long-term investments	279.1		82.8		196.3		—
Other long-term assets:	Other long-term assets:									Other long-term assets:
Derivative assets	Derivative assets	84.3		—		84.3		—		Derivative assets	156.2		—		156.2		—
Total assets	Total assets	$	7,131.5	$	6,737.5	$	388.0	$	6.0	Total assets	$	3,693.3	$	2,947.1	$	746.2	$	—
Liabilities:	Liabilities:									Liabilities:
Accrued liabilities:	Accrued liabilities:									Accrued liabilities:
Derivative liabilities	Derivative liabilities	$	8.6	$	0.3	$	8.3	$	—	Derivative liabilities	$	21.0	$	—	$	21.0	$	—
Other long-term liabilities:	Other long-term liabilities:									Other long-term liabilities:
Derivative liabilities	Derivative liabilities	8.2		—		8.2		—		Derivative liabilities	34.0		—		34.0		—
Total liabilities	Total liabilities	$	16.8	$	0.3	$	16.5	$	—	Total liabilities	$	55.0	$	—	$	55.0	$	—

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, structured deposits and marketable equity securities were not material as of January ~~2, 2022~~1, 2023 and October ~~3, 2021.~~2, 2022.

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.

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The estimated fair value of our long-term debt based on the quoted market price (Level 2) is included at Note 78, Debt. There were no material fair value adjustments during the quarters ended January 1, 2023 and January 2, ~~2022 and December 27, 2020.~~2022.

Note 4:5: Inventories (in millions):


		Jan 2, 2022		Oct 3, 2021			Jan 1, 2023		Oct 2, 2022
Coffee:	Coffee:					Coffee:
Unroasted	Unroasted	$	676.2	$	670.3	Unroasted	$	1,015.1	$	1,018.6
Roasted	Roasted	273.3		233.5		Roasted	293.2		310.3
Other merchandise held for sale	Other merchandise held for sale	332.2		329.3		Other merchandise held for sale	383.5		430.9
Packaging and other supplies	Packaging and other supplies	355.4		370.8		Packaging and other supplies	396.3		416.8
Total	Total	$	1,637.1	$	1,603.9	Total	$	2,088.1	$	2,176.6

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 January ~~2, 2022,~~1, 2023, we had committed to purchasing green coffee totaling ~~$617~~$333.3 million under fixed-price contracts and an estimated ~~$1,433~~$773.2 million under price-to-be-fixed contracts. A portion of our price-to-be-fixed contracts are effectively fixed through the use of futures. See Note 23, 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.

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Note 5:6: Supplemental Balance Sheet and Statement of Earnings Information (in millions):

Prepaid Expenses and Other Current Assets
Jan 2, 2022 Oct 3, 2021
Income tax receivable $ 21.6 $ 20.7
Government subsidies receivable 98.8 172.4
Other prepaid expenses and current assets 409.7 401.5
Total prepaid expenses and current assets $ 530.1 $ 594.6

~~Table of Contents~~


	Jan 1, 2023		Oct 2, 2022
Income tax receivable	$	10.0	$	27.7
Government subsidies receivable	28.4		69.4
Other prepaid expenses and current assets	335.1		386.6
Total prepaid expenses and current assets	$	373.5	$	483.7

Property, Plant and Equipment, net


		Jan 2, 2022		Oct 3, 2021			Jan 1, 2023		Oct 2, 2022
Land	Land	$	46.2	$	46.2	Land	$	46.1	$	46.1
Buildings	Buildings	582.1		587.6		Buildings	566.6		555.4
Leasehold improvements	Leasehold improvements	8,739.5		8,637.6		Leasehold improvements	9,368.6		9,066.8
Store equipment	Store equipment	2,981.9		2,934.1		Store equipment	3,086.6		3,018.2
Roasting equipment	Roasting equipment	893.4		857.2		Roasting equipment	809.3		838.5
Furniture, fixtures and other	Furniture, fixtures and other	1,422.9		1,392.0		Furniture, fixtures and other	1,578.4		1,526.1
Work in progress	Work in progress	420.1		374.1		Work in progress	603.0		558.7
Property, plant and equipment, gross	Property, plant and equipment, gross	15,086.1		14,828.8		Property, plant and equipment, gross	16,058.6		15,609.8
Accumulated depreciation	Accumulated depreciation	(8,688.1)		(8,459.3)		Accumulated depreciation	(9,359.1)		(9,049.3)
Property, plant and equipment, net	Property, plant and equipment, net	$	6,398.0	$	6,369.5	Property, plant and equipment, net	$	6,699.5	$	6,560.5

Accrued Liabilities


		Jan 2, 2022		Oct 3, 2021			Jan 1, 2023		Oct 2, 2022
Accrued occupancy costs	Accrued occupancy costs	$	99.9	$	107.1	Accrued occupancy costs	$	77.9	$	84.6
Accrued dividends payable	Accrued dividends payable	564.5		578.1		Accrued dividends payable	608.6		608.3
Accrued capital and other operating expenditures	Accrued capital and other operating expenditures	973.0		840.7		Accrued capital and other operating expenditures	683.8		878.1
Self-insurance reserves	Self-insurance reserves	231.2		229.3		Self-insurance reserves	243.6		232.3
Income taxes payable	Income taxes payable	394.2		348.0		Income taxes payable	280.1		139.2
Accrued business taxes	Accrued business taxes	181.5		218.0		Accrued business taxes	195.6		194.6
Total accrued liabilities	Total accrued liabilities	$	2,444.3	$	2,321.2	Total accrued liabilities	$	2,089.6	$	2,137.1

Store Operating Expenses


		Quarter Ended				Quarter Ended
		Jan 2, 2022		Dec 27, 2020				Jan 1, 2023		Jan 2, 2022
Wages and benefits	Wages and benefits	$	2,010.7	$	1,606.2		Wages and benefits	$	2,215.7	$	2,010.7
Occupancy costs	Occupancy costs	665.3		628.1			Occupancy costs	671.5		665.3
Other expenses	Other expenses	724.0		633.0			Other expenses	778.1		724.0
Total store operating expenses	Total store operating expenses	$	3,400.0	$	2,867.3		Total store operating expenses	$	3,665.3	$	3,400.0

Note 6:7: Other Intangible Assets and Goodwill

Indefinite-Lived Intangible Assets


(in millions)	(in millions)	Jan 2, 2022		Oct 3, 2021		(in millions)	Jan 1, 2023		Oct 2, 2022
Trade names, trademarks and patents	Trade names, trademarks and patents	$	96.8	$	96.4	Trade names, trademarks and patents	$	97.8	$	97.5

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Finite-Lived Intangible Assets


		Jan 2, 2022						Oct 3, 2021							Jan 1, 2023						Oct 2, 2022
(in millions)	(in millions)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		(in millions)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Acquired and reacquired rights	Acquired and reacquired rights	$	1,138.1	$	(1,009.5)	$	128.6	$	1,141.5	$	(971.9)	$	169.6	Acquired and reacquired rights	$	1,030.4	$	(1,030.4)	$	—	$	990.0	$	(990.0)	$	—
Acquired trade secrets and processes	Acquired trade secrets and processes	27.6		(25.4)		2.2		27.6		(24.8)		2.8		Acquired trade secrets and processes	27.6		(27.6)		—		27.6		(27.3)		0.3
Trade names, trademarks and patents	Trade names, trademarks and patents	126.9		(56.8)		70.1		126.3		(51.9)		74.4		Trade names, trademarks and patents	125.0		(74.5)		50.5		124.6		(69.6)		55.0
Licensing agreements	Licensing agreements	21.2		(16.4)		4.8		18.8		(13.5)		5.3		Licensing agreements	18.4		(15.3)		3.1		19.3		(16.2)		3.1
Other finite-lived intangible assets	Other finite-lived intangible assets	24.2		(24.2)		—		24.0		(22.6)		1.4		Other finite-lived intangible assets	21.0		(21.0)		—		20.6		(20.6)		—
Total finite-lived intangible assets	Total finite-lived intangible assets	$	1,338.0	$	(1,132.3)	$	205.7	$	1,338.2	$	(1,084.7)	$	253.5	Total finite-lived intangible assets	$	1,222.4	$	(1,168.8)	$	53.6	$	1,182.1	$	(1,123.7)	$	58.4

Amortization expense for finite-lived intangible assets was $5.6 million for the quarter ended January 1, 2023 and $50.2 million for the quarter ended January 2, 2022, ~~and $61.2 million for the quarter ended December 27, 2020.~~respectively.

Estimated future amortization expense as of January ~~2, 2022~~1, 2023 (in millions):


Fiscal Year	Fiscal Year	Total		Fiscal Year	Total
2022 (excluding the quarter ended January 2, 2022)		$	146.1
2023		21.0
2023 (excluding the quarter ended January 1, 2023)				2023 (excluding the quarter ended January 1, 2023)	$	15.2
2024	2024	20.4		2024	20.0
2025	2025	14.4		2025	14.0
2026	2026	1.4		2026	1.3
2027				2027	1.0
Thereafter	Thereafter	2.4		Thereafter	2.1
Total estimated future amortization expense	Total estimated future amortization expense	$	205.7	Total estimated future amortization expense	$	53.6

Goodwill

Changes in the carrying amount of goodwill by reportable operating segment (in millions):
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)
(0.1) (1.5) — — (1.6)
Goodwill balance at January 2, 2022 $ 493.1 $ 3,146.8 $ 34.7 $ 1.1 $ 3,675.7


	North America		International		Channel Development		Corporate and Other		Total
Goodwill balance at October 2, 2022	$	491.1	$	2,756.7	$	34.7	$	1.0	$	3,283.5


Other(1)	0.3		99.2		—		—		99.5
Goodwill balance at January 1, 2023	$	491.4	$	2,855.9	$	34.7	$	1.0	$	3,383.0

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

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Note 7:8: Debt

Revolving Credit Facility

Our $3$3.0 billion unsecured five-year revolving credit facility (the ~~"2021~~“2021 credit ~~facility"~~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 $1.0 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 ~~0.025%~~0.500%, (ii) Bank of America’s prime rate, and (iii) the Eurocurrency Rate (as defined in the 2021 credit facility) plus ~~1.025%~~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 January ~~2, 2022,~~1, 2023, we were in compliance with all applicable covenants. No amounts were outstanding under our 2021 credit facility as of January ~~2, 2022~~1, 2023 or October ~~3, 2021.~~2, 2022.

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$3.0 billion, with individual maturities that may vary but not exceed 397 days from the date of issue. Amounts outstanding under the commercial paper program are required to be backstopped by available commitments under our 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 January 1, 2023, we had no borrowings outstanding under the program. As of October 2, 2022, we had ~~$200~~$175.0 million in borrowings outstanding under ~~the~~this 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 ~~$43.4~~$37.6 million, credit facility is currently set to mature on ~~December 31, 2022.~~January 4, 2024. Borrowings under ~~such~~this credit facility are subject to terms defined within the facility and will bear interest at a variable rate based on Tokyo Interbank Offered Rate ("TIBOR") plus an applicable margin of 0.400%.

•A ¥10 billion, or ~~$86.9~~$75.2 million, credit facility is currently set to mature on March ~~26, 2022.~~27, 2023. Borrowings under ~~such~~this credit facility are subject to terms defined within the facility and will bear interest at a variable rate based on TIBOR plus an applicable margin of 0.350%.

As of January ~~2, 2022~~1, 2023 and October ~~3, 2021,~~2, 2022, we had 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):


		Jan 2, 2022				Oct 3, 2021				Stated Interest Rate		Effective Interest Rate(1)			Jan 1, 2023				Oct 2, 2022				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

May 2022 notes		$	500.0	$	501.7	$	500.0	$	503.1	1.300	%	1.334	%
June 2022 notes		500.0		503.2		500.0		506.7		2.700	%	2.819	%
March 2023 notes	March 2023 notes	1,000.0		1,023.6		1,000.0		1,035.9		3.100	%	3.107	%	March 2023 notes	$	1,000.0	$	996.6	$	1,000.0	$	996.5	3.100	%	3.107	%
October 2023 notes(2)	October 2023 notes(2)	750.0		782.3		750.0		794.8		3.850	%	2.859	%	October 2023 notes(2)	750.0		745.0		750.0		744.8		3.850	%	2.859	%
March 2024 notes(3)		738.6		737.4		763.8		761.0		0.372	%	0.462	%
February 2024 notes(3)														February 2024 notes(3)	500.0		496.8		500.0		497.3		4.590	%	4.821	%
March 2024 notes(4)														March 2024 notes(4)	639.0		653.5		588.4		584.7		0.372	%	0.462	%
August 2025 notes	August 2025 notes	1,250.0		1,347.1		1,250.0		1,371.5		3.800	%	3.721	%	August 2025 notes	1,250.0		1,225.3		1,250.0		1,209.6		3.800	%	3.721	%
June 2026 notes	June 2026 notes	500.0		516.2		500.0		526.4		2.450	%	2.511	%	June 2026 notes	500.0		465.6		500.0		458.3		2.450	%	2.511	%
March 2027 notes	March 2027 notes	500.0		502.2		500.0		513.0		2.000	%	2.058	%	March 2027 notes	500.0		447.5		500.0		437.9		2.000	%	2.058	%
March 2028 notes	March 2028 notes	600.0		648.4		600.0		663.2		3.500	%	3.529	%	March 2028 notes	600.0		565.2		600.0		554.8		3.500	%	3.529	%
November 2028 notes	November 2028 notes	750.0		837.3		750.0		855.9		4.000	%	3.958	%	November 2028 notes	750.0		713.8		750.0		704.7		4.000	%	3.958	%
August 2029 notes		1,000.0		1,084.0		1,000.0		1,109.9		3.550	%	3.840	%
August 2029 notes(2)														August 2029 notes(2)	1,000.0		924.7		1,000.0		900.3		3.550	%	3.840	%
March 2030 notes	March 2030 notes	750.0		746.6		750.0		758.6		2.250	%	3.084	%	March 2030 notes	750.0		625.2		750.0		607.7		2.250	%	3.084	%
November 2030 notes	November 2030 notes	1,250.0		1,265.0		1,250.0		1,286.9		2.550	%	2.582	%	November 2030 notes	1,250.0		1,052.7		1,250.0		1,017.9		2.550	%	2.582	%
February 2032 notes														February 2032 notes	1,000.0		857.8		1,000.0		827.1		3.000	%	3.155	%
June 2045 notes	June 2045 notes	350.0		406.0		350.0		414.1		4.300	%	4.348	%	June 2045 notes	350.0		296.4		350.0		281.5		4.300	%	4.348	%
December 2047 notes	December 2047 notes	500.0		541.6		500.0		556.5		3.750	%	3.765	%	December 2047 notes	500.0		381.5		500.0		369.6		3.750	%	3.765	%
November 2048 notes	November 2048 notes	1,000.0		1,219.7		1,000.0		1,248.6		4.500	%	4.504	%	November 2048 notes	1,000.0		866.6		1,000.0		824.6		4.500	%	4.504	%
August 2049 notes	August 2049 notes	1,000.0		1,221.9		1,000.0		1,241.0		4.450	%	4.447	%	August 2049 notes	1,000.0		857.0		1,000.0		817.8		4.450	%	4.447	%
March 2050 notes	March 2050 notes	500.0		520.2		500.0		527.5		3.350	%	3.362	%	March 2050 notes	500.0		356.1		500.0		342.0		3.350	%	3.362	%
November 2050 notes	November 2050 notes	1,250.0		1,322.3		1,250.0		1,339.5		3.500	%	3.528	%	November 2050 notes	1,250.0		906.3		1,250.0		874.9		3.500	%	3.528	%
Total	Total	14,688.6		15,726.7		14,713.8		16,014.1						Total	15,089.0		13,433.6		15,038.4		13,052.0
Aggregate debt issuance costs and unamortized premium/(discount), net	Aggregate debt issuance costs and unamortized premium/(discount), net	(116.5)				(119.7)								Aggregate debt issuance costs and unamortized premium/(discount), net	(114.0)				(117.2)
Hedge accounting fair value adjustment(2)	Hedge accounting fair value adjustment(2)	13.5				21.7								Hedge accounting fair value adjustment(2)	(49.0)				(52.3)
Total	Total	$	14,585.6			$	14,615.8							Total	$	14,926.0			$	14,868.9

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

(2)Amount includes the change in fair value due to changes in benchmark interest rates related to hedging our October 2023 notes and $350 million of our August 2029 notes. Refer to Note 23, 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 4.590% at January 1, 2023.

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

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The following table summarizes our long-term debt maturities as of January ~~2, 2022~~1, 2023 by fiscal year (in millions):


Fiscal Year	Fiscal Year	Total		Fiscal Year	Total

2022		$	1,000.0
2023	2023	1,000.0		2023	$	1,750.0
2024	2024	1,488.6		2024	1,139.0
2025	2025	1,250.0		2025	1,250.0
2026	2026	500.0		2026	500.0
2027				2027	500.0
Thereafter	Thereafter	9,450.0		Thereafter	9,950.0
Total	Total	$	14,688.6	Total	$	15,089.0

Note 8:9: Leases

~~Table of Contents~~

The components of lease costs (in millions):


		Quarter Ended				Quarter Ended
		Jan 2, 2022		Dec 27, 2020				Jan 1, 2023		Jan 2, 2022
Operating lease costs(1)	Operating lease costs(1)	$	386.1	$	409.4		Operating lease costs(1)	$	384.8	$	386.1
Variable lease costs	Variable lease costs	229.8		222.4			Variable lease costs	235.3		229.8
Short-term lease costs	Short-term lease costs	7.1		8.7			Short-term lease costs	7.0		7.1
Total lease costs	Total lease costs	$	623.0	$	640.5		Total lease costs	$	627.1	$	623.0

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

The following table includes supplemental information (in millions):


		Quarter Ended							Quarter Ended
		Jan 2, 2022			Dec 27, 2020				Jan 1, 2023			Jan 2, 2022
Cash paid related to operating lease liabilities	Cash paid related to operating lease liabilities	$	410.0		$	385.6		Cash paid related to operating lease liabilities	$	404.1		$	410.0
Operating lease liabilities arising from obtaining ROU assets	Operating lease liabilities arising from obtaining ROU assets	346.8			353.8			Operating lease liabilities arising from obtaining ROU assets	367.3			346.8

		Jan 2, 2022			Dec 27, 2020				Jan 1, 2023			Jan 2, 2022
Weighted-average remaining operating lease term	Weighted-average remaining operating lease term	8.6 years			8.8 years			Weighted-average remaining operating lease term	8.5 years			8.6 years
Weighted-average operating lease discount rate	Weighted-average operating lease discount rate	2.5		%	2.5		%	Weighted-average operating lease discount rate	2.7		%	2.5		%

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 January 1, 2023 and October 2, 2022.

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


Fiscal Year	Fiscal Year	Total		Fiscal Year	Total
2022 (excluding the quarter ended January 2, 2022)		$	1,127.4
2023		1,460.7
2023 (excluding the quarter ended January 1, 2023)				2023 (excluding the quarter ended January 1, 2023)	$	1,511.5
2024	2024	1,346.1		2024	1,472.9
2025	2025	1,200.5		2025	1,332.8
2026	2026	1,040.5		2026	1,177.8
2027				2027	975.4
Thereafter	Thereafter	3,880.4		Thereafter	3,600.2
Total lease payments	Total lease payments	10,055.6		Total lease payments	10,070.6
Less imputed interest	Less imputed interest	(1,094.3)		Less imputed interest	(1,177.7)
Total	Total	$	8,961.3	Total	$	8,892.9

As of January ~~2, 2022,~~1, 2023, we have entered into operating leases that have not yet commenced of ~~$925.8 million,~~$1.2 billion, primarily related to real estate leases. These leases will commence between fiscal year ~~2022~~2023 and fiscal year 2028 with lease terms ranging from ~~ten~~three to twenty years.

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Note 9:10: Deferred Revenue

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

As of January ~~2, 2022,~~1, 2023, the current and long-term deferred revenue related to Nestlé was ~~$177.9~~$177.0 million and ~~$6.4~~$6.1 billion, respectively. As of October ~~3, 2021,~~2, 2022, the current and long-term deferred revenue related to the Nestlé up-front payment was $177.0 million and ~~$6.4~~$6.2 billion, respectively. ~~For each~~During the quarter ended January 1, 2023, we recognized $44.1 million of prepaid royalty revenue related to Nestlé. During the ~~quarters~~quarter ended January 2, 2022, ~~and December 27, 2020,~~ we recognized $44.2 million of prepaid royalty revenue related to Nestlé.

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


Quarter Ended January 1, 2023	Total
Stored value cards and loyalty program at October 2, 2022	$	1,503.0
Revenue deferred - card activations, card reloads and Stars earned	4,223.4
Revenue recognized - card and Stars redemptions and breakage	(3,714.1)
Other(1)	13.3
Stored value cards and loyalty program at January 1, 2023(2)	$	2,025.6

Quarter Ended January 2, 2022	Total
Stored value cards and loyalty program at October 3, 2021	$	1,448.5
Revenue deferred - card activations, card reloads and Stars earned	3,917.5
Revenue recognized - card and Stars redemptions and breakage	(3,410.8)
Other(1)	(2.7)
Stored value cards and loyalty program at January 2, 2022(2)	$	1,952.5

~~Quarter Ended December 27, 2020~~	~~Total~~
~~Stored value cards and loyalty program at September 27, 2020~~	$	~~1,280.5~~
~~Revenue deferred - card activations, card reloads and Stars earned~~	~~3,437.4~~
~~Revenue recognized - card and Stars redemptions and breakage~~	~~(2,980.2)~~
~~Other(1)~~	~~12.3~~
~~Stored value cards and loyalty program at December 27, 2020(2)~~	$
	~~1,750.0~~

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

(2)As of January 1, 2023 and January 2, 2022, ~~and December 27, 2020,~~ approximately ~~$1.8~~$1.9 billion and ~~$1.6~~$1.8 billion of these amounts were current, respectively.

2221

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Note ~~10:~~11: 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
January 2, 2022
January 1, 2023												January 1, 2023
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) in AOCI, beginning of period	$	(15.5)	$	199.0	$	209.1	$	(855.8)	$	(463.2)
Net gains/(losses) recognized in OCI before reclassifications	Net gains/(losses) recognized in OCI before reclassifications	(2.6)		76.9		31.0		14.2		119.5		Net gains/(losses) recognized in OCI before reclassifications	1.5		(151.2)		(48.3)		208.9		10.9
Net (gains)/losses reclassified from AOCI to earnings	Net (gains)/losses reclassified from AOCI to earnings	(0.1)		(10.6)		(2.5)		—		(13.2)		Net (gains)/losses reclassified from AOCI to earnings	0.1		(82.7)		(4.0)		—		(86.6)
Other comprehensive income/(loss) attributable to Starbucks	Other comprehensive income/(loss) attributable to Starbucks	(2.7)		66.3		28.5		14.2		106.3		Other comprehensive income/(loss) attributable to Starbucks	1.6		(233.9)		(52.3)		208.9		(75.7)

Net gains/(losses) in AOCI, end of period	Net gains/(losses) in AOCI, end of period	$	(1.2)	$	224.6	$	77.1	$	(47.0)	$	253.5	Net gains/(losses) in AOCI, end of period	$	(13.9)	$	(34.9)	$	156.8	$	(646.9)	$	(538.9)

December 27, 2020
January 2, 2022												January 2, 2022
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	$	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	(0.4)		4.8		(22.6)		238.7		220.5		Net gains/(losses) recognized in OCI before reclassifications	(2.6)		76.9		31.0		14.2		119.5
Net (gains)/losses reclassified from AOCI to earnings	Net (gains)/losses reclassified from AOCI to earnings	(1.2)		1.8		(2.4)		—		(1.8)		Net (gains)/losses reclassified from AOCI to earnings	(0.1)		(10.6)		(2.5)		—		(13.2)
Other comprehensive income/(loss) attributable to Starbucks	Other comprehensive income/(loss) attributable to Starbucks	(1.6)		6.6		(25.0)		238.7		218.7		Other comprehensive income/(loss) attributable to Starbucks	(2.7)		66.3		28.5		14.2		106.3

Net gains/(losses) in AOCI, end of period	Net gains/(losses) in AOCI, end of period	$	4.1	$	(75.5)	$	(13.5)	$	(61.0)	$	(145.9)	Net gains/(losses) in AOCI, end of period	$	(1.2)	$	224.6	$	77.1	$	(47.0)	$	253.5

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
		Jan 2, 2022		Dec 27, 2020				Jan 1, 2023		Jan 2, 2022
Gains/(losses) on available-for-sale debt securities	Gains/(losses) on available-for-sale debt securities	$	0.2	$	1.5	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	12.5		(1.1)		Please refer to Note 2, Derivative Financial Instruments for additional information.	Gains/(losses) on cash flow hedges	93.3		12.5		Please refer to Note 3, Derivative Financial Instruments for additional information.
Gains/(losses) on net investment hedges	Gains/(losses) on net investment hedges	3.4		3.2		Interest expense	Gains/(losses) on net investment hedges	5.3		3.4		Interest expense

		16.1		3.6		Total before tax		98.4		16.1		Total before tax
		(2.9)		(1.8)		Tax (expense)/benefit		(11.8)		(2.9)		Tax expense
		$	13.2	$	1.8	Net of tax		$	86.6	$	13.2	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, none of which was outstanding as of January ~~2, 2022.~~1, 2023.

During the ~~quarter~~quarters ended January 1, 2023 and January 2, 2022, we repurchased 1.9 million and 31.1 million shares of common stock for $191.4 million and $3.5 ~~billion.~~billion, respectively. As of January ~~2, 2022, 17.8~~1, 2023, 50.6 million shares remained available for repurchase under current authorizations.

During the first quarter of fiscal ~~2022,~~2023, our Board of Directors approved a quarterly cash dividend to shareholders of ~~$0.49~~$0.53 per share to be paid on February ~~25, 2022~~24, 2023 to shareholders of record as of the close of business on February ~~11, 2022.~~10, 2023.

Note ~~11:~~12: Employee Stock Plans

As of January ~~2, 2022,~~1, 2023, there were ~~34.4~~91.8 million shares of common stock available for issuance pursuant to future equity-based compensation awards and ~~11.2~~10.7 million shares available for issuance under our employee stock purchase plan.

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


		Quarter Ended				Quarter Ended
		Jan 2, 2022		Dec 27, 2020				Jan 1, 2023		Jan 2, 2022
Restricted Stock Units (“RSUs”)	Restricted Stock Units (“RSUs”)	$	95.7	$	98.4		Restricted Stock Units (“RSUs”)	$	85.0	$	95.7
Options	Options	0.1		0.9			Options	0.1		0.1
Total stock-based compensation expense	Total stock-based compensation expense	$	95.8	$	99.3		Total stock-based compensation expense	$	85.1	$	95.8

Stock option and RSU transactions from October ~~3, 2021~~2, 2022 through January ~~2, 2022~~1, 2023 (in millions):


		Stock Options		RSUs			Stock Options		RSUs
Options outstanding/Nonvested RSUs, October 3, 2021		5.2		7.7
Options outstanding/Nonvested RSUs, October 2, 2022						Options outstanding/Nonvested RSUs, October 2, 2022	4.1		7.0
Granted	Granted	—		3.5		Granted	—		4.0
Options exercised/RSUs vested	Options exercised/RSUs vested	(0.6)		(3.2)		Options exercised/RSUs vested	(0.7)		(2.7)
Forfeited/expired	Forfeited/expired	—		(0.3)		Forfeited/expired	—		(0.2)
Options outstanding/Nonvested RSUs, January 2, 2022		4.6		7.7
Total unrecognized stock-based compensation expense, net of estimated forfeitures, as of January 2, 2022		$	—	$	311.9��
Options outstanding/Nonvested RSUs, January 1, 2023						Options outstanding/Nonvested RSUs, January 1, 2023	3.4		8.1
Total unrecognized stock-based compensation expense, net of estimated forfeitures, as of January 1, 2023						Total unrecognized stock-based compensation expense, net of estimated forfeitures, as of January 1, 2023	$	—	$	345.3

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

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


		Quarter Ended				Quarter Ended
		Jan 2, 2022		Dec 27, 2020				Jan 1, 2023		Jan 2, 2022
Net earnings attributable to Starbucks	Net earnings attributable to Starbucks	$	815.9	$	622.2		Net earnings attributable to Starbucks	$	855.2	$	815.9
Weighted average common shares outstanding (for basic calculation)	Weighted average common shares outstanding (for basic calculation)	1,169.6		1,175.0			Weighted average common shares outstanding (for basic calculation)	1,148.5		1,169.6
Dilutive effect of outstanding common stock options and RSUs	Dilutive effect of outstanding common stock options and RSUs	7.0		8.0			Dilutive effect of outstanding common stock options and RSUs	4.4		7.0
Weighted average common and common equivalent shares outstanding (for diluted calculation)	Weighted average common and common equivalent shares outstanding (for diluted calculation)	1,176.6		1,183.0			Weighted average common and common equivalent shares outstanding (for diluted calculation)	1,152.9		1,176.6
EPS — basic	EPS — basic	$	0.70	$	0.53		EPS — basic	$	0.74	$	0.70
EPS — diluted	EPS — diluted	$	0.69	$	0.53		EPS — diluted	$	0.74	$	0.69

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~~excludes anti-dilutive stock options ~~(i.e., such options’ exercise prices~~or RSU's, which were ~~greater than~~immaterial in the ~~average market price of our common shares for the period) because their inclusion would be anti-dilutive. As of January 2, 2022 and December 27, 2020, we had no out-of-the-money stock options.~~periods presented.

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

Legal Proceedings

~~On April 13,~~In 2010 and 2011, an organization named Council for Education and Research on Toxics (“Plaintiff”) filed ~~a lawsuit~~lawsuits in the Superior Court of the State of California, County of Los Angeles, against the Company and ~~certain~~ other ~~defendants~~companies 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~~suits were later consolidated into a single action. 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 majority of the coffee industry in California. Plaintiff alleges~~alleged 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~~sought equitable relief, including 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 alleged violation of Proposition ~~65. The~~65, which the Plaintiff ~~asserts that~~claimed was every ~~consumed cup of~~day coffee ~~absent~~is sold without a compliant ~~warning, is equivalent to a violation under Proposition 65.~~

warning. The Company ~~as part of a joint defense group organized to defend against~~denied the ~~lawsuit, disputes~~claims.

During the ~~claims~~pendency 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”)

~~Table of Contents~~

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,litigation, the California Office of Environmental Health Hazard Assessment ~~(OEHHA)~~(“OEHHA”) proposed a new regulation clarifying that cancer warnings are not required for coffee under Proposition 65. The ~~case~~regulation was ~~set to proceed to a third phase trial (“Phase 3”) on damages, remedies and attorneys' fees on October 15, 2018. However, on October 12, 2018,~~approved by the ~~California Court of Appeal granted the 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~~and 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,~~In 2020, the trial ~~judge~~court granted the defendants’ motion for summary judgment, ruling that the coffee exemption regulation is a complete defense to the Plaintiff’s complaint. On October 26, 2022, the California Court of Appeal affirmed the trial court's dismissal of the case. The ~~Notice~~Plaintiff’s subsequent request for a rehearing before the California Court of ~~Entry of Judgment from the court~~Appeals was ~~served on October 6, 2020, and the~~denied. On December 2, 2022 Plaintiff filed a ~~Notice of Appeal on November 20, 2020 and its opening brief~~petition for review in the ~~appeals process on April 9, 2021. Defendants~~California Supreme Court and Starbucks filed ~~their~~a response brief on ~~August 9, 2021, and Plaintiff filed a reply on November 15, 2021.~~December 22, 2022. 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 January ~~2, 2022,~~1, 2023, no loss contingency has been recorded for this matter.

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Starbucks is ~~party to~~involved in 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 ~~14:~~15: Segment Reporting

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

Consolidated revenue mix by product type (in millions):


		Quarter Ended								Quarter Ended
		Jan 2, 2022				Dec 27, 2020					Jan 1, 2023		Jan 2, 2022
Beverage(1)	Beverage(1)	$	4,898.4	61	%	$	4,251.9	63	%			Beverage(1)	$	5,173.0	59	%	$	4,898.4	61	%
Food(2)	Food(2)	1,434.6		18	%	1,140.8		17	%			Food(2)	1,565.9		18	%	1,434.6		18	%
Other(3)	Other(3)	1,717.4		21	%	1,356.7		20	%			Other(3)	1,975.0		23	%	1,717.4		21	%
Total	Total	$	8,050.4	100	%	$	6,749.4	100	%			Total	$	8,713.9	100	%	$	8,050.4	100	%

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

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

(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.

~~Table of Contents~~

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			North America		International		Channel Development		Corporate and Other		Total
January 2, 2022
January 1, 2023												January 1, 2023
Total net revenues	Total net revenues	$	5,732.3	$	1,875.9	$	417.1	$	25.1	$	8,050.4	Total net revenues	$	6,551.3	$	1,680.1	$	478.2	$	4.3	$	8,713.9
Depreciation and amortization expenses	Depreciation and amortization expenses	200.0		133.1		—		32.9		366.0		Depreciation and amortization expenses	216.9		81.5		—		28.7		327.1
Income from equity investees	Income from equity investees	—		0.7		39.6		—		40.3		Income from equity investees	—		0.5		57.3		—		57.8
Operating income/(loss)	Operating income/(loss)	1,083.1		299.6		183.2		(388.1)		1,177.8		Operating income/(loss)	1,212.4		240.4		226.3		(426.0)		1,253.1

December 27, 2020
January 2, 2022												January 2, 2022
Total net revenues	Total net revenues	$	4,675.6	$	1,681.9	$	371.4	$	20.5	$	6,749.4	Total net revenues	$	5,732.3	$	1,875.9	$	417.1	$	25.1	$	8,050.4
Depreciation and amortization expenses	Depreciation and amortization expenses	188.9		140.0		0.2		37.0		366.1		Depreciation and amortization expenses	200.0		133.1		—		32.9		366.0
Income from equity investees	Income from equity investees	—		26.3		56.4		—		82.7		Income from equity investees	—		0.7		39.6		—		40.3
Operating income/(loss)	Operating income/(loss)	802.8		283.0		180.8		(353.1)		913.5		Operating income/(loss)	1,083.1		299.6		183.2		(388.1)		1,177.8

~~(1)North America~~

Note 16: Subsequent Event

On January 13, 2023, Starbucks finalized the sale of the Seattle's Best Coffee brand to Nestlé and ~~International total net revenues~~will recognize a pre-tax gain of approximately $90 million in the second quarter of fiscal 2023. With the exception of recognizing the sale to Nestlé, we do not expect the transaction will have a material impact on our ongoing operations and ~~operating income and Corporate and Other operating loss for the quarter ended December 27, 2020, have been restated to conform with current period presentation.~~future financial results.

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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 contained herein are “forward-looking” statements within the meaning of ~~the Private Securities Litigation Reform Act of 1995.~~applicable securities laws and regulations. Generally, these statements can be identified by the use of words such as “aim,” “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “feel,” “forecast,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “will,” “would,” and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These statements include statements relating to trends in or expectations relating to the effects of our existing and any future initiatives, strategies, investments and plans, including our Reinvention Plan, 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~~inflationary pressures; impact of ~~our business,~~foreign currency translation; strategic pricing actions; the conversion of ~~several~~certain market operations to fully licensed ~~models,~~models; our plans for streamlining our operations, including store openings, closures and changes in store formats and ~~models, expanding~~models; the success of our licensing torelationship with Nestlé, of our consumer packaged goods and ~~Foodservice businesses~~foodservice business and its effects on our Channel Development segment ~~results,~~results; tax ~~rates,~~rates; business opportunities, expansions and ~~expansion,~~new initiatives, including Starbucks Odyssey; strategic ~~acquisitions,~~acquisitions; our ~~future relationship with Starbucks Coffee Korea Co., Ltd., expenses,~~ dividends ~~share repurchases,~~programs; commodity costs and our mitigation ~~strategies,~~strategies; 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,~~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 pandemic on our financial results and future availability of governmental subsidies for COVID-19 or other public health ~~events,~~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~~the continuing impact of COVID-19 ~~and related disruptions to~~on 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 and the circulation of novel variants of ~~COVID-19 in a given geographic region after it has hit its “peak”;~~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 including any union organizing efforts and our responses to such efforts; failure to attract or retain key executive or employee talent or successfully transition executives; 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; and the effects of changes in tax laws and related guidance and regulations that may be implemented, including the Inflation Reduction Act of 2022 and other risks detailed in our filings with the SEC, including in ~~Part I Item IA~~ “~~Risk Factors~~” in the ~~10-K.~~"Risk Factors” and “Management's Discussion and Analysis of Financial Condition and Results of Operations” sections of the company’s most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings.

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 filed with the SEC on November ~~19, 2021.~~18, 2022.

Introduction and Overview

Starbucks is the premier ~~coffee~~ roaster, marketer and retailer of specialty coffee ~~with operations~~in the world, operating in 84 ~~markets around the world.~~markets. As of January ~~2, 2022,~~1, 2023, Starbucks had ~~over 34,300~~more than 36,100 company-operated and licensed stores, an increase of 4%5% from the prior year. Additionally, we sell a variety of consumer-packaged goods, primarily through the Global Coffee Alliance established with Nestlé and other partnerships and joint ventures. During the quarter ended January ~~2, 2022,~~1, 2023, our global comparable store sales

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grew ~~13%~~5%, ~~demonstrating powerful momentum beyond recovery from the significant adverse impacts from the pandemic~~primarily driven by 10% growth in the ~~prior year period.~~U.S. market, partially offset by COVID-19 pandemic-related business conditions in China, leading to a 29% 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, 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 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 pandemic remain in comparable store sales while stores identified for permanent closure have been removed. ~~Additionally, we monitor our two-year comparable sales metric based on a multiplicative basis(1)~~ ~~to better analyze our performance due to the adverse impacts from the pandemic.~~

Our fiscal year ends on the Sunday closest to September 30. ~~Our fiscal~~Fiscal 2023 and 2022 ~~year includes~~included 52 ~~weeks while our fiscal 2021 year included 53~~ weeks. All references to store counts, including data for new store openings, are reported net of store closures, unless otherwise noted.

Starbucks results for the first quarter of fiscal ~~2022~~2023 demonstrate the overall strength and resilience of our ~~brand.~~brand, despite continued COVID-19 pandemic related disruptions in our China market and continued inflationary pressures. Consolidated net revenues increased ~~19%~~8% to $8.7 billion in the first quarter of fiscal 2023 compared to $8.1 billion in the first quarter of fiscal 2022, ~~compared to $6.7 billion in the first quarter of fiscal 2021,~~ primarily driven by strength in our U.S. business ~~attributable to strong holiday performance,~~and growth in our International segment excluding China, partially offset by ~~continued~~ COVID-19 pandemic related disruptions in ~~certain North America~~China and ~~International markets.~~unfavorable foreign currency translation. Consolidated operating margin ~~expanded 110~~decreased 20 basis points from the prior year to ~~14.6%~~14.4%, primarily ~~due to~~driven by previously committed investments in labor including enhanced store partner wages and benefits, inflationary pressures and sales ~~leverage from business recovery,~~deleverage in China, partially offset by strategic pricing in North America and ~~lower restructuring costs, partially offset by investments in store partner wages and benefits as well as inflation.~~sales leverage across markets outside of China.

For both the North America segment and our U.S. market, comparable store sales increased ~~18%~~10% for the first quarter of fiscal ~~2022~~2023 compared to ~~a decline~~an increase of 6%18% in the first quarter of fiscal ~~2021. Comparable store sales~~2022. Average ticket for ~~our~~both the North America segment and the U.S. market increased 18% for the first quarter of fiscal 2022 compared to a decline of 5% in the first quarter of fiscal 2021. The U.S. market also had a 12% increase in two-year comparable store sales, despite modified store operations related to the COVID-19 pandemic, which have been ongoing, whether intermittently or concentrated, since the COVID-19 pandemic began,grew 9%, primarily driven by strategic pricing. The segment also experienced higher ~~than anticipated~~ costs, primarily related to enhancements in retail store partner wages and benefits, as well as increased supply chain costs due to inflationary ~~pressures and increased spend on new partner training and support costs to address labor market conditions.~~pressures.

For the International segment, comparable store sales declined ~~3%, inclusive of a 3% adverse impact from lapping the prior-year value-added tax benefit. Comparable store sales for our China market declined 14%~~13% for the first quarter of fiscal ~~2022, inclusive~~2023, driven by comparable store sales decline of ~~a 4% adverse impact from lapping the prior-year value-added tax benefit. Our~~29% in our China market, ~~continued~~which experienced suppressed customer mobility and store closures due to ~~experience~~ pandemic-related restrictions ~~that significantly impacted customer mobility during~~and a spike in infections. These contributed to a decline in both revenue and operating margin for the ~~quarter, while~~segment. The unfavorable impacts were partially offset by strong growth in our ~~other International~~major international markets ~~were not as severely impacted.~~outside of China.

Net revenues for our Channel Development segment increased ~~$46~~$61 million, or ~~12%~~15%, when compared with the first quarter of fiscal ~~2021.~~2022. This was ~~largely~~ due to higher product sales to and royalty revenue from the Global Coffee Alliance and growth in our ~~international~~ ready-to-drink business.

Despite COVID-19 induced business interruptions in our China market, we have seen the strength and resilience of our brand as well as strong customer demand across our portfolio. While we anticipate continued inflationary pressure, albeit to a lesser extent than in fiscal 2022, and COVID-related interruptions in the China market, we expect improved financial performance in the second half of fiscal 2023, driven by sales leverage, pricing, productivity gains from Reinvention, as well as recovery in China. Absent significant and prolonged COVID-19 relapses or global economic disruptions, we believe our strategy will result in sustainable and ~~based on~~profitable growth over the current trend of our retail business operations and our focused efforts to expand contactless customer experiences, enhance digital capabilities and drive beverage innovation, we are confident in the strength of our brand and the durability of our long-term growth model. However, our business is experiencing, and expects to continue to experience, operating margin pressures such as accelerated inflation, increased spend due to labor market conditions and extended COVID-19 related pay and benefits for our partners. We believe we have plans to effectively mitigate these pressures, such as improving retail store operations and potential adjustments to pricing. However, if our mitigation plans are not effective, these pressures and other factors could have an adverse impact on our business.long-term.

~~(1)~~

Two-year comparable store sales metric is calculated as ((1 + % change in comparable store sales in FY21) * (1 + % change in comparable store sales in FY22)) - 1. Two-year comparable store sales for the U.S. of 12% = ((1 + (-5%)) * (1 + 18%)) - 1.

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Results of Operations (in millions)

Revenues


		Quarter Ended								Quarter Ended
		Jan 2, 2022		Dec 27, 2020		$ Change		% Change				Jan 1, 2023		Jan 2, 2022		$ Change		% Change
Company-operated stores	Company-operated stores	$	6,722.4	$	5,726.5	$	995.9	17.4	%		Company-operated stores	$	7,083.5	$	6,722.4	$	361.1	5.4	%
Licensed stores	Licensed stores	850.8		613.8		237.0		38.6			Licensed stores	1,119.5		850.8		268.7		31.6
Other	Other	477.2		409.1		68.1		16.6			Other	510.9		477.2		33.7		7.1
Total net revenues	Total net revenues	$	8,050.4	$	6,749.4	$	1,301.0	19.3	%		Total net revenues	$	8,713.9	$	8,050.4	$	663.5	8.2	%

For the quarter ended January ~~2, 2022~~1, 2023 compared with the quarter ended ~~December 27, 2020~~January 2, 2022

Total net revenues for the first quarter of fiscal ~~2022~~2023 increased ~~$1.3 billion,~~$664 million, primarily due to higher revenues from company-operated stores ($~~1.0 billion)~~361 million). The growth of company-operated stores revenue was driven by a ~~13%~~5% increase in comparable store sales ($~~719~~328 million), attributable to a ~~10% increase in comparable transactions and a 3%~~7% increase in average ~~ticket.~~ticket offset by a 2% decrease in comparable transactions. Also contributing ~~to the increase were~~was incremental revenues from ~~664~~1,005 net new Starbucks® company-operated stores, or a 4%6% increase, over the past 12 months ($~~254~~259 million). Partially offsetting these increases was unfavorable foreign currency translation ($225 million).

Licensed stores revenue increased ~~$237~~$269 million ~~also contributed~~contributing to the increase in total net revenues, driven by higher product and equipment sales to and royalty revenues from our licensees ($~~206~~299 million) ~~and the conversion of our Korea market from a joint venture to a fully licensed market in the fourth quarter of fiscal 2021~~. Partially offsetting this increase was unfavorable foreign currency translation ($3935 million).

Other revenues increased ~~$68~~$34 million, primarily due to higher product sales and royalty revenue in the Global Coffee ~~Alliance and growth in our international ready-to-drink business.~~Alliance.

Operating Expenses


		Quarter Ended										Quarter Ended
		Jan 2, 2022		Dec 27, 2020		$ Change		Jan 2, 2022		Dec 27, 2020				Jan 1, 2023		Jan 2, 2022		$ Change		Jan 1, 2023		Jan 2, 2022
								As a % of Total Net Revenues										As a % of Total Net Revenues
Product and distribution costs	Product and distribution costs	$	2,526.9	$	2,049.1	$	477.8	31.4	%	30.4	%		Product and distribution costs	$	2,810.2	$	2,526.9	$	283.3	32.2	%	31.4	%
Store operating expenses	Store operating expenses	3,400.0		2,867.3		532.7		42.2		42.5			Store operating expenses	3,665.3		3,400.0		265.3		42.1		42.2
Other operating expenses	Other operating expenses	101.7		91.8		9.9		1.3		1.4			Other operating expenses	129.3		101.7		27.6		1.5		1.3
Depreciation and amortization expenses	Depreciation and amortization expenses	366.0		366.1		(0.1)		4.5		5.4			Depreciation and amortization expenses	327.1		366.0		(38.9)		3.8		4.5
General and administrative expenses	General and administrative expenses	525.8		472.1		53.7		6.5		7.0			General and administrative expenses	580.9		525.8		55.1		6.7		6.5
Restructuring and impairments	Restructuring and impairments	(7.5)		72.2		(79.7)		(0.1)		1.1			Restructuring and impairments	5.8		(7.5)		13.3		0.1		(0.1)

Total operating expenses	Total operating expenses	6,912.9		5,918.6		994.3		85.9	%	87.7	%		Total operating expenses	7,518.6		6,912.9		605.7		86.3		85.9
Income from equity investees	Income from equity investees	40.3		82.7		(42.4)		0.5		1.2			Income from equity investees	57.8		40.3		17.5		0.7		0.5
Operating income	Operating income	$	1,177.8	$	913.5	$	264.3	14.6	%	13.5	%		Operating income	$	1,253.1	$	1,177.8	$	75.3	14.4	%	14.6	%
Store operating expenses as a % of company-operated stores revenue	Store operating expenses as a % of company-operated stores revenue							50.6	%	50.1	%		Store operating expenses as a % of company-operated stores revenue							51.7	%	50.6	%

For the quarter ended January ~~2, 2022~~1, 2023 compared with the quarter ended ~~December 27, 2020~~January 2, 2022

Product and distribution costs as a percentage of total net revenues increased ~~100~~80 basis points for the first quarter of fiscal ~~2022,~~2023, primarily due to higher supply chain costs ~~due to~~driven by inflationary ~~pressures (approximately 180 basis points) and product mix changes (approximately 40 basis points), partially offset by pricing in North America (approximately 150 basis points).~~pressures.

Store operating expenses as a percentage of total net revenues decreased 3010 basis points for the first quarter of fiscal ~~2022.~~2023. Store operating expenses as a percentage of company-operated stores revenue increased 50110 basis points, primarily due to enhancements in retail store partner wages and benefits (approximately ~~180~~350 basis points) and increased spend on new partner training ~~and support costs to address labor market conditions~~ (approximately ~~110~~60 basis points), partially offset by sales ~~leverage from business recovery.~~leverage.

Other operating expenses increased $28 million for the first quarter of fiscal 2023, primarily due to higher support costs for our growing licensed markets ($8 million) and strategic investments in technology and other initiatives ($8 million).

Depreciation and amortization expenses as a percentage of total net revenues decreased 9070 basis points, primarily due to ~~sales leverage.~~lapping amortization expenses of acquisition-related intangibles assets.

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General and administrative expenses increased ~~$54~~$55 million, primarily due to incremental investments in technology ($2928 million) and increased ~~partner wages~~support costs to address labor market conditions and ~~benefits~~leadership training ($~~19 million), partially offset by lower performance-based compensation ($8 million).~~

Restructuring and impairment expenses decreased $80 million, primarily due to lapping our North America store portfolio optimization in the prior year, specifically lower asset impairment charges ($41 million) and accelerated lease right-of-use asset amortization costs ($3917 million).

Income from equity investees ~~decreased $42~~increased $18 million, primarily due to ~~the conversion of our Korea market from a joint venture to a fully licensed market in the fourth quarter of fiscal 2021 ($27 million) and lower~~higher income from our North American Coffee Partnership joint ~~venture ($17 million).~~venture.

The combination of these changes resulted in an overall ~~increase~~decrease in operating margin of ~~110~~20 basis points for the first quarter of fiscal ~~2022.~~2023.

Other Income and Expenses


		Quarter Ended										Quarter Ended
		Jan 2, 2022		Dec 27, 2020		$ Change		Jan 2, 2022		Dec 27, 2020				Jan 1, 2023		Jan 2, 2022		$ Change		Jan 1, 2023		Jan 2, 2022
								As a % of Total Net Revenues										As a % of Total Net Revenues
Operating income	Operating income	$	1,177.8	$	913.5	$	264.3	14.6	%	13.5	%		Operating income	$	1,253.1	$	1,177.8	$	75.3	14.4	%	14.6	%

Interest income and other, net	Interest income and other, net	(0.1)		15.5		(15.6)		—		0.2			Interest income and other, net	11.6		(0.1)		11.7		0.1		—
Interest expense	Interest expense	(115.3)		(120.7)		5.4		(1.4)		(1.8)			Interest expense	(129.7)		(115.3)		(14.4)		(1.5)		(1.4)
Earnings before income taxes	Earnings before income taxes	1,062.4		808.3		254.1		13.2		12.0			Earnings before income taxes	1,135.0		1,062.4		72.6		13.0		13.2
Income tax expense	Income tax expense	246.3		186.1		60.2		3.1		2.8			Income tax expense	279.8		246.3		33.5		3.2		3.1
Net earnings including noncontrolling interests	Net earnings including noncontrolling interests	816.1		622.2		193.9		10.1		9.2			Net earnings including noncontrolling interests	855.2		816.1		39.1		9.8		10.1
Net earnings attributable to noncontrolling interests	Net earnings attributable to noncontrolling interests	0.2		—		0.2		—		—			Net earnings attributable to noncontrolling interests	—		0.2		(0.2)		—		—
Net earnings attributable to Starbucks	Net earnings attributable to Starbucks	$	815.9	$	622.2	$	193.7	10.1	%	9.2	%		Net earnings attributable to Starbucks	$	855.2	$	815.9	$	39.3	9.8	%	10.1	%
Effective tax rate including noncontrolling interests	Effective tax rate including noncontrolling interests							23.2	%	23.0	%		Effective tax rate including noncontrolling interests							24.6	%	23.2	%

For the quarter ended January ~~2, 2022~~1, 2023 compared with the quarter ended ~~December 27, 2020~~January 2, 2022

Interest income and other, net ~~decreased $16~~increased $12 million, primarily due to ~~higher~~lower net losses from certain investments.

Interest expense ~~decreased $5~~increased $14 million, primarily due to ~~lower~~rising interest rates on floating rate debt ~~balances attributed to repayments of short-term~~ and ~~current portion of~~additional interest incurred on long-term debt ~~balances.~~issued in February 2022.

The effective tax rate for the quarter ended January 1, 2023 was 24.6% compared to 23.2% for the same period in fiscal 2022. The increase was primarily due to a decrease in stock-based compensation excess tax benefits (approximately 150 basis points).

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Segment Information

Results of operations by segment (in millions):

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North America~~(1)~~


		Quarter Ended										Quarter Ended
		Jan 2, 2022		Dec 27, 2020		$ Change		Jan 2, 2022		Dec 27, 2020				Jan 1, 2023		Jan 2, 2022		$ Change		Jan 1, 2023		Jan 2, 2022
								As a % of North America Total Net Revenues										As a % of North America Total Net Revenues
Net revenues:	Net revenues:												Net revenues:
Company-operated stores	Company-operated stores	$	5,214.1	$	4,284.8	$	929.3	91.0	%	91.6	%		Company-operated stores	$	5,870.6	$	5,214.1	$	656.5	89.6	%	91.0	%
Licensed stores	Licensed stores	515.9		388.6		127.3		9.0		8.3			Licensed stores	680.0		515.9		164.1		10.4		9.0
Other	Other	2.3		2.2		0.1		—		—			Other	0.7		2.3		(1.6)		—		—
Total net revenues	Total net revenues	5,732.3		4,675.6		1,056.7		100.0		100.0			Total net revenues	6,551.3		5,732.3		819.0		100.0		100.0
Product and distribution costs	Product and distribution costs	1,629.4		1,260.6		368.8		28.4		27.0			Product and distribution costs	1,917.6		1,629.4		288.2		29.3		28.4
Store operating expenses	Store operating expenses	2,702.4		2,238.8		463.6		47.1		47.9			Store operating expenses	3,031.4		2,702.4		329.0		46.3		47.1
Other operating expenses	Other operating expenses	48.2		41.5		6.7		0.8		0.9			Other operating expenses	65.6		48.2		17.4		1.0		0.8
Depreciation and amortization expenses	Depreciation and amortization expenses	200.0		188.9		11.1		3.5		4.0			Depreciation and amortization expenses	216.9		200.0		16.9		3.3		3.5
General and administrative expenses	General and administrative expenses	76.7		70.8		5.9		1.3		1.5			General and administrative expenses	102.3		76.7		25.6		1.6		1.3
Restructuring and impairments	Restructuring and impairments	(7.5)		72.2		(79.7)		(0.1)		1.5			Restructuring and impairments	5.1		(7.5)		12.6		0.1		(0.1)
Total operating expenses	Total operating expenses	4,649.2		3,872.8		776.4		81.1		82.8			Total operating expenses	5,338.9		4,649.2		689.7		81.5		81.1

Operating income	Operating income	$	1,083.1	$	802.8	$	280.3	18.9	%	17.2	%		Operating income	$	1,212.4	$	1,083.1	$	129.3	18.5	%	18.9	%
Store operating expenses as a % of company-operated stores revenue	Store operating expenses as a % of company-operated stores revenue							51.8	%	52.2	%		Store operating expenses as a % of company-operated stores revenue							51.6	%	51.8	%

~~(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 ended December 27, 2020, have been restated to conform with current period presentation.

For the quarter ended January ~~2, 2022~~1, 2023 compared with the quarter ended ~~December 27, 2020~~January 2, 2022

Revenues

North America total net revenues for the first quarter of fiscal ~~2022~~2023 increased ~~$1.1 billion,~~$819 million, or ~~23%~~14%, primarily due to ~~an 18%~~a 10% increase in comparable store sales ($~~762~~498 million) driven by a ~~12% increase in transactions and a 6%~~9% increase in average ~~ticket.~~ticket and a 1% increase in transactions. Also contributing to these increases were the performance of net new ~~stores compared to~~company-operated store openings over the ~~closure of underperforming stores in prior year including stores related to our restructuring plan~~past 12 months ($~~140~~183 million) and higher product and equipment sales to and royalty revenues from our licensees ($~~130~~160 million) ~~primarily due to business recovery from the COVID-19 pandemic.~~.

Operating Margin

North America operating income for the first quarter of fiscal ~~2022~~2023 increased ~~35%~~12% to $1.2 billion, compared to $1.1 billion ~~compared to $803 million~~ in the first quarter of fiscal ~~2021.~~2022. Operating margin ~~increased 170~~decreased 40 basis points to ~~18.9%~~18.5%, primarily due to sales leverage from business recovery. Also contributing to the margin improvement was pricing (approximately 210 basis points), lower restructuring expenses (approximately 170 basis points), sourcing savings (approximately 70 basis points) and benefits from the closure of lower-performing stores (approximately 70 basis points). These increases were partially offset by higher supply chain costs due to inflationary pressures (approximately 240 basis points),investments in labor, including enhancements in retail store partner wages and benefits (approximately ~~190~~390 basis points), inflationary pressures on commodities and our supply chain (approximately 210 basis points), as well as increased spend on new partner training ~~and support costs to address labor market conditions~~ (approximately ~~130~~70 basis points). These were partially offset by strategic pricing (approximately 510 basis points) and sales leverage.

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International~~(1)~~
Quarter Ended
Jan 2,
2022 Dec 27,
2020
$
Change
Jan 2,
2022 Dec 27,
2020
As a % of International
Total Net Revenues
Net revenues:
Company-operated stores $ 1,508.3 $ 1,441.7 $ 66.6 80.4 % 85.7 %
Licensed stores 334.9 225.2 109.7 17.9 13.4
Other 32.7 15.0 17.7 1.7 0.9
Total net revenues 1,875.9 1,681.9 194.0 100.0 100.0
Product and distribution costs 615.8 536.0 79.8 32.8 31.9
Store operating expenses 697.6 628.5 69.1 37.2 37.4
Other operating expenses 39.2 35.6 3.6 2.1 2.1
Depreciation and amortization expenses 133.1 140.0 (6.9) 7.1 8.3
General and administrative expenses 91.3 85.1 6.2 4.9 5.1
Total operating expenses 1,577.0 1,425.2 151.8 84.1 84.7
Income from equity investees 0.7 26.3 (25.6) — 1.6
Operating income $ 299.6 $ 283.0 $ 16.6 16.0 % 16.8 %
Store operating expenses as a % of company-operated stores revenue 46.3 % 43.6 %

~~(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 ended December 27, 2020, have been restated to conform with current period presentation.


	Quarter Ended
	Jan 1, 2023		Jan 2, 2022		$ Change		Jan 1, 2023		Jan 2, 2022
							As a % of International Total Net Revenues
Net revenues:
Company-operated stores	$	1,212.9	$	1,508.3	$	(295.4)	72.2	%	80.4	%
Licensed stores	439.5		334.9		104.6		26.2		17.9
Other	27.7		32.7		(5.0)		1.6		1.7
Total net revenues	1,680.1		1,875.9		(195.8)		100.0		100.0
Product and distribution costs	593.6		615.8		(22.2)		35.3		32.8
Store operating expenses	633.9		697.6		(63.7)		37.7		37.2
Other operating expenses	50.7		39.2		11.5		3.0		2.1
Depreciation and amortization expenses	81.5		133.1		(51.6)		4.9		7.1
General and administrative expenses	80.5		91.3		(10.8)		4.8		4.9

Total operating expenses	1,440.2		1,577.0		(136.8)		85.7		84.1
Income from equity investees	0.5		0.7		(0.2)		—		—
Operating income	$	240.4	$	299.6	$	(59.2)	14.3	%	16.0	%
Store operating expenses as a % of company-operated stores revenue							52.3	%	46.3	%

For the quarter ended January ~~2, 2022~~1, 2023 compared with the quarter ended ~~December 27, 2020~~January 2, 2022

Revenues

International total net revenues for the first quarter of fiscal ~~2022 increased $194~~2023 decreased $196 million, or ~~12%~~10%, primarily due to ~~774 net new Starbucks company-operated~~unfavorable foreign currency translation ($236 million), as well as a 13% decline in comparable store ~~openings, or~~sales ($170 million), driven by a 12% ~~increase over the past 12 months ($113 million). Additionally, there~~decrease in customer transactions and a 1% decrease in average ticket, primarily attributable to COVID-19 pandemic related disruptions in China. These decreases were partially offset by higher product and equipment sales to and royalty revenues from our licensees ($76139 million) primarily due to lapping the impact of the COVID-19 pandemic in the prior year. Also contributing to the increase was the conversion of our Korea market from a joint venture to a fully licensed market in the fourth quarter of fiscal 2021 ($39 million). These increases were partially offset by a 3% decline in comparable store sales ($43 million), ~~driven by a 5% decrease in average ticket, partially offset by a 2% increase in transactions,~~ as well as ~~unfavorable foreign currency translation~~649 net new company-operated store openings, or 9% increase, over the past 12 months ($1776 million).

Operating Margin

International operating income for the first quarter of fiscal ~~2022 increased 6%~~2023 decreased 20% to ~~$300~~$240 million, compared to ~~$283~~$300 million in the first quarter of fiscal ~~2021.~~2022. Operating margin decreased 80170 basis points to ~~16.0%~~14.3%, primarily due to ~~investments and growth~~sales deleverage related to COVID-19 pandemic related impacts in ~~retail store partner wages and benefits~~our China market (approximately ~~150 basis points), strategic investments, largely in China (approximately 110~~650 basis points) and ~~product mix changes~~higher commodity and supply chain costs due to inflationary pressures (approximately 9070 basis points). These decreases were partially offset by sales leverage across markets outside of China ~~driven by~~(approximately 240 basis points) the resulting business mix (approximately 140 basis points), as well as lapping ~~the more severe impact~~amortization expenses of ~~the COVID-19 pandemic in the prior year.~~acquisition-related intangibles assets that are now fully amortized (approximately 230 basis points).

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Channel Development


		Quarter Ended										Quarter Ended
		Jan 2, 2022		Dec 27, 2020		$ Change		Jan 2, 2022		Dec 27, 2020				Jan 1, 2023		Jan 2, 2022		$ Change		Jan 1, 2023		Jan 2, 2022
								As a % of Channel Development Total Net Revenues										As a % of Channel Development Total Net Revenues
Net revenues	Net revenues	$	417.1	$	371.4	$	45.7						Net revenues	$	478.2	$	417.1	$	61.1
Product and distribution costs	Product and distribution costs	258.8		233.5		25.3		62.0	%	62.9	%		Product and distribution costs	294.2		258.8		35.4		61.5	%	62.0	%
Other operating expenses	Other operating expenses	11.4		11.1		0.3		2.7		3.0			Other operating expenses	13.0		11.4		1.6		2.7		2.7
Depreciation and amortization expenses		—		0.2		(0.2)		—		0.1

General and administrative expenses	General and administrative expenses	3.3		2.2		1.1		0.8		0.6			General and administrative expenses	2.0		3.3		(1.3)		0.4		0.8
Total operating expenses	Total operating expenses	273.5		247.0		26.5		65.6		66.5			Total operating expenses	309.2		273.5		35.7		64.7		65.6
Income from equity investees	Income from equity investees	39.6		56.4		(16.8)		9.5		15.2			Income from equity investees	57.3		39.6		17.7		12.0		9.5
Operating income	Operating income	$	183.2	$	180.8	$	2.4	43.9	%	48.7	%		Operating income	$	226.3	$	183.2	$	43.1	47.3	%	43.9	%

For the quarter ended January ~~2, 2022~~1, 2023 compared with the quarter ended ~~December 27, 2020~~January 2, 2022

Revenues

Channel Development total net revenues for the first quarter of fiscal ~~2022~~2023 increased ~~$46~~$61 million, or ~~12%~~15%, primarily due to higher Global Coffee Alliance product sales and royalty revenue ($3143 million) and ~~volume~~ growth in our ready-to-drink ~~businesses~~business ($1626 million).

Operating Margin

Channel Development operating income for the first quarter of fiscal ~~2022~~2023 increased 1%24% to ~~$183~~$226 million, compared to ~~$181~~$183 million in the first quarter of fiscal ~~2021.~~2022. Operating margin ~~decreased 480~~increased 340 basis points to ~~43.9%~~47.3%, primarily due to ~~a decline~~growth in our North American Coffee Partnership joint venture ~~income due to supply chain constraints and inflationary pressures as well as a business mix shift.~~income.

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Corporate and Other~~(1)~~
Quarter Ended
Jan 2,
2022 Dec 27,
2020
$
Change
%
Change
Net revenues:
Other $ 25.1 $ 20.5 $ 4.6 22.4 %
Total net revenues 25.1 20.5 4.6 22.4
Product and distribution costs 22.9 19.0 3.9 20.5
Other operating expenses 2.9 3.6 (0.7) (19.4)
Depreciation and amortization expenses 32.9 37.0 (4.1) (11.1)
General and administrative expenses 354.5 314.0 40.5 12.9
Total operating expenses 413.2 373.6 39.6 10.6
Operating loss $ (388.1) $ (353.1) $ (35.0) 9.9 %

~~(1)~~Corporate and other general and administrative expenses, total operating expenses and operating loss for the fiscal year ended December 27, 2020, have been restated to conform with current period presentation.


	Quarter Ended
	Jan 1, 2023		Jan 2, 2022		$ Change		% Change
Net revenues:


Other	$	4.3	$	25.1	$	(20.8)	(82.9)	%
Total net revenues	4.3		25.1		(20.8)		(82.9)
Product and distribution costs	4.8		22.9		(18.1)		(79.0)

Other operating expenses	—		2.9		(2.9)		nm
Depreciation and amortization expenses	28.7		32.9		(4.2)		(12.8)
General and administrative expenses	396.1		354.5		41.6		11.7
Restructuring and impairments	0.7		—		0.7		nm
Total operating expenses	430.3		413.2		17.1		4.1

Operating loss	$	(426.0)	$	(388.1)	$	(37.9)	9.8	%

Corporate and Other primarily consists of our unallocated corporate expenses ~~as well as~~and Evolution ~~Fresh.~~Fresh, prior to its sale in the fourth quarter of fiscal 2022. 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 January ~~2, 2022~~1, 2023 compared with the quarter ended ~~December 27, 2020~~January 2, 2022

Corporate and Other operating loss increased to $426 million for the first quarter of fiscal 2023, or 10%, compared to $388 million for the first quarter of fiscal ~~2022, or 10%, compared to $353 million for the first quarter of fiscal 2021.~~2022. This increase was primarily driven by incremental investments in technology ($2228 million) and increased ~~partner wages and benefits~~support costs to address labor market conditions ($9 million).

These increases were partially offset by lower performance based compensation ($12 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			Net stores opened/(closed) and transferred during the period
		Quarter Ended		Stores open as of			Quarter Ended					Stores open as of
		Jan 2, 2022	Dec 27, 2020			Jan 2, 2022		Dec 27, 2020		Jan 1, 2023	Jan 2, 2022		Jan 1, 2023	Jan 2, 2022
North America	North America								North America
Company-operated stores	Company-operated stores	39	(80)			9,900		10,029	Company-operated stores	40	39		10,256	9,900
Licensed stores	Licensed stores	23	30			6,988		6,861	Licensed stores	46	23		7,125	6,988
Total North America ~~(1)~~	Total North America ~~(1)~~	62	(50)			16,888		16,890	Total North America ~~(1)~~	86	62		17,381	16,888
International	International								International
Company-operated stores	Company-operated stores	213	185			7,485		6,713	Company-operated stores	97	213		8,134	7,485
Licensed stores	Licensed stores	209	143			9,944		9,335	Licensed stores	276	209		10,655	9,944
Total International ~~(1)~~	Total International ~~(1)~~	422	328			17,429		16,048	Total International ~~(1)~~	373	422		18,789	17,429

Total Company	Total Company	484	278			34,317		32,938	Total Company	459	484		36,170	34,317

~~(1)North America and International licensed stores as of December 27, 2020, have been recast as a result of our fiscal 2021 operating segment reporting structure realignment.~~

Financial Condition, Liquidity and Capital Resources

Cash and Investment Overview

Our cash and investments totaled ~~$4.4~~$3.6 billion as of January ~~2, 2022~~1, 2023 and ~~$6.9~~$3.5 billion as of October ~~3, 2021.~~2, 2022. 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, government treasury securities (foreign and domestic) and commercial ~~paper.~~paper as well as principal-protected structured deposits. As of January ~~2, 2022,~~1, 2023, approximately ~~$3.0~~$2.7 billion of cash ~~was~~and short-term investment were held in foreign subsidiaries.

Borrowing Capacity

Revolving Credit Facility

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 ~~0.025%~~0.500%, (ii) Bank of America’s prime rate and (iii) the Eurocurrency Rate (as defined in the 2021 credit facility) plus ~~1.025%~~1.000%.

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 2021 credit facility discussed above. 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 January 1, 2023, we had no borrowings outstanding under our commercial paper program. As of October 2, 2022, we had ~~$200.0~~$175.0 million in borrowings outstanding

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~~borrowings outstanding~~ under ~~our commercial paper~~this program. Our total contractual borrowing capacity for general corporate purposes was ~~$2.8~~$3.0 billion as of the end of our first quarter of fiscal ~~2022.~~2023.

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 January 1, 2023 and October 2, 2022, we had no borrowings outstanding under these Japanese yen-denominated credit facilities.

See Note 7,8, 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 long-term notes were issued. As of January ~~2, 2022,~~1, 2023, 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. 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.~~repurchases as well as investing in new business opportunities. If necessary, we may pursue additional sources of 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. WeWhile we do not anticipate the need for repatriated funds to the U.S. to satisfy domestic liquidity ~~needs.~~requirements, any foreign earnings which are not indefinitely reinvested may be repatriated at management’s discretion.

During the first quarter of fiscal ~~2022,~~2023, we resumed our share repurchase program which was temporarily suspended in ~~March 2020.~~April 2022. During the quarter ended January ~~2, 2022,~~1, 2023, we repurchased ~~31.1~~1.9 million shares of common stock for ~~$3.5 billion.~~$191.4 million. As of January ~~2, 2022, 17.8~~1, 2023, 50.6 million shares remained available for repurchase under current authorizations.

Other than normal operating expenses, cash requirements for the remainder of fiscal ~~2022~~2023 are expected to consist primarily of capital expenditures for investments in our new and existing stores, ~~and~~ our supply chain and corporate facilities. Total capital expenditures for fiscal ~~2022~~2023 are expected to be approximately ~~$2.0~~$2.5 billion.

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In ~~Management's Discussion and Analysis of Financial Condition and Results of Operations~~the MD&A included in the 10-K, we disclosed that we had ~~$33.7~~$33.2 billion of current and long-term material cash requirements as of October ~~3, 2021.~~2, 2022. There have been no

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material changes to our material cash requirements during the period covered by this 10-Q outside of the normal course of our business.

Cash Flows

Cash provided by operating activities was ~~$1.9~~$1.6 billion for the first quarter of fiscal ~~2022,~~2023, compared to ~~$1.8~~$1.9 billion for the same period in fiscal ~~2021.~~2022. The ~~increase~~change was primarily due to ~~higher net earnings, partially offset by~~the timing of payments, lower ~~losses on retirement~~non-cash depreciation and ~~impairment of assets~~amortization expenses in current year, and ~~increases in~~ net cash used by changes in other operating assets and liabilities.

Cash used in investing activities for the first quarter of fiscal ~~2022~~2023 totaled ~~$401~~$279 million, compared to cash used in investing activities of ~~$273~~$401 million for the same period in fiscal ~~2021.~~2022. The change was primarily due to aan increase in maturities and calls of investments, partially offset by higher spend on capital expenditures.

Cash used in financing activities for the first quarter of fiscal ~~2022~~2023 totaled ~~$4.0~~$1.0 billion compared to cash used byin financing activities of ~~$1.0~~$4.0 billion for the same period in fiscal ~~2021.~~2022. The ~~increase was~~change is primarily due to ~~resuming our~~a decrease in share repurchase ~~program,~~ ~~partially offset by lower repayments of long-term debt~~.activities.

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 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.

Critical Accounting Estimates

The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that affect the amounts reported. 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 and in the Notes to Consolidated Financial Statements in Part II, Item 8 of the 10-K describe the significant accounting policies and methods used in the preparation of the Company’s consolidated financial statements. There have been no material changes to the Company’s critical accounting estimates since the 10-K.

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.

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.

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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 first quarter of fiscal ~~2022,~~2023, 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. 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 (January ~~2, 2022)~~1, 2023).

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.

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~~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 1314, 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 ~~2021 Form~~ 10-K ~~which could materially adversely affect our business, financial condition, or future results. The information presented below updates,~~ and ~~should be read in conjunction with, the risk factors disclosed in our 2021 Form 10-K. Otherwise, except as presented below, there~~Part II, Item 1A. There have been no material changes to the risk factors disclosed in our ~~2021 Form~~ 10-K.

~~Changes in the availability of and the cost of labor could adversely affect our business.~~

Our business could be adversely impacted by increases in labor costs, including wages and benefits, which, in a retail business such as ours, are two of our most significant costs, both domestically and internationally, including those increases triggered by regulatory actions regarding wages, scheduling and benefits; increased health care and workers’ compensation insurance costs; increased wages and costs of other benefits necessary to attract and retain high quality employees with the right skill sets and increased wages, benefits and costs related to the COVID-19 pandemic and inflationary and other pressure on wages now being experienced. The growth of our business can make it increasingly difficult to locate and hire sufficient numbers of employees, to maintain an effective system of internal controls for a globally dispersed enterprise and to train employees worldwide to deliver a consistently high-quality product and customer experience, which could materially harm our business and results of operations. Furthermore, we have experienced, and could continue to experience, a shortage of labor for store positions, including due to concerns around and illnesses arising from COVID-19 and its various novel variants and other factors, which could decrease the pool of available qualified talent for key functions and require stores to operate on reduced hours. Such labor shortages could be further exacerbated by expanded federal, state and local COVID-19 vaccination requirements. In addition, our wages and benefits programs may be insufficient to attract and retain the best talent especially in a rising wage market. Furthermore, while the number of partners represented by unions is not significant, if a significant portion of our employees were to become unionized, our labor costs could increase and our business could be negatively affected by other requirements and expectations that could increase our costs, change our employee culture, decrease our flexibility and disrupt our business. In December 2021, Starbucks partners at two stores in New York voted in favor of union representation and soon after stores in multiple jurisdictions across the United States have filed for unionization with the National Labor Relation Board with more that may follow. Further, our responses to any union organizing efforts could negatively impact how our brand is perceived and have adverse effects on our business, including on our financial results.

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

Information regarding repurchases of our common stock during the quarter ended January ~~2, 2022:~~1, 2023:

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)
October 4, 2021 - October 31, 2021 — $ — — 48,904,441
November 1, 2021 - November 28, 2021 14,500,000 112.43 14,500,000 34,404,441
November 29, 2021 - January 2, 2022 16,625,000 113.72 16,625,000 17,779,441
Total 31,125,000 $ 113.12 31,125,000


	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)
October 3, 2022 - October 30, 2022				—	52,572,178
October 31, 2022 - November 27, 2022	826,522	$	95.83	826,522	51,745,656
November 28, 2022 - January 1, 2023	1,107,480	101.32		1,107,480	50,638,176
Total	1,934,002	$	98.97	1,934,002

(1)Monthly information is presented by reference to our fiscal months during the first quarter of fiscal ~~2022.~~2023.

(2)Share repurchases are conducted under our ongoing share repurchase program announced in September 2001, which has no expiration ~~date.~~date, and for which the authorized number of shares has been increased by our Board numerous times, with our Board most recently authorizing the repurchase of up to an additional 40 million shares in March 2022.

(3)This column includes the total number of shares available for repurchase under the Company's 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 Securities Exchange Act of 1934, 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.

~~Table of Contents~~

Item 3.Defaults upon Senior Securities

None.

Item 4.Mine Safety Disclosures

Not applicable.

Item 5.Other Information

None.

3937

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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 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
10.1
Starbucks Corporation Executive Management Bonus Plan as amended and restated on January 12, 2022
8-K 000-20322 01/14/2022 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 January 2, 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


		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
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 January 1, 2023, 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

* Furnished herewith.

4038

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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.

February ~~1, 2022~~2, 2023


			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

4139



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	8
	Notes to Consolidated Financial Statements	9
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2725
Item 3	Quantitative and Qualitative Disclosures About Market Risk	3635
Item 4	Controls and Procedures	36

PART II. OTHER INFORMATION

Item 1	Legal Proceedings	3837
Item 1A	Risk Factors	3837
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	3837
Item 3	Defaults Upon Senior Securities	3937
Item 4	Mine Safety Disclosures	3937
Item 5	Other Information	3937
Item 6	Exhibits	4038
Signatures		4139