May 6, 2019
Patrick J. Grismer
Chief Financial Officer
STARBUCKS CORP
2401 Utah Avenue South
Seattle, Washington 98134
Re: STARBUCKS CORP
Form 10-Q for the Quarter Ended March 31, 2019
Filed April 30, 2019
File No. 000-20322
Dear Mr. Grismer:
We have limited our review of your filing to the financial statements
and related
disclosures and have the following comments. In some of our comments, we may
ask you to
provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by providing
the requested
information or advise us as soon as possible when you will respond. If you do
not believe our
comments apply to your facts and circumstances, please tell us why in your
response.
After reviewing your response to these comments, we may have additional
comments.
Form 10-Q for the Quarter Ended March 31, 2019
Item 1. Financial Statements (Unaudited)
Note 2. Revenue Recognition
License Store Revenues, page 11
1. We note from your disclosure initial nonrefundable pre-opening service
fees, including
site selection and evaluation, store development and design and
operational training, are
recognized upon completion of service. Please clarify your revenue
recognition policy to
specify the performance obligations included in contracts for licensed
store arrangements.
Your revised disclosure should indicate the goods or services promised in
your licensing
arrangements that are distinct and those that are combined to form a
bundled performance
obligation. Further, please disclose why you believe it is appropriate to
recognize pre-
opening services upon completion of service. As part of your revised
disclosure, please
discuss the significant judgments made by management in evaluating the
timing of
satisfaction of the related performance obligations and when a customer
obtains control of
Patrick J. Grismer
STARBUCKS CORP
May 6, 2019
Page 2
the promised good or service in accordance with ASC 606-10-50-17 and
19.
2. Additionally, please disclose the significant judgments made by
management in
determining pre-opening services are distinct from the license
performance obligation,
including the reason(s) why the associated revenues are satisfied at
the point in time rather
than over time.
3. Please disclose revenue recognized during the reporting period that
was included in
deferred revenue at the beginning of the period. Refer to ASC
606-10-50-8.
4. Please disclose whether you elected to apply the new revenue standard
retrospectively to
all or only to contracts that were not completed as of October 1,
2018. Refer to ASC 606-
10-65-1(h).
5. Please revise your revenue footnote to include the disclosures
required by ASC 606-10-
65-1(i) as it relates to income statement line items affected in the
current reporting
period by the application of the new revenue standard such as the
accounting and
reclassification of breakage income.
Deferred Revenue, page 12
6. Please explain to us why you believe recognition of the upfront
payment of $7 billion
from Nestl on a straight-line basis over the estimated economic life
of the arrangement
provides a faithful depiction of the transfer the promises in
licensing arrangement.
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
You may contact Aamira Chaudhry at 202-551-3389 or Jean Yu at
202-551-3305 with
any questions.
FirstName LastNamePatrick J. Grismer Sincerely,
Comapany NameSTARBUCKS CORP
Division of
Corporation Finance
May 6, 2019 Page 2 Office of
Transportation and Leisure
FirstName LastName