Starbucks (SBUX) — Company Research
Last Updated: 7 July 2026
Starbucks Corporation (Nasdaq: SBUX) is the world's largest coffeehouse operator, running roughly 41,000 company-operated and licensed stores globally at the close of fiscal 2025. After a difficult stretch of falling traffic and margin compression, the company is roughly two years into a turnaround led by chairman and CEO Brian Niccol under the banner "Back to Starbucks." Fiscal 2025 (the year ended 28 September 2025) was the trough: revenue edged up 3% to a record $37.18bn, but heavy restructuring charges and investment in store labour pushed GAAP diluted EPS down to $1.63 from $3.31. The second quarter of fiscal 2026, reported in April 2026, was described by management as "the turn" — global comparable sales rose 6.2% and the company raised full-year guidance. This report lays out the financials, the valuation and the risks using primary-source filings only.
1. Company Snapshot
| Field | Value |
|---|---|
| Company | Starbucks Corporation |
| Ticker | SBUX (Nasdaq) |
| Sector | Consumer & Retail — Restaurants / coffeehouses |
| CEO | Brian Niccol (Chairman & CEO since September 2024) |
| Headquarters | Seattle, Washington, USA |
| Employees | Approximately 361,000 worldwide |
| Stores | Approximately 41,000 globally (company-operated + licensed) |
| Revenue (FY2025, ended 28 Sep 2025) | $37.18bn |
| Net income (FY2025) | Approximately $1.85bn |
| Diluted EPS (FY2025) | $1.63 GAAP ($2.13 non-GAAP) |
| Market cap (6 Jul 2026) | Approximately $116.4bn |
| Dividend | $0.62 per share quarterly ($2.48 annualised) |
2. Bull & Bear Case
Bull Case
- Turnaround inflecting: Q2 FY2026 global comparable store sales rose 6.2% with US same-store sales up 7.1%, driven by the strongest US transaction growth in three years — management called it "the turn" in the turnaround.
- Iconic global brand: Starbucks operates ~41,000 stores worldwide with deep customer loyalty, a large rewards programme and pricing power that few restaurant brands can match.
- Margin-recovery runway: Fiscal 2025 operating margin fell to 7.9% from 15.0%, weighed down by restructuring and labour investment; as those costs anniversary, there is substantial room for margins to rebuild.
- Rising guidance: On the back of Q2, management raised fiscal 2026 comparable-sales guidance to at least 5% and lifted its non-GAAP EPS range to $2.25–$2.45.
- Shareholder returns intact: Starbucks raised its dividend for a fifteenth consecutive year (to $0.62 quarterly) and continues to prioritise the payout through the turnaround.
Bear Case
- Depressed earnings and rich multiple: GAAP EPS collapsed to $1.63 in fiscal 2025; on trailing GAAP earnings the shares trade at a very high multiple, leaving little room for disappointment.
- Heavy debt load: Total debt of roughly $16.1bn against $3.5bn of cash and a shareholders' deficit means the balance sheet is stretched relative to peers.
- Costly turnaround: The "Back to Starbucks" plan relies on adding store labour hours and simplifying operations — investments that pressure near-term margins and may take several years to fully pay back.
- China uncertainty: The large China business faces intense local competition and price pressure, and the strategic path (including potential partnership structures) remains a swing factor.
- Execution and labour risk: Unionisation efforts, wage inflation and the sheer operational complexity of a global store fleet all add risk to the margin-recovery thesis.
3. Business Segments
Starbucks reports three operating segments. The figures below are full-year fiscal 2025 net revenues from the company's Q4/full-year earnings release.
| Segment | % of revenue | What it is |
|---|---|---|
| North America | ~74% ($27.37bn) | Company-operated and licensed stores across the US and Canada — the core profit engine of the business. |
| International | ~21% ($7.82bn) | Company-operated and licensed stores outside North America, with China and the wider Asia-Pacific region the largest components. |
| Channel Development | ~5% ($1.99bn) | Packaged coffee, ready-to-drink beverages and foodservice sold through grocery and other channels, largely via the Global Coffee Alliance with Nestlé. |
4. Business Model
Starbucks makes money primarily by selling beverages and food through its own stores, supplemented by licensing and packaged-goods royalties. In fiscal 2025, company-operated stores generated the large majority of the $37.18bn in net revenues, with licensed-store royalties and Channel Development making up the balance.
How it makes money: The bulk of revenue and profit comes from high-frequency, habitual purchases at company-operated cafes, where beverage attach rates, digital ordering and the Starbucks Rewards programme drive ticket and traffic. Licensed stores and the Nestlé alliance add higher-margin, lower-capital royalty income. In fiscal 2025, store operating expenses of $17.06bn were the largest cost line, reflecting the labour-intensive nature of the cafe model.
Unit economics and moat: Starbucks' competitive advantage rests on brand strength, real-estate density, a vast loyalty dataset and supply-chain scale. The turnaround economics are the swing factor: management is deliberately trading near-term margin (adding labour hours, simplifying the menu and the support organisation) for improved throughput, service and customer experience. Fiscal 2025 operating margin of 7.9% is well below the mid-teens the business has historically earned, so the investment case hinges on whether "Back to Starbucks" restores both traffic and profitability.
5. Financial Health
All figures are drawn from Starbucks' quarterly and full-year earnings releases (SEC Form 8-K exhibit 99.1) and the associated condensed consolidated financial statements. Starbucks reports on a 52/53-week fiscal year ending on the Sunday closest to 30 September; fiscal 2025 ended 28 September 2025. GAAP EPS is shown alongside company-reported non-GAAP ("Adjusted") EPS, which excludes restructuring, impairment and certain other items.
| Fiscal Year | Revenue | YoY % | GAAP EPS | Adjusted EPS | Dividend/share | Long-term debt (YE) |
|---|---|---|---|---|---|---|
| FY2021 (Oct 2021) | $29.06bn | — | $3.54 | $3.54 | $1.80 | — |
| FY2022 (Oct 2022) | $32.25bn | +11.0% | $2.83 | $2.83 | $1.96 | $13,119.9m |
| FY2023 (Oct 2023) | $35.98bn | +11.6% | $3.58 | $3.58 | $2.12 | $13,547.6m |
| FY2024 (Sep 2024) | $36.18bn | +0.6% | $3.31 | $3.31 | $2.28 | $14,319.5m |
| FY2025 (Sep 2025) | $37.18bn | +2.8% | $1.63 | $2.13 | $2.44 | $14,575.9m |
Adjusted EPS equals GAAP in years without material special items; the fiscal 2025 divergence ($2.13 non-GAAP versus $1.63 GAAP) reflects $892m of restructuring and impairment charges. Long-term debt is the non-current portion at year-end; at 28 September 2025 Starbucks also carried $1.50bn current portion of long-term debt, for total debt of roughly $16.1bn against $3.47bn of cash and short-term investments.
| Quarter | Revenue | Adjusted EPS | GAAP EPS |
|---|---|---|---|
| Q2 FY2026 (Mar 2026) | $9.53bn | $0.50 | $0.45 |
| Q1 FY2026 (Dec 2025) | $9.92bn | $0.56 | $0.26 |
| Q4 FY2025 (Sep 2025) | $9.57bn | $0.52 | $0.12 |
| Q3 FY2025 (Jun 2025) | $9.46bn | $0.50 | $0.49 |
| FY2025 total | $37.18bn | $2.13 | $1.63 |
Operating cash flow was $4.75bn in fiscal 2025 against capital expenditure of $2.31bn, leaving roughly $2.44bn of free cash flow — enough to cover the dividend but with limited surplus while the turnaround investment continues. See the Live Charts for the current price picture.
6. Valuation
Raw metrics, July 2026. Not opinions on whether the stock is cheap or expensive.
| Metric | Value |
|---|---|
| Market cap | ~$116.4bn (share ~$102 × ~1,140m diluted shares, 6 Jul 2026) |
| Trailing P/E (GAAP) | ~77x, distorted (share $102 / TTM GAAP EPS $1.32; TTM = Q3'25 $0.49 + Q4'25 $0.12 + Q1'26 $0.26 + Q2'26 $0.45) — depressed by restructuring/impairment; ~49x on TTM non-GAAP EPS of $2.08 |
| P/E (forward) | ~43x (FY2026 non-GAAP EPS guidance midpoint $2.35) |
| P/S (TTM) | ~3.0x (market cap $116.4bn / TTM revenue ~$38.47bn) |
| P/FCF | ~48x (market cap $116.4bn / FCF ~$2.44bn; FCF = operating CF $4,747.5m − capex $2,305.5m per FY2025 cash flow statement) |
| Enterprise value | ~$129bn (market cap $116.4bn + total debt $16.07bn − cash & ST investments $3.47bn per FY2025 balance sheet) |
| EV/EBITDA (TTM) | ~28x (EV $129bn / FY2025 EBITDA ~$4.62bn; EBITDA = operating income $2,937m + D&A $1,685m); ~23x excluding $892m restructuring & impairment |
| 52-week high | $108.88 |
| 52-week low | $77.99 |
| Short interest (% of float) | ~4.1% (February 2026 settlement) |
| Days to cover | ~2.9 days |
7. What Are They Building
The central project is the "Back to Starbucks" turnaround, launched after Brian Niccol became chairman and CEO in September 2024. The plan is aimed at restoring the core cafe experience: reducing wait times, simplifying an overloaded menu, reinvesting in store labour hours, improving the mobile-order and in-store experience, and sharpening marketing to reconnect with customers. Q2 FY2026 provided the clearest evidence yet that it is working, with the strongest US transaction growth in three years.
Beyond the operational reset, Starbucks is also streamlining its support organisation (a source of the fiscal 2025 restructuring charges), rethinking its US store footprint toward smaller and more efficient formats, and continuing to evaluate the structure of its large but competitive China business. The company is investing in new store formats and equipment to speed up service, while the Channel Development arm and the Nestlé Global Coffee Alliance extend the brand into grocery and at-home consumption. The build is less about new markets and more about restoring throughput and profitability in the existing base.
8. Competitive Landscape
Starbucks competes broadly across coffee, quick-service and fast-casual restaurants, as well as against convenience-store coffee, regional chains and, in China, aggressive low-price local players. The peers below span the global restaurant complex most often compared with Starbucks.
| Peer | Market cap (Jul 2026) | Key 2025 metric |
|---|---|---|
| McDonald's (MCD) | ~$190bn | Global QSR leader; ~43,000 restaurants; large licensed/franchise model |
| Chipotle Mexican Grill (CMG) | ~$44bn | US fast-casual; ~3,700 restaurants; company-operated growth model |
| Yum! Brands (YUM) | ~$45bn | KFC, Taco Bell, Pizza Hut; ~60,000 units globally, heavily franchised |
| Restaurant Brands Intl (QSR) | ~$25bn | Burger King, Tim Hortons, Popeyes; Tim Hortons a direct coffee competitor |
| Dutch Bros (BROS) | ~$12.6bn | Fast-growing US drive-thru coffee chain taking share in beverages |
9. Leadership & Ownership
Brian Niccol serves as Chairman and Chief Executive Officer, having joined in September 2024 from Chipotle, where he led a celebrated operational turnaround. Rachel Ruggeri has served as Chief Financial Officer. Insider activity in 2026 has consisted of routine, plan-based sales rather than open-market purchases; there has been no material insider buying reported.
| Name | Date | Type | Shares | Price | Value | Plan Type |
|---|---|---|---|---|---|---|
| Brady Brewer (CEO, International) | 11 Jun 2026 | Sale | 588 | $100.00 | ~$58,800 | Rule 10b5-1 |
| Brady Brewer (CEO, International) | 17 Apr 2026 | Sale | 588 | $100.00 | ~$58,800 | Rule 10b5-1 |
These were small, pre-scheduled sales under a Rule 10b5-1 plan. No material open-market insider buying has been reported in 2026.
10. Risks
- Turnaround execution (Operational): The investment case depends on "Back to Starbucks" sustaining the traffic and comp recovery seen in Q2 FY2026; a relapse in US comparable sales would undermine the thesis.
- Margin recovery timing (Financial): Fiscal 2025 operating margin fell to 7.9%; heavy labour and restructuring investment could keep margins depressed longer than the market expects.
- Balance-sheet leverage (Financial): Roughly $16.1bn of total debt, a shareholders' deficit and only ~$3.5bn of cash leave limited cushion if cash flow weakens.
- China competition (Macro/Competitive): Intense local price competition and an uncertain strategic structure for the China business create a material earnings swing factor.
- Labour and unionisation (Operational/Regulatory): Wage inflation, staffing needs and continued unionisation efforts across US stores add cost and complexity.
- Valuation risk (Macro): With earnings still depressed, the shares carry a high multiple; a broad de-rating of expensive consumer names would hit the stock.
11. Recent Developments
- 28 Apr 2026 — "The turn" in the turnaround. Q2 FY2026 net revenues rose 9% to $9.53bn, global comparable sales grew 6.2% and US same-store sales climbed 7.1%; GAAP EPS was $0.45 and non-GAAP EPS $0.50.
- 28 Apr 2026 — Guidance raised. Starbucks lifted fiscal 2026 comparable-sales guidance to at least 5% (from 3%) and raised its non-GAAP EPS range to $2.25–$2.45.
- 29 Oct 2025 — Fiscal 2025 trough confirmed. Full-year revenue reached a record $37.18bn but GAAP EPS fell to $1.63 as operating margin dropped to 7.9%, weighed by $892m of restructuring and impairment charges.
- 28 Sep 2025 — Dividend raised. The Board increased the quarterly dividend to $0.62 per share (from $0.61), the fifteenth consecutive annual increase.
- Fiscal 2025 — Restructuring programme. Starbucks closed underperforming coffeehouses and simplified its support organisation as part of "Back to Starbucks," driving the year's elevated one-off charges.
12. Key Dates
- Expected late July 2026 — Q3 FY2026 results (13 weeks ending late June 2026); the key test of whether the comp recovery is sustaining.
- Expected October 2026 — Q4 and full fiscal 2026 results.
- Expected 27 Aug 2026 — Next quarterly dividend of $0.62 per share (based on the recent payment cadence).
- Expected January 2027 — Q1 FY2027 results.
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Disclaimer: This research is produced by ChartsView for educational and informational purposes only. It does not constitute financial advice or a recommendation to buy or sell any security. All information is sourced from publicly available company filings, press releases, and official data. ChartsView does not use analyst opinions or third-party ratings. Always conduct your own due diligence and consider your personal financial situation before making investment decisions. Past performance is not indicative of future results.
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13. Thesis Verdict
The central thesis. Starbucks is the world's largest coffeehouse operator, earning most of its revenue and profit from beverage and food sales at roughly 41,000 company-operated and licensed stores, supplemented by licensing and packaged-goods royalties. Fiscal 2025 (ended September 2025) was the earnings trough: revenue rose 3% to a record $37.18bn but GAAP EPS fell to $1.63 as operating margin dropped to 7.9% under restructuring and store-labour investment. Management has guided fiscal 2026 non-GAAP EPS to $2.25–$2.45, and the near-term catalyst is the "Back to Starbucks" turnaround, which drove 6.2% global comparable-sales growth in Q2 FY2026.
What would confirm or break it. Sustained US transaction and comparable-sales growth, plus a rebuild of operating margin back toward historical mid-teens levels, would confirm the turnaround. The thesis would break if comparable sales relapse, if margin recovery stalls under continued labour and restructuring investment, or if the leveraged balance sheet (roughly $16.1bn of total debt and a shareholders' deficit) or the competitive China business force a reset of expectations.
Watchpoints
- ConfirmsQ3 FY2026 earnings (21 days) landing in line with or above management guidance.
- ConfirmsEvidence supporting the "Turnaround inflecting:" thesis continuing to build across subsequent filings.
- InvalidatesMaterialisation of the "Turnaround execution (Operational):" risk, or any disclosure that fundamentally alters the capital-return or growth profile stated by management.
Diagnostic grid
Generated by ChartsView research tooling. Thesis strength measures how well the evidence in this report supports the company's stated thesis — it is NOT a buy/sell rating or price target. ChartsView is not authorised by the FCA to provide regulated investment advice. Generated 7 Jul 2026.