Starbucks (SBUX) 10-K risk factor changes: FY2020 vs FY2019

If any of the risks and uncertainties described in the cautionary factors described below actually occur or continue to occur, our business, financial condition and results of [removed: operations,] [added: operations] and the trading price of our common stock could be materially and adversely affected.

Moreover, the risks below are not the only risks we face and additional risks not currently known to us or that we presently deem immaterial may emerge or become material at [removed: any time and may negatively impact our business, reputation, financial condition, results of operations or the trading price of our common stock.]

[removed: | • | Economic] [added: - Economic] conditions in the U.S. and international markets could adversely affect our business and financial results. [removed: |]

There is also a risk that if negative economic conditions or [removed: uncertainty] [added: uncertainty, as a result of the COVID-19 pandemic or otherwise,] persist for a long period of time or worsen, consumers may make long-lasting changes to their discretionary purchasing behavior, including less frequent discretionary purchases on a more permanent basis or there may be a general downturn in the restaurant industry.

[removed: | • | Our] [added: - Our] success depends substantially on the value of our brands and failure to preserve their value could have a negative impact on our financial results. [removed: |]

Such incidents include actual or perceived breaches of privacy or violations of domestic or international privacy laws, contaminated food, product recalls, store employees or other food handlers infected with communicable [removed: diseases] [added: diseases, such as COVID-19,] or other potential incidents discussed in this risk factors section.

Additionally, if we fail to comply with laws and regulations, publicly take controversial positions or actions or fail to deliver a consistently positive consumer experience in each of our markets, including by failing to invest in the right balance of wages and benefits to attract and retain employees that represent the brand [removed: well,] [added: well or foster an inclusive and diverse environment,] our brand value may be diminished.

[removed: | • | If] [added: - If] our business partners and third-party providers do not satisfactorily fulfill their responsibilities and commitments, it could damage our brand and our financial results could suffer. [removed: |]

[removed: | • | Incidents] [added: - Incidents] involving food or beverage-borne illnesses, tampering, adulteration, contamination or mislabeling, whether or not accurate, as well as adverse public or medical opinions about the health effects of consuming our products, could harm our business. [removed: |]

Additionally, we are evolving our product lineup to include more local or smaller suppliers for some of our products who may not have as rigorous quality and safety systems and protocols as larger or more national [removed: suppliers.][added: suppliers, especially in light of the heightened safety protocols as a result of the COVID-19 pandemic.]

A decrease in customer traffic as a result of food-safety concerns or negative publicity, or as a result of a temporary closure of any of our stores, product [removed: recalls] [added: recalls, viral-contaminated food] or [added: beverage claims or other] food or beverage-safety claims or litigation, could materially harm our business and results of operations.

[removed: | • | The] [added: - The] unauthorized access, use, theft or destruction of customer or employee personal, financial or other data or of Starbucks proprietary or confidential information that is stored in our information systems or by third parties on our behalf could impact our reputation and brand and expose us to potential liability and loss of revenues. [removed: |]

Many of our information technology systems (and those of our licensees and other third-party business partners, whether cloud-based or hosted in proprietary servers), including those used for our point-of-sale, web and mobile platforms, online and mobile payment systems, delivery services and rewards [removed: programs,] [added: programs] and administrative functions, contain personal, financial or other information that is entrusted to us by our customers and employees.

[added: For example,] the European Union adopted a new regulation that became effective in May 2018, called the General Data Protection Regulation (“GDPR”), which requires companies to meet new requirements regarding the handling of personal data, including its use, protection and transfer and the ability of persons whose data is stored to correct or delete such data about themselves.

Additionally, the California Privacy Act of 2018 (“CCPA”), which was enacted in June 2018 and [removed: will come] [added: came] into effect on January 1, 2020, provides a new private right of action for data breaches and requires companies that process information on California residents to make new disclosures to consumers about their data collection, use and sharing practices and allow consumers to opt out of certain data sharing with third parties.

[removed: | • | We] [added: - We] rely heavily on information technology in our operations and growth initiatives, and any material failure, inadequacy, interruption or security failure of that technology could harm our ability to effectively operate and grow our business and could adversely affect our financial results. [removed: |]

[removed: Additionally, the success of several of our initiatives to drive growth, including our ability to increase digital] relationships with our customers to drive incremental traffic and spend, is highly dependent on our technology systems.

[removed: | • | We] [added: - We] may not be successful in implementing important strategic initiatives or effectively managing growth, which may have an adverse impact on our business and financial results. [removed: |]

[removed: | • |] [added: -] being an employer of choice and investing in employees to deliver a superior customer experience; [removed: |]

[removed: | • |] [added: -] building our leadership position around coffee; [removed: |]

[removed: | • |] [added: -] driving convenience, brand engagement and digital relationships through our mobile, loyalty, delivery and digital capabilities both domestically and internationally; [removed: |]

[removed: | • |] [added: -] simplifying store administrative tasks to allow store partners to better engage with customers; [removed: |]

[removed: | • |] [added: -] increasing the scale of the Starbucks store footprint with disciplined global expansion and introducing flexible and unique store [removed: formats; |][added: formats, including the accelerated development of alternative store formats (such as Starbucks® Pickup stores, Starbucks Now stores and curbside pickup) in light of the COVID-19 pandemic;]

[removed: | • |] [added: -] moving to a more licensed store model in some markets and a more company-owned model in other markets; [removed: |]

[removed: | • |] [added: -] creating new occasions in stores across all dayparts with new product offerings, including our growing lunch food and beverage product lineup; [removed: |]

[removed: | • |] [added: -] continuing the global growth of our Channel Development business through our supply, distribution and licensing agreements with Nestlé and other Channel Development business partners; [removed: |]

[removed: | • |] [added: -] delivering continued growth in our cold beverage business, including our tea business through the Teavana brand in our Starbucks® retail stores and other channels and internationally; and [removed: |]

[removed: | • |] [added: -] reducing our operating costs, particularly general and administrative expenses. [removed: |]

[removed: | • |] [added: -] imposition of additional taxes by jurisdictions, such as on certain types of beverages or based on number of employees; [removed: |]

[removed: | • |] [added: -] construction cost increases associated with new store openings and remodeling of existing stores; delays in store openings for reasons beyond our control or a lack of desirable real estate locations available for lease at reasonable rates, either of which could keep us from meeting annual store opening targets in the U.S. and internationally; [removed: |]

[removed: | • |] [added: -] not successfully scaling our supply chain infrastructure as our product offerings increase and as we continue to expand, including our emphasis on a broad range of high-quality food offerings; and [removed: |]

[removed: | • |] [added: -] the deterioration in our credit ratings, which could limit the availability of additional financing and increase the cost of obtaining financing to fund our initiatives. [removed: |]

[removed: | • | Evolving] [added: - Evolving] consumer preferences and tastes may adversely affect our business. [removed: |]

Our financial results could be adversely affected by a shift in consumer spending away from outside-the-home food and beverages (such as the disruption caused by [removed: on-line] [added: online] commerce that results in reduced foot traffic to [removed: "brick] [added: “brick] & [removed: mortar"] [added: mortar”] retail stores); lack of customer acceptance of new products (including due to price increases necessary to cover the costs of new products or higher input costs), brands (such as the global expansion of the [removed: Teavana brand in our Starbucks® retail stores and other channels)] [added: Starbucks brand)] and platforms (such as features of our mobile technology, changes in our loyalty rewards programs and our delivery services initiatives); or customers reducing their demand for our current offerings as new products are introduced.

[removed: | • |] [added: -] Our reliance on key business partners may adversely affect our business and operations. [removed: |]

Our international joint venture partners or licensees may face capital constraints or other factors that may limit the [added: speed at which they are able to expand and develop in a certain market.]

If they are not able to access sufficient funds or financing, or are otherwise unable [added: or unwilling] to successfully operate and grow their businesses it could have a material adverse effect on our results in the markets.

[removed: | • | Changes] [added: - Changes] in the availability of and the cost of labor could adversely affect our business. [removed: |]

[removed: Increases] [added: 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 [removed: costs and] [added: costs;] increased wages and costs of other benefits necessary to attract and retain high quality employees with the right skill [removed: sets.][added: sets and increased wages, benefits and costs related to the COVID-19 pandemic.]

[removed: Furthermore, the] [added: The] growth of our business can make it increasingly difficult to locate and hire sufficient numbers of key 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 [removed: experience] [added: experience,] which could materially harm our business and results of operations.

any time and may negatively impact our business, reputation, financial condition, results of operations or the trading price of our common stock.

Risks Related to Macroeconomic Conditions

- Our financial condition and results of operations have been and are expected to continue to be adversely affected by the COVID-19 pandemic.

In December 2019, a novel strain of coronavirus, known as COVID-19, was first reported and was subsequently declared a pandemic by the World Health Organization in March 2020.

To date, this outbreak has surfaced in nearly all regions around the world, and as the pandemic continues to spread, particularly in the United States, businesses as well as federal, state and local governments have implemented significant actions to attempt to mitigate this public health crisis.

Our operations have been and will continue to be disrupted to varying degrees in many markets (from limited operations including only drive-thru and delivery to full store closures in some markets).

While we cannot predict the duration or scope of the COVID-19 pandemic, it has negatively impacted our business and such impact has been and is expected to continue to be material to our financial results, condition and outlook.

The further spread of COVID-19, and the requirements to take action to mitigate the spread of the pandemic, will impact our ability to carry out our business as usual and may materially adversely impact our business, results of operations, cash flows and financial condition.

Even in regions where we have reopened stores, our stores may be subject to modified hours and operations and/or reduced customer traffic.

Moreover, certain of those regions, including parts of China and the United States, have suffered a COVID-19 relapse after reopening.

If those regions fail to fully contain COVID-19, or if additional regions suffer multiple COVID-19 relapses, any of those markets may not recover quickly or at all, which could have a material adverse effect on our business and results of operations.

As a result, we may incur additional impairment charges to our inventory, store and corporate assets— and our ability to realize the benefits from deferred tax assets may become limited— any of which may have a significant or material impact on our financial results.

On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), which among other things, provides employer payroll tax credits for wages paid to employees who are unable to work during the COVID-19 outbreak and options to defer payroll tax payments for a limited period.

Based on our evaluation of the CARES Act, we qualify for certain employer payroll tax credits as well as the deferral of payroll tax payments in the future.

Additionally, the Canadian government enacted the Canada Emergency Wage Subsidy (“CEWS”) to help employers offset a portion of their employee wages for a limited period.

We elected to treat qualified government subsidies from the U.S., Canada and other governments as offsets to the related operating expenses.

There is no guarantee that we will continue to meet the eligibility requirements to participate in any current or future government relief programs or that the benefits will meaningfully offset the lost revenues and incremental costs incurred.

Increased volatility or significant disruption of global financial markets due in part to the COVID-19 pandemic could have a negative impact on our ability to access capital markets and other funding sources, on acceptable terms or at all and impede our ability to comply with debt covenants.

The extent to which COVID-19 impacts our business, results of operations, cash flows and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the efficacy, scope and duration of actions to limit the spread of COVID-19 or treat its impact, among others.

While such actions have been relaxed or rolled back in certain markets, the actions have been reinstated in certain regions that have suffered relapse, and may be reinstated in additional regions as the pandemic continues to evolve.

The scope and timing of any such reinstatements are difficult to predict and may materially affect our future operations.

Due to the COVID-19 pandemic, we may experience a reduction and/or increased volatility in demand for our products, which may be caused by, among other things: store closures or modified operating hours and business model, reduced customer traffic due to illness, quarantine or government or self-imposed restrictions placed on our stores' operations and changes in consumer spending behaviors (e.g. continued practice of social distancing, decrease in consumer confidence in general macroeconomic conditions and a decrease in consumer discretionary spending).

Risks Related to Brand Relevance and Brand Execution

We do not have direct control over our business partners, including in their adherence to additional sanitation protocols and guidelines as a result of the COVID-19 pandemic, and may not have visibility into their practices.

Furthermore, due to the COVID-19 pandemic, there are stricter health regulations and guidelines and increased public concern over food safety standards and controls.

Potential food safety incidents, whether at our stores or involving our business partners, could lead to wide public exposure, which could materially harm our business.

- adjusting rapidly to changing customer preferences and behaviors in light of the COVID-19 pandemic;

- governmental regulations or other health guidelines concerning operations of stores due to the COVID-19 pandemic;

Furthermore, our financial results have been and could continue to be adversely affected by the impact of the COVID-19 pandemic, which has resulted in a disruption of customer routines, changes to employer “work-

from-home” policies, reduced business and recreational travel and changes in consumer behavior and the ability or willingness to spend discretionary income on our products.

Risks Related to Cybersecurity and Data Privacy

Similar to other companies, the number and frequency of these attempts varies from year to year but could be exacerbated to some extent by an increase in our digital operations in our efforts to comply with state and local mandates in response to COVID-19.

Additionally, the success of several of our initiatives to drive growth, including our ability to increase digital

Furthermore, due to social distancing measures put in place as a result of the COVID-19 pandemic, we have accelerated the transformation of our store portfolio by expanding convenience-led formats, which depend heavily on our mobile ordering capabilities.

Risks Related to Labor and Supply Chain

Our business partners may be materially adversely impacted by the COVID-19 pandemic and may not have sufficient financial support and capital to remain financially solvent and may not have the ability to meet their development goals and targets.

Due to the COVID-19 pandemic, our financial results have been and could continue to be adversely affected by the disruption to the operations of our business partners, including licensee and joint venture relationships, third-party manufacturers, distributors and retailers, through the effects of business and facilities closures, reductions in operating hours, social, economic, political or labor instability in affected areas, transportation delays, travel restrictions and changes in operating procedures, including for additional cleaning and safety protocols.

Because of the significance of

Furthermore, due to the COVID-19 pandemic, we could experience a shortage of labor for store positions as concern over exposure to COVID-19 and other factors could decrease the pool of available qualified talent for key functions.

In addition, our wages and benefits programs, combined with the challenging conditions due to the COVID-19 pandemic, may be insufficient to attract and retain the best talent.

| | |

| --- | --- |

For example,

speed at which they are able to expand and develop in a certain market.

With our acquisition of the East China business, the China market is 100% company-owned.

| • | the ability to successfully integrate the East China business. |

| • | the discontinuation of the London Interbank Offered Rate (“LIBOR”) after 2021 and the replacement with an alternative reference rate may adversely impact interest rates. |

prepared food offerings, especially with respect to goods sourced from outside the U.S. and from countries or regions with diminished infrastructure, developing or failing economies or which are experiencing political instability or social unrest.

[removed: | • |] [added: -] Total net revenues [removed: increased 7%] [added: decreased 11%] to [removed: $26.5] [added: $23.5] billion in fiscal [removed: 2019] [added: 2020] compared to [removed: $24.7] [added: $26.5] billion in fiscal [removed: 2018. |][added: 2019.]

[removed: | • |] [added: -] Capital expenditures were [removed: $1.8] [added: $1.5] billion in fiscal [removed: 2019] [added: 2020] compared to [removed: $2.0] [added: $1.8] billion in fiscal [removed: 2018. |][added: 2019 primarily due to a pause in new store openings due to COVID-19.]

[removed: | • |] [added: -] We returned [removed: $12.0] [added: $3.6] billion to our shareholders in fiscal [removed: 2019] [added: 2020] through share repurchases and dividends compared to [removed: $8.9] [added: $12.0] billion in fiscal [removed: 2018. |][added: 2019.]

See [Note [removed: 2](#s259E6698836B575D8F55CA4B8F62CBC2),] [added: 2](#i54ccc64cb5384be5a4849ef1cdef4dde_136),] Acquisitions, Divestitures and Strategic Alliance, to the consolidated financial statements included in Item 8 of Part II of this 10-K for information regarding acquisitions and divestitures.

RESULTS OF OPERATIONS — [removed: FISCAL 2019 COMPARED] [added: FISCAL 2019 COMPARED] TO [removed: FISCAL 2018][added: FISCAL 2018]

| Fiscal Year Ended | [added: | |] Sep 29, 2019 | | | | [added: | |] Sep 30, 2018 | | | | [removed: % Change] | | [added: % Change | | |]

| Net revenues: | | | | | | | | | | | [added: | | | | | | |]

| Company-operated stores | [added: | |] $ | 21,544.4 | | | [added: | |] $ | 19,690.3 | | | [added: | |] 9.4 | [added: |] % |

| Licensed stores | [added: | |] 2,875.0 | | | | [added: | |] 2,652.2 | | | | [added: | |] 8.4 | | [added: |]

| Other | [added: | |] 2,089.2 | | | | [added: | |] 2,377.0 | | | | [removed: (12.1] | [removed: )] | [added: (12.1) | | |]

| Total net revenues | [added: | |] $ | 26,508.6 | | | [added: | |] $ | 24,719.5 | | | [added: | |] 7.2 | [added: |] % |

These increases were partially offset by unfavorable foreign currency translation ($189 million) and the conversion of our Thailand, [removed: France,] [added: France] and the Netherlands retail businesses to fully licensed markets during fiscal 2019 ($161 million).

Licensed store revenue growth also contributed to the increase in total net revenues ($223 million), primarily due to higher product and equipment sales to and royalty revenues from our licensees ($228 million), largely due to the opening of 992 net new Starbucks® licensed stores over the past 12 months, and the conversion of our Thailand, [removed: France,] [added: France] and the Netherlands retail businesses to fully licensed markets ($35 million), partially offset by unfavorable foreign currency translation ($41 million).

| Fiscal Year Ended | [added: | |] Sep 29, 2019 | | | | [added: | |] Sep 30, 2018 | | | | [added: | |] Sep 29, 2019 | | | [added: | | |] Sep 30, 2018 | | [added: |]

| | | | | | | | | | [added: | | | | | |] As a % of Total Net Revenues | | | | | [added: | | | |]

| [removed: Cost of sales] [added: Product and distribution costs] | [added: | |] $ | 8,526.9 | | | [added: | |] $ | 7,930.7 | | | [added: | |] 32.2 | [added: |] % | | [added: | |] 32.1 | [added: |] % |

| Store operating expenses | [added: | |] 10,493.6 | | | | [added: | |] 9,472.2 | | | | [added: | |] 39.6 | | | [added: | | |] 38.3 | | [added: |]

| Other operating expenses | [added: | |] 371.0 | | | | [added: | |] 554.9 | | | | [added: | |] 1.4 | | | [added: | | |] 2.2 | | [added: |]

| Depreciation and amortization expenses | [added: | |] 1,377.3 | | | | [added: | |] 1,247.0 | | | | [added: | |] 5.2 | | | [added: | | |] 5.0 | | [added: |]

| General and administrative expenses | [added: | |] 1,824.1 | | | | [added: | |] 1,708.2 | | | | [added: | |] 6.9 | | | [added: | | |] 6.9 | | [added: |]

| Restructuring and impairments | [added: | |] 135.8 | | | | [added: | |] 224.4 | | | | [added: | |] 0.5 | | | [added: | | |] 0.9 | | [added: |]

| Total operating expenses | [added: | |] 22,728.7 | | | | [added: | |] 21,137.4 | | | | [added: | |] 85.7 | | | [added: | | |] 85.5 | | [added: |]

| Income from equity investees | [added: | |] 298.0 | | | | [added: | |] 301.2 | | | | [added: | |] 1.1 | | | [added: | | |] 1.2 | | [added: |]

| Operating income | [added: | |] $ | 4,077.9 | | | [added: | |] $ | 3,883.3 | | | [added: | |] 15.4 | [added: |] % | | [added: | |] 15.7 | [added: |] % |

| Store operating expenses as a % of related revenues | | | | | | | | | [added: | | | | | |] 48.7 | [added: |] % | | [added: | |] 48.1 | [added: |] % |

[removed: Cost of sales] [added: Product and distribution costs] as a percentage of total net revenues increased 10 basis points, primarily due to licensing our CPG and Foodservice businesses to Nestlé (approximately 80 basis points), partially offset by cost savings initiatives (approximately 70 basis points) and leverage on [removed: cost of sales,] [added: product and distribution costs,] largely driven by price increases.

| Operating income | [added: | |] $ | 4,077.9 | | | [added: | |] $ | 3,883.3 | | | [added: | |] 15.4 | [added: |] % | | [added: | |] 15.7 | [added: |] % |

| Gain resulting from acquisition of joint venture | [added: | |] — | | | | [added: | |] 1,376.4 | | | | [added: | |] — | | | [added: | | |] 5.6 | | [added: |]

| Net gain resulting from divestiture of certain operations | [added: | |] 622.8 | | | | [added: | |] 499.2 | | | | [added: | |] 2.3 | | | [added: | | |] 2.0 | | [added: |]

| Interest income and other, net | [added: | |] 96.5 | | | | [added: | |] 191.4 | | | | [added: | |] 0.4 | | | [added: | | |] 0.8 | | [added: |]

| Interest expense | [removed: (331.0] | | [removed: )] [added: (331.0)] | | [removed: (170.3] | | [removed: )] | | [removed: (1.2] [added: (170.3)] | [removed: )] | | [removed: (0.7] | [removed: )] | [added: | (1.2) | | | | | | (0.7) | | |]

| Earnings before income taxes | [added: | |] 4,466.2 | | | | [added: | |] 5,780.0 | | | | [added: | |] 16.8 | | | [added: | | |] 23.4 | | [added: |]

| Income tax expense | [added: | |] 871.6 | | | | [added: | |] 1,262.0 | | | | [added: | |] 3.3 | | | [added: | | |] 5.1 | | [added: |]

| Net earnings including noncontrolling interests | [added: | |] 3,594.6 | | | | [added: | |] 4,518.0 | | | | [added: | |] 13.6 | | | [added: | | |] 18.3 | | [added: |]

| Net [removed: earnings/(loss)] [added: earnings] attributable to noncontrolling interests | [removed: (4.6] | | [removed: )] [added: (4.6)] | | [removed: (0.3] | | [removed: )] | | [added: (0.3) | | | | | |] — | | | [added: | | |] — | | [added: |]

| Net earnings attributable to Starbucks | [added: | |] $ | 3,599.2 | | | [added: | |] $ | 4,518.3 | | | [added: | |] 13.6 | [added: |] % | | [added: | |] 18.3 | [added: |] % |

| Effective tax rate including noncontrolling interests | | | | | | | | | [added: | | | | | |] 19.5 | [added: |] % | | [added: | |] 21.8 | [added: |] % |

We recorded [removed: store] [added: stored] value card breakage in interest income and other, net in the prior year.

See [Note [removed: 13](#s8897E88EDF2054D4BE54216AD3BD5371),] [added: 14](#i54ccc64cb5384be5a4849ef1cdef4dde_181),] Income Taxes, for further discussion.

| | | | | | | | | | [added: | | | | | |] As a % of Americas Total Net Revenues | | | | | [added: | | | |]

Starbucks results for fiscal 2020 reflect the challenges our business faced with the COVID-19 pandemic, which severely impacted our results, particularly during the second and third fiscal quarters.

Consolidated revenues declined 11% to $23.5 billion in fiscal 2020 compared to $26.5 billion in fiscal 2019 driven by temporary closures of a significant number of our company-operated and licensed stores, as well as modified business operations and reduced customer traffic.

We gradually reopened our stores and, since then, have seen sequential improvements in comparable store sales in both our Americas and International segments as transaction volumes continue to climb, reflecting the resilience of our business model and the strength of our brand.

Comparable store sales for the Americas segment declined by 12% for fiscal 2020, primarily due to the temporary store closures, reduced customer traffic and shortened store hours.

The most negative impacts occurred during the third quarter of fiscal 2020.

Most company-operated and licensed stores were re-opened as of early May, and over 60% of company-operated stores in the U.S. provided limited seating by the end of the fiscal year.

To help protect the health and welfare of our partners, we incurred incremental labor costs, including paying the wages and benefits to partners who were either unable or uncomfortable working from mid-March through May, a temporary wage increase for partners who continued working during this period and additional benefits to furloughed or separated partners resulting from reduced store hours.

The incremental wages incurred were partially offset by qualified tax credits provided by the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) and the Canada Emergency Wage Subsidy (“CEWS”).

In June 2020, we announced a plan to optimize our North America store portfolio, primarily in dense, metropolitan markets, by blending store formats to better cater to changing customer tastes and preferences.

During the fourth quarter of fiscal 2020, we closed approximately 100 stores in the U.S. and Canada, and we expect to close an additional 700 stores in those markets over the next 18 months.

This reflects an additional 200 store closures than the initial announcement estimate of 600 stores.

Costs incurred related to the restructuring efforts are recorded as restructuring and impairments on our consolidated statement of earnings and will continue to be recorded in accordance with the anticipated timeline of store closures.

For the International segment, comparable store sales declined by 19% for fiscal 2020, mostly due to the 31% and 37% reduction in comparable store sales during the second and third fiscal quarters of 2020, respectively.

Company-operated stores in the China market began re-opening in the fiscal second quarter, and nearly all company-operated stores were open by the end of the fiscal third quarter.

To support our international licensees in their recovery efforts, we extended more flexible development and financial terms, including waiving royalty payments during the fiscal third quarter.

Revenue for our Channel Development segment declined $68 million, or 3%, when compared with fiscal 2019.

This is largely due to the lapping of Global Coffee Alliance transition-related activities, including higher inventory sales in the prior year as Nestlé prepared to fulfill customer orders.

These are partially offset by the continued growth of the Global Coffee Alliance during fiscal 2020.

Throughout the second half of fiscal 2020, we experienced initial business recovery as our stores gradually reopened under modified operations to meet public health guidelines and evolving customer behaviors and expectations.

As of September 27, 2020, nearly all of our company-operated and licensed stores were re-opened.

Those that have remained closed are located in travel or transportation hubs as well as central business districts.

Our global business is recovering steadily, with China approaching comparable store sales recovery and the U.S. demonstrating continued upward momentum in sales and profitability.

Our Channel Development segment continues to grow category share as customers adjust to their at-home routines.

In fiscal 2021, we expect lower revenues for the segment as we transitioned our single-serve coffee business to a more royalty-based model.

However, the change is anticipated to have an accretive impact on operating margin for the segment.

We continue to invest in technologies and innovations to elevate the customer and partner experience and to drive long-term growth.

By reimagining our store formats, we are moving swiftly to adapt to new customer behaviors.

Absent significant COVID-19 relapses or global economic disruptions, and based on the current trend of our retail business recovery and our focused efforts to expand contactless customer experiences, digital capabilities and beverage innovation, we believe we are well positioned to regain the positive business momentum we had demonstrated prior to the pandemic.

- Consolidated operating income decreased to $1.6 billion in fiscal 2020 compared to operating income of $4.1 billion in fiscal 2019.

Fiscal 2020 operating margin was 6.6% compared to 15.4% in fiscal 2019.

Operating margin contraction was primarily driven by sales deleverage and additional costs incurred attributable to COVID-19, including catastrophe pay and enhanced pay programs for retail store partners, net of benefits provided by government subsidies.

Higher restructuring activities related to our Americas store portfolio optimization and investments to support key business partners also contributed.

These decreases were partially offset by sales leverage realized in the first quarter of fiscal 2020 prior to the onset of COVID-19 impacts and supply chain efficiencies.

- Earnings per share (“EPS”) for fiscal 2020 decreased to $0.79, compared to EPS of $2.92 in fiscal 2019.

The decrease was primarily driven by the adverse impacts of COVID-19, including lower revenues due to temporary store closures, reduced customer traffic and modified operations, as well as incremental labor expenses and restructuring costs.

We temporarily suspended our share repurchase program in March 2020.

| | | | | | | | | | | | | | | | | | |

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| Fiscal Year Ended | | | Sep 27, 2020 | | | | | | Sep 29, 2019 | | | | | | % Change | | |

| Company-operated stores | | | $ | 19,164.6 | | | | | $ | 21,544.4 | | | | | (11.0) | | % |

Starbucks results for fiscal 2019 reflect the impacts of continued streamlining efforts, initiated during the fourth quarter of fiscal 2017, to focus on accelerating growth in high-returning businesses and converting several market operations, including Thailand, France, and the Netherlands, to fully licensed models in fiscal 2019.

Additionally, in fiscal 2019, we saw the full impact from the licensing of the majority of our CPG and Foodservice businesses to Nestlé in the fourth quarter of fiscal 2018.

In the fourth quarter of fiscal 2019, we realigned our operating segment reporting structure to better reflect the cumulative effect of our streamlining efforts.

Specifically, our previous China/Asia Pacific ("CAP") segment and Europe, Middle East, and Africa ("EMEA") segment have been combined into one International segment.

Results of Siren Retail, a non-reportable operating segment consisting of Starbucks ReserveTM Roastery & Tasting Rooms, certain stores under the Starbucks Reserve brand and Princi operations, which were previously included within Corporate and Other, are now reported within the Americas and International segments based on the geographical location of the operations.

As a result, we have three reportable operating segments: Americas, International and Channel Development.

Non-reportable operating segments and unallocated corporate expenses are reported within Corporate and Other.

Further, to better support the review of our results, we have changed the classification of certain costs.

The most significant change was the reclassification of company-owned store occupancy costs from cost of sales to store operating expenses.

We also made certain other immaterial changes.

Concurrent with the change in reportable segments and realignment of certain operating expenses noted above, we revised our prior period financial information to be consistent with the current period 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.

In December 2017, the U.S. government enacted comprehensive tax legislation into law H.R. 1, commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”), which significantly changed existing U.S. tax law and included numerous provisions that affect our business.

Our U.S. corporate income tax rate for fiscal 2019 and future years is 21%, while a blended rate of 24.5% was applied in fiscal 2018.

| | |

| --- | --- |

| • | Consolidated operating income increased to $4.1 billion in fiscal 2019 compared to operating income of $3.9 billion in fiscal 2018. Fiscal 2019 operating margin was 15.4% compared to 15.7% in fiscal 2018. Operating margin compression in fiscal 2019 was primarily driven by partner (employee) investments and growth in wages and benefits, licensing our CPG and Foodservice businesses to Nestlé and other strategic investments. These decreases were partially offset by sales leverage, cost savings initiatives, lower restructuring and impairment costs and the impact of the adoption of new revenue recognition guidance on stored value card breakage. |

| • | Earnings per share (“EPS”) for fiscal 2019 decreased to $2.92, compared to EPS of $3.24 in fiscal 2018. The decrease was primarily driven by lapping the prior year gains from the acquisition of our East China joint venture and the sale of our Tazo brand, partially offset by the gain from the sale of our Thailand retail operations during fiscal 2019. |

| | | | | | | | | | | |

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| | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

Discussion of our International segment results below reflects the impact of fully consolidating our East China business from an equity method joint venture to a company-operated market since the acquisition date of December 31, 2017.

Our collaborative business relationships for our global ready-to-drink products and the associated revenues remain unchanged due to the Global Coffee Alliance.

| Cost of sales | 67.3 | | | | 84.9 | | | | (20.7 | ) |

Corporate and Other primarily consists of our unallocated corporate expenses, as well as Evolution Fresh and the legacy operations of the Teavana retail business, which substantially ceased during fiscal 2018.

| Company-operated stores | $ | 19,690.3 | | | $ | 17,650.7 | | | 11.6 | % |

| Licensed stores | 2,652.2 | | | | 2,355.0 | | | | 12.6 | |

| Other | 2,377.0 | | | | 2,381.1 | | | | (0.2 | ) |

The growth in company-operated store revenues was driven by incremental revenues from 816 net new Starbucks® company-operated store openings over the past 12 months ($904 million), incremental revenues from the impact of our ownership change in East China ($903 million) and a 2% increase in comparable store sales ($345 million), attributable to a 3% increase in average ticket.

Licensed store revenue growth also contributed to the increase in total net revenues ($297 million), primarily due to increased product and equipment sales to and royalty revenues from our licensees ($298 million), largely due to the opening of 1,181 net new Starbucks® licensed stores over the past 12 months and the conversions of both the Singapore and Taiwan markets to fully licensed in the fourth quarter of fiscal 2017 and the first quarter of fiscal 2018, respectively ($44 million).

These increases were partially offset by the impact of our ownership change in East China at the end of the first quarter of fiscal 2018 ($53 million).

Other revenues decreased $4 million, primarily driven by the absence of revenue due to the sale of our Tazo brand in the first quarter of fiscal 2018 ($56 million), the closure of our e-commerce business in the fourth quarter of fiscal 2017 ($51 million) and licensing our CPG and Foodservice businesses to Nestlé late in the fourth quarter of fiscal 2018 ($50 million).

Partially offsetting these decreases were increased sales of packaged coffee and premium single-serve products ($115 million).

| Cost of sales | $ | 7,930.7 | | | $ | 7,065.8 | | | 32.1 | % | | 31.6 | % |

| Store operating expenses | 9,472.2 | | | | 8,486.4 | | | | 38.3 | | | 37.9 | |

| Other operating expenses | 554.9 | | | | 518.0 | | | | 2.2 | | | 2.3 | |

| Restructuring and impairments | 224.4 | | | | 153.5 | | | | 0.9 | | | 0.7 | |

| Total operating expenses | 21,137.4 | | | | 18,643.5 | | | | 85.5 | | | 83.3 | |

| Operating income | $ | 3,883.3 | | | $ | 4,134.7 | | | 15.7 | % | | 18.5 | % |

| | |

| --- | --- |

Starbucks is the premier roaster, marketer and retailer of specialty coffee in the world, operating in [removed: 81] [added: 83] markets.

To achieve this, we are continuing the disciplined expansion of our global store base, adding stores in both existing, developed markets such as the [removed: U.S.,] [added: U.S.] and in newer, higher growth markets such as China, as well as optimizing the mix of company-operated and licensed stores around the world.

In this Annual Report on Form 10-K (“10-K” or “Report”) for the fiscal year ended September [removed: 29, 2019] [added: 27, 2020] (“fiscal [removed: 2019”),] [added: 2020”),] Starbucks Corporation (together with its subsidiaries) is referred to as “Starbucks,” the “Company,” “we,” “us” or “our.”

We have three reportable operating segments: 1) Americas, which is inclusive of the U.S., [removed: Canada,] [added: Canada] and Latin America; 2) International, which is inclusive of China, Japan, Asia Pacific, Europe, Middle [removed: East,] [added: East] and Africa; and 3) Channel Development.

Revenues from our reportable operating segments as a percentage of total net revenues for fiscal [removed: 2019] [added: 2020] were as follows: Americas [removed: (69%),] [added: (70%),] International [removed: (23%)] [added: (22%)] and Channel Development (8%).

[removed: Therefore, they] [added: Certain markets within our International operations are in various stages of development and] may require [removed: a] more extensive [removed: support organization,] [added: support,] relative to their current levels of revenue and operating income, than our Americas operations.

Company-operated and Licensed Store Summary as [removed: of September 29, 2019][added: of September 27, 2020]

| | [added: | |] Americas | | | [added: | | |] As a% of Total Americas Stores | | | [added: | | |] International | | | [added: | | |] As a% of Total International Stores | | | [added: | | | | | | | | | | | |] Total | | | [added: | | |] As a% of Total Stores | | [added: |]

| [removed: Total] [added: Total] | [removed: 18,067] | | [added: 100] | [removed: 100] | [removed: %] [added: %] | | [removed: 13,189] | | [added: 100] | [removed: 100] | [removed: %] [added: %] | | [removed: 31,256] | | [added: 100] | [removed: 100] | [removed: %] [added: %] |

Revenue from company-operated stores accounted for 81% of total net revenues during fiscal [removed: 2019.][added: 2020.]

The *Starbucks Experience* is built upon superior customer [removed: service] [added: service, convenience] and a seamless digital experience as well as [added: safe,] clean and well-maintained stores that reflect the personalities of the communities in which they operate, thereby building a high degree of customer loyalty.

Our strategy for expanding our global retail business is to increase our [removed: market] [added: category] share in a disciplined manner, by selectively opening additional stores in new and existing markets, as well as increasing sales in existing stores, to support our long-term strategic objective to maintain Starbucks standing as one of the most recognized and respected brands in the world.

Company-operated store data for the year-ended September [removed: 29, 2019:][added: 27, 2020:]

| | [added: | |] Stores Open as of | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | |] Stores Open as of | | [added: |]

| | [added: | |] Sep [removed: 30, 2018] [added: 29, 2019] | | | [added: | | |] Opened | | | [added: | | |] Closed | | | [added: | | |] Transfers | | | [added: | | |] Net | | | [added: | | |] Sep [removed: 29, 2019] [added: 27, 2020] | | [added: |]

| Americas: | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | |]

| Canada | [removed: 1,109] | | [added: 1,175] | [removed: 82] | | | [removed: (16] | [removed: )] | [added: 58] | [added: | | | | | (74) | | | | | |] — | | | [removed: 66] | | | [removed: 1,175] [added: (16)] | | [added: | | | | 1,159 | | |]

| Siren Retail | [removed: 6] | | [added: 8] | [removed: 3] | | | [removed: (1] | [removed: )] | [added: 2] | [added: | | | | | (1) | | | | | |] — | | | [removed: 2] | | | [removed: 8] [added: 1] | | [added: | | | | 9 | | |]

| [removed: International (1):] [added: International:] | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | |]

| U.K. | [removed: 335] | | [added: 288] | [added: | | | | |] 6 | | | [removed: (53] | [removed: )] | | [added: (2) | | | | | | (4) | | | | | |] — | | | [removed: (47] | [removed: )] | | 288 | | [added: |]

| All Other | [removed: 155] | | [added: 65] | [removed: 1] | | | [removed: (9] | [removed: )] | [added: 2] | [removed: (82] | [removed: )] | | [removed: (90] | [removed: )] | [added: —] | [removed: 65] | | [added: | | | — | | | | | | 2 | | | | | | 67 | | |]

| Siren Retail | [removed: 2] | | [added: 5] | [removed: 3] | | | [added: | |] — | | | [added: | | |] — | | | [removed: 3] | | | [added: — | | | | | | — | | | | | |] 5 | | [added: |]

Our ability to vary the size and format of our stores allows us to locate them in or near a variety of settings, including downtown and suburban retail centers, office buildings, university campuses and [removed: in select] rural and off-highway locations.

We are continuing the expansion of our stores, particularly [removed: Drive Thru] [added: drive-thru] formats that provide a higher degree of access and convenience, and alternative store formats, which are [removed: focused on an elevated *Starbucks Experience* for our customers.][added: designed to provide a more streamlined customer experience in dense metropolitan areas.]

| Fiscal Year Ended | [added: | |] Sep [added: 27, 2020 | | | | | | Sep] 29, 2019 | | | [added: | | |] Sep 30, 2018 | | | [removed: Oct 1, 2017 | |]

| Beverages | [removed: 74] | [added: | 75 | |] % | | [added: | |] 74 | [added: |] % | | [removed: 73] | [added: | 74 | |] % |

| Food | [added: | |] 20 | [added: |] % | | [added: | |] 20 | [added: |] % | | [added: | |] 20 | [added: |] % |

| Packaged and single-serve coffees and teas | [added: | |] 1 | [added: |] % | | [removed: 2] | [added: | 1 | |] % | | [removed: 3] | [added: | 2 | |] % |

| [removed: Other (1)] [added: Other(1)] | [removed: 5] | [added: | 4 | |] % | | [removed: 4] | [added: | 5 | |] % | | [added: | |] 4 | [added: |] % |

| [removed: Total] [added: Total] | [removed: 100] | [removed: %] | [added: 18,354] | [removed: 100] | [removed: %] | | [removed: 100] | [removed: %] | [added: 100 | | % | | | | 14,306 | | | | | | 100 | | % | | | | | | | | | | | | | 32,660 | | | | | | 100 | | % |]

[removed: | (1) | “Other”] [added: (1)“Other”] primarily consists of sales of serveware and ready-to-drink beverages, among other items. [removed: |]

They can be obtained in our company-operated and most licensed stores in North America, China, [removed: Japan,] [added: Japan] and many of our markets in our International segment.

Stored value cards can also be obtained [removed: on-line,] [added: online,] via the Starbucks® Mobile [removed: App,] [added: App] and through other U.S. and international retailers.

Refer to [Note [removed: 1](#s5D815956884D590C810E9ABCDCDAFD4B),] [added: 1](#i54ccc64cb5384be5a4849ef1cdef4dde_130),] Summary of Significant Accounting Policies, included in Item 8 of Part II of this 10-K, for further discussion of our stored value cards and loyalty program.

Revenues from our licensed stores accounted for [removed: 11%] [added: 10%] of total net revenues in fiscal [removed: 2019.][added: 2020.]

Licensed store data for the year-ended September [removed: 29, 2019:][added: 27, 2020:]

| Mexico | [removed: 708] | | [added: 748] | [removed: 49] | | | [removed: (9] | [removed: )] | [added: 15] | [added: | | | | | (11) | | | | | |] — | | | [removed: 40] | | | [removed: 748] [added: 4] | | [added: | | | | 752 | | |]

| Latin America | [removed: 622] | | [added: 663] | [removed: 45] | | | [removed: (4] | [removed: )] | [added: 32] | [added: | | | | | (33) | | | | | |] — | | | [removed: 41] | | | [removed: 663] [added: (1)] | | [added: | | | | 662 | | |]

| Canada | [removed: 409] | | [added: 432] | [removed: 34] | | | [removed: (11] | [removed: )] | [added: 24] | [removed: —] | | | [removed: 23] | | [added: (12)] | [removed: 432] | | [added: | | | | | | | | | 12 | | | | | | 444 | | |]

| U.K. | [removed: 653] | | [added: 707] | [removed: 60] | | | [removed: (6] | [removed: )] | [added: 55] | [removed: —] | | | [removed: 54] | | [added: (29)] | [removed: 707] | | [added: | | | 4 | | | | | | 30 | | | | | | 737 | | |]

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Company-operated stores | | | 10,109 | | | | | | 55 | | % | | | | 6,528 | | | | | | 46 | | % | | | | | | | | | | | | | 16,637 | | | | | | 51 | | % |

| Licensed stores | | | 8,245 | | | | | | 45 | | % | | | | 7,778 | | | | | | 54 | | % | | | | | | | | | | | | | 16,023 | | | | | | 49 | | % |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| U.S. | | | 8,791 | | | | | | 332 | | | | | | (182) | | | | | | — | | | | | | 150 | | | | | | 8,941 | | |

| Total Americas | | | 9,974 | | | | | | 392 | | | | | | (257) | | | | | | — | | | | | | 135 | | | | | | 10,109 | | |

| China | | | 4,123 | | | | | | 613 | | | | | | (32) | | | | | | — | | | | | | 581 | | | | | | 4,704 | | |

| Japan | | | 1,379 | | | | | | 104 | | | | | | (19) | | | | | | — | | | | | | 85 | | | | | | 1,464 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Total International | | | 5,860 | | | | | | 725 | | | | | | (53) | | | | | | (4) | | | | | | 668 | | | | | | 6,528 | | |

| Total company-operated | | | 15,834 | | | | | | 1,117 | | | | | | (310) | | | | | | (4) | | | | | | 803 | | | | | | 16,637 | | |

Prior to the novel coronavirus outbreak, known as the global pandemic COVID-19, approximately 80% of Starbucks transactions in U.S. company-operated stores were “on-the-go” occasions.

This has prompted us to reexamine our U.S. store footprint and evolve our retail presence over time through targeted store renovations, relocations and new stores.

We have since introduced a new store format, Starbucks® Pickup, to enhance the “on-the-go” customer experience and improve operating efficiency across Starbucks® stores in certain major metropolitan areas in the Americas.

New store formats, such as Starbucks Pickup, are suitable for customers who prefer to order ahead and pay through the Starbucks® Mobile App for pick-up.

In our major international markets, we continue to invest in technology and establish partnerships with third parties with relevant expertise to increase digital adoption to provide convenience and elevate the customer experience.

In China, the introduction of Starbucks NowTM stores enables a seamless integration of physical and digital customer touchpoints.

Orders may be placed in advance through the Starbucks Mobile App or Starbucks DeliversTM and can be conveniently picked up by customers and delivery riders in these express retail format locations.

These strategies align closely with rapidly evolving customer preferences, including higher levels of mobile ordering, more contactless pick-up experiences and reduced in-store congestion, all of which naturally allow for greater physical distancing.

We believe our continued efforts to transform our store portfolio and elevate technology will enhance the customer experience and position Starbucks for long-term growth.

Beginning in the fourth quarter of fiscal 2020, in addition to using their Starbucks Cards, Starbucks® Rewards members can earn Stars by paying with cash, credit or debit cards, or selected mobile wallets at company-operated stores in the U.S. and Canada.

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | Stores Open as of | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Stores Open as of | | |

| | | | Sep 29, 2019 | | | | | | Opened | | | | | | Closed | | | | | | Transfers | | | | | | Net | | | | | | Sep 27, 2020 | | |

| Americas: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| U.S. | | | 6,250 | | | | | | 210 | | | | | | (73) | | | | | | — | | | | | | 137 | | | | | | 6,387 | | |

| Total Americas | | | 8,093 | | | | | | 281 | | | | | | (129) | | | | | | — | | | | | | 152 | | | | | | 8,245 | | |

| International: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Korea | | | 1,334 | | | | | | 159 | | | | | | (25) | | | | | | — | | | | | | 134 | | | | | | 1,468 | | |

| All Other | | | 3,104 | | | | | | 265 | | | | | | (86) | | | | | | — | | | | | | 179 | | | | | | 3,283 | | |

| Total International | | | 7,329 | | | | | | 620 | | | | | | (175) | | | | | | 4 | | | | | | 449 | | | | | | 7,778 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Total licensed | | | 15,422 | | | | | | 901 | | | | | | (304) | | | | | | 4 | | | | | | 601 | | | | | | 16,023 | | |

this high-growth market.

However, the COVID-19 outbreak may have an impact on consumer behaviors and customer traffic that may result in temporary changes in the seasonal fluctuations of our business.

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 2019, we realigned Starbucks operating segment reporting structure to better reflect the cumulative effect of our streamlining efforts.

Specifically, our previous China/Asia Pacific ("CAP") segment and Europe, Middle East, and Africa ("EMEA") segment have been combined into one International segment.

Concurrently, results of Siren Retail, a non-reportable operating segment consisting of Starbucks ReserveTM Roastery & Tasting Rooms, certain stores under the Starbucks Reserve brand and Princi operations, which were previously included within Corporate and Other, are now reported within the Americas and International segments based on the geographical location of the operations.

Certain markets within our International operations are either in various stages of development or undergoing transformations of their business models.

Historically our consumer packaged goods ("CPG") have been sold directly to grocery, warehouse club and specialty retail stores and through institutional foodservice companies.

With the establishment of the Global Coffee Alliance with Nestlé, a large portion of our Channel Development business transitioned to a licensed model in the fourth quarter of fiscal 2018.

Our collaborative relationships with PepsiCo, Inc., Anheuser-Busch InBev, Tingyi Holding Corp., Arla Foods and others for our global ready-to-drink beverage businesses in this segment are excluded from the Global Coffee Alliance.

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Company-operated stores | 9,974 | | | 55 | % | | 5,860 | | | 44 | % | | 15,834 | | | 51 | % |

| Licensed stores | 8,093 | | | 45 | % | | 7,329 | | | 56 | % | | 15,422 | | | 49 | % |

| U.S. | 8,575 | | | 412 | | | (196 | ) | | — | | | 216 | | | 8,791 | |

| Total Americas | 9,690 | | | 497 | | | (213 | ) | | — | | | 284 | | | 9,974 | |

| China | 3,521 | | | 629 | | | (27 | ) | | — | | | 602 | | | 4,123 | |

| Japan | 1,286 | | | 105 | | | (12 | ) | | — | | | 93 | | | 1,379 | |

| Thailand | 352 | | | 29 | | | (4 | ) | | (377 | ) | | (352 | ) | | — | |

| Total International | 5,651 | | | 773 | | | (105 | ) | | (459 | ) | | 209 | | | 5,860 | |

| Total company-operated | 15,341 | | | 1,270 | | | (318 | ) | | (459 | ) | | 493 | | | 15,834 | |

| | |

| --- | --- |

| (1) | International store data includes the transfer of 377 company-operated stores in Thailand to licensed stores as a result of the sale of operations late in the third quarter of fiscal 2019, and the transfer of 82 company-operated stores in France and the Netherlands to licensed stores as a result of the sales of operations in the second quarter of fiscal 2019. |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| U.S. | 6,031 | | | 318 | | | (99 | ) | | — | | | 219 | | | 6,250 | |

| Total Americas | 7,770 | | | 446 | | | (123 | ) | | — | | | 323 | | | 8,093 | |

| Korea | 1,231 | | | 128 | | | (25 | ) | | — | | | 103 | | | 1,334 | |

| All Other | 2,681 | | | 396 | | | (55 | ) | | 82 | | | 423 | | | 3,104 | |

| Total International | 6,201 | | | 776 | | | (107 | ) | | 459 | | | 1,128 | | | 7,329 | |

| Corporate and Other: | | | | | | | | | | | | | | | | | |

| Teavana | 12 | | | — | | | (12 | ) | | — | | | (12 | ) | | — | |

| Total Corporate and Other | 12 | | | — | | | (12 | ) | | — | | | (12 | ) | | — | |

| Total licensed | 13,983 | | | 1,222 | | | (242 | ) | | 459 | | | 1,439 | | | 15,422 | |

Historically, revenues have included domestic and international sales of our packaged coffee, tea and ready-to-drink products to grocery, warehouse club and specialty retail stores and through institutional foodservice companies.

With the establishment of the Global Coffee Alliance in the fourth quarter of fiscal 2018, other revenues include product sales to and licensing revenue from Nestlé under this arrangement and the amortization of the up-front prepaid royalty.

See [Note 1](#s5D815956884D590C810E9ABCDCDAFD4B), [Summary of Significant Accounting Policies](#sF96547A17F655DED9D44E4434E0DAAFE) - Deferred Revenues, for further information.

In

Employees

We believe our current relations with our employees are good.

| | | | | |

See [Note [removed: 15](#sC8222D0576ED5EFDABC1FBAAEC0EFEE1),] [added: 16](#i54ccc64cb5384be5a4849ef1cdef4dde_187),] Commitments and Contingencies, to the consolidated financial statements included in Item 8 of Part II of this 10-K for information regarding certain legal proceedings in which we are involved.

[removed: Form 10-K][added: Form 10-K]

For the Fiscal Year [removed: Ended September 29, 2019][added: Ended September 27, 2020]

Commission File [removed: Number: 0-20322][added: Number: 0-20322]

[removed: ][added: ]

| Washington | [added: | |] 91-1325671 | [added: | |]

| *(State of Incorporation)* | [added: | |] *(IRS Employer ID)* | [added: | |]

2401 Utah Avenue [removed: South, Seattle, Washington 98134][added: South, Seattle, Washington 98134]

[removed: (206) 447-1575][added: (206) 447-1575]

| Title of Each Class | [added: | |] Trading Symbol | [added: | |] Name of Each Exchange on Which Registered | [added: | |]

| Common Stock, $0.001 par value per share | [added: | |] SBUX | [added: | |] Nasdaq Global Select Market | [added: | |]

| Large accelerated filer | [added: | |] x | [added: | |] Accelerated filer | [added: | |] ¨ | [added: | |] Non-accelerated filer | [added: | |] ¨ | [added: | |] Smaller reporting company | [added: | |] ☐ | [added: | |]

| Emerging growth company | [added: | |] ☐ | | | | | | | [added: | | | | | | | | | | | | | |]

If an emerging growth company, indicate by [removed: checkmark] [added: 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.

The aggregate market value of the voting stock held by non-affiliates of the registrant as of the last business day of the registrant’s most recently completed second fiscal quarter, based upon the closing sale price of the registrant’s common stock on March [removed: 31, 2019] [added: 29, 2020] as reported on the NASDAQ Global Select Market was [removed: $89.8] [added: $77.4] billion.

As of November [removed: 8, 2019,] [added: 6, 2020,] there were [removed: 1,181.0] [added: 1,173.7] million shares of the registrant’s Common Stock outstanding.

Portions of the definitive Proxy Statement for the registrant’s Annual Meeting of Shareholders to be held on March [removed: 18, 2020] [added: 17, 2021] have been incorporated by reference into Part III of this Annual Report on Form 10-K.

| PART I | | | [added: | | | | | |]

| Item 1 | [removed: [Business](#s4B0268BC46255FE382CB8507D8208C72)] | [removed: [2](#s4B0268BC46255FE382CB8507D8208C72)] | [added: [Business](#i54ccc64cb5384be5a4849ef1cdef4dde_16) | | | [2](#i54ccc64cb5384be5a4849ef1cdef4dde_16) | | |]

| Item 1A | [added: | |] [Risk [removed: Factors](#sBBAA235699DE51D6918B492BDD8498DD)] [added: Factors](#i54ccc64cb5384be5a4849ef1cdef4dde_19)] | [removed: [9](#sBBAA235699DE51D6918B492BDD8498DD)] | [added: | [9](#i54ccc64cb5384be5a4849ef1cdef4dde_19) | | |]

| Item 1B | [added: | |] [Unresolved Staff [removed: Comments](#s41D12915E3C25CE1B14CD17DEBD49CEC)] [added: Comments](#i54ccc64cb5384be5a4849ef1cdef4dde_22)] | [removed: [17](#s41D12915E3C25CE1B14CD17DEBD49CEC)] | [added: | [19](#i54ccc64cb5384be5a4849ef1cdef4dde_22) | | |]

| Item 2 | [removed: [Properties](#s9E9E8DC17F0C5D0A8559A12997CF42E6)] | [removed: [17](#s9E9E8DC17F0C5D0A8559A12997CF42E6)] | [added: [Properties](#i54ccc64cb5384be5a4849ef1cdef4dde_25) | | | [19](#i54ccc64cb5384be5a4849ef1cdef4dde_25) | | |]

| Item 3 | [added: | |] [Legal [removed: Proceedings](#s12B71E1101D7591090E16A264E4ECD30)] [added: Proceedings](#i54ccc64cb5384be5a4849ef1cdef4dde_28)] | [removed: [17](#s12B71E1101D7591090E16A264E4ECD30)] | [added: | [19](#i54ccc64cb5384be5a4849ef1cdef4dde_28) | | |]

| Item 4 | [added: | |] [Mine Safety [removed: Disclosures](#sF64218A322B75B4D98C1C3522701C579)] [added: Disclosures](#i54ccc64cb5384be5a4849ef1cdef4dde_31)] | [removed: [17](#sF64218A322B75B4D98C1C3522701C579)] | [added: | [19](#i54ccc64cb5384be5a4849ef1cdef4dde_31) | | |]

| PART II | | | [added: | | | | | |]

| Item 5 | [added: | |] [Market for the Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity [removed: Securities](#s5497DFCFE49A5395B2C7FF6E73ABA028)] [added: Securities](#i54ccc64cb5384be5a4849ef1cdef4dde_37)] | [removed: [18](#s5497DFCFE49A5395B2C7FF6E73ABA028)] | [added: | [20](#i54ccc64cb5384be5a4849ef1cdef4dde_37) | | |]

| Item 6 | [added: | |] [Selected Financial [removed: Data](#s14B68583CA895857B93E38650FA902B3)] [added: Data](#i54ccc64cb5384be5a4849ef1cdef4dde_40)] | [removed: [20](#s14B68583CA895857B93E38650FA902B3)] | [added: | [22](#i54ccc64cb5384be5a4849ef1cdef4dde_40) | | |]

| Item 7 | [added: | |] [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#s8233F6FAC03C5CC5ADB9C4DBFEE462F0)] [added: Operations](#i54ccc64cb5384be5a4849ef1cdef4dde_43)] | [removed: [23](#s8233F6FAC03C5CC5ADB9C4DBFEE462F0)] | [added: | [25](#i54ccc64cb5384be5a4849ef1cdef4dde_43) | | |]

| Item 7A | [added: | |] [Quantitative and Qualitative Disclosures About Market [removed: Risk](#s25C6C9633B1A5CD695832F322CAB1AD3)] [added: Risk](#i54ccc64cb5384be5a4849ef1cdef4dde_97)] | [removed: [43](#s25C6C9633B1A5CD695832F322CAB1AD3)] | [added: | [46](#i54ccc64cb5384be5a4849ef1cdef4dde_97) | | |]

| Item 8 | [added: | |] [Financial Statements and Supplementary [removed: Data](#sD3387D2DFEF6553C83F5590EBFD5D1C7)] [added: Data](#i54ccc64cb5384be5a4849ef1cdef4dde_100)] | [removed: [44](#sD3387D2DFEF6553C83F5590EBFD5D1C7)] | [added: | [47](#i54ccc64cb5384be5a4849ef1cdef4dde_100) | | |]

| | [added: | |] [Index for Notes to Consolidated Financial [removed: Statements](#s9C58B06F43BF58CA99AF7B1CB36A42D7)] [added: Statements](#i54ccc64cb5384be5a4849ef1cdef4dde_124)] | [removed: [49](#s9C58B06F43BF58CA99AF7B1CB36A42D7)] | [added: | [52](#i54ccc64cb5384be5a4849ef1cdef4dde_124) | | |]

| | [added: | |] [Report of Independent Registered Public Accounting [removed: Firm](#sBA81D0A460D350ED94A40BC394D377D2)] [added: Firm](#i54ccc64cb5384be5a4849ef1cdef4dde_202)] | [removed: [84](#sBA81D0A460D350ED94A40BC394D377D2)] | [added: | [89](#i54ccc64cb5384be5a4849ef1cdef4dde_202) | | |]

| Item 9 | [added: | |] [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#s61ED196B2637580982BA1A40A365EF1B)] [added: Disclosure](#i54ccc64cb5384be5a4849ef1cdef4dde_205)] | [removed: [86](#s61ED196B2637580982BA1A40A365EF1B)] | [added: | [91](#i54ccc64cb5384be5a4849ef1cdef4dde_205) | | |]

| Item 9A | [added: | |] [Controls and [removed: Procedures](#s7E8A33344F335071BBCA67D9E80C3BC9)] [added: Procedures](#i54ccc64cb5384be5a4849ef1cdef4dde_208)] | [removed: [86](#s7E8A33344F335071BBCA67D9E80C3BC9)] | [added: | [91](#i54ccc64cb5384be5a4849ef1cdef4dde_208) | | |]

| Item 9B | [added: | |] [Other [removed: Information](#sD64F37552F7A54BAA1DF32E0E64B3EC0)] [added: Information](#i54ccc64cb5384be5a4849ef1cdef4dde_214)] | [removed: [88](#sD64F37552F7A54BAA1DF32E0E64B3EC0)] | [added: | [93](#i54ccc64cb5384be5a4849ef1cdef4dde_214) | | |]

| PART III | | | [added: | | | | | |]

| Item 10 | [added: | |] [Directors, Executive Officers and Corporate [removed: Governance](#sB73EE5D68E00503A8919C77EBB9921CE)] [added: Governance](#i54ccc64cb5384be5a4849ef1cdef4dde_220)] | [removed: [89](#sB73EE5D68E00503A8919C77EBB9921CE)] | [added: | [94](#i54ccc64cb5384be5a4849ef1cdef4dde_220) | | |]

| Item 11 | [added: | |] [Executive [removed: Compensation](#s017799CF03CC540F99E088D880760702)] [added: Compensation](#i54ccc64cb5384be5a4849ef1cdef4dde_223)] | [removed: [89](#s017799CF03CC540F99E088D880760702)] | [added: | [94](#i54ccc64cb5384be5a4849ef1cdef4dde_223) | | |]

| Item 12 | [added: | |] [Security Ownership of Certain Beneficial Owners and Management and Related Shareholder [removed: Matters](#sC5A78AA877C9595D8C6EA9E9D9848597)] [added: Matters](#i54ccc64cb5384be5a4849ef1cdef4dde_226)] | [removed: [89](#sC5A78AA877C9595D8C6EA9E9D9848597)] | [added: | [94](#i54ccc64cb5384be5a4849ef1cdef4dde_226) | | |]

| Item 13 | [added: | |] [Certain [removed: Relationships and Related Transactions, and] [added: Relationships](#i54ccc64cb5384be5a4849ef1cdef4dde_229)[,](#i54ccc64cb5384be5a4849ef1cdef4dde_229) [](#i54ccc64cb5384be5a4849ef1cdef4dde_229)[Related Transactions](#i54ccc64cb5384be5a4849ef1cdef4dde_229) [and] Director [removed: Independence](#s0B742EBF7B865F6085CC2462DED1DDB5)] [added: Independence](#i54ccc64cb5384be5a4849ef1cdef4dde_229)] | [removed: [89](#s0B742EBF7B865F6085CC2462DED1DDB5)] | [added: | [94](#i54ccc64cb5384be5a4849ef1cdef4dde_229) | | |]

| Item 14 | [added: | |] [Principal Accounting Fees and [removed: Services](#s39D792E68A9F59C9977FCD3FD34A77B2)] [added: Services](#i54ccc64cb5384be5a4849ef1cdef4dde_232)] | [removed: [89](#s39D792E68A9F59C9977FCD3FD34A77B2)] | [added: | [94](#i54ccc64cb5384be5a4849ef1cdef4dde_232) | | |]

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Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

STARBUCKS CORPORATION

For the Fiscal Year Ended September 27, 2020

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| [SIGNATURES](#i54ccc64cb5384be5a4849ef1cdef4dde_253) | | | | | | [104](#i54ccc64cb5384be5a4849ef1cdef4dde_253) | | |

Starbucks Corporation

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| --- | --- |

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| [SIGNATURES](#s276852C2E5225F14A174B3C5FFA952C3) | | [97](#s276852C2E5225F14A174B3C5FFA952C3) |

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| --- | --- |

| Location | [added: | |] Approximate Size in Square Feet | | | [added: | | |] Purpose | [added: | |]

| Minden, NV (Carson Valley) | [added: | |] 1,080,000 | | | [added: | | |] Roasting, warehousing and distribution | [added: | |]

| York, PA | [removed: 1,957,435] | | [added: 1,957,000] | [added: | | | | |] Roasting, warehousing and distribution | [added: | |]

| Lebanon, TN | [added: | |] 680,000 | | | [added: | | |] Warehousing and distribution | [added: | |]

| Auburn, WA | [added: | |] 491,000 | | | [added: | | |] Warehousing and distribution | [added: | |]

| Kent, WA | [added: | |] 510,000 | | | [added: | | |] Roasting and distribution | [added: | |]

| Seattle, WA | [removed: 1,283,000] | | [added: 1,288,000] | [added: | | | | |] Corporate administrative | [added: | |]

| Shanghai, China | [removed: 177,000] | | [added: 169,000] | [added: | | | | |] Corporate administrative | [added: | |]

As of September [removed: 29, 2019,] [added: 27, 2020,] Starbucks had [removed: 15,834] [added: 16,637] company-operated stores, almost all of which are leased.

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As of November [removed: 8, 2019,] [added: 6, 2020,] we had approximately 18,000 shareholders of record.

[removed: | (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. [removed: 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. |]

The following graph depicts the total return to shareholders from September [removed: 28, 2014] [added: 27, 2015] through September [removed: 29, 2019,] [added: 27, 2020,] relative to the performance of the Standard & Poor’s 500 Index, the NASDAQ Composite Index and the Standard & Poor’s 500 Consumer Discretionary Sector, a peer group that includes Starbucks.

All indices shown in the graph have been reset to a base of 100 as of September [removed: 28, 2014,] [added: 27, 2015,] and assume an investment of $100 on that date and the reinvestment of dividends paid since that date.

[removed: ][added: ]

| | [removed: Sep 28, 2014] | | [removed: | |] Sep 27, 2015 | | | | [added: | |] Oct 2, 2016 | | | | [added: | |] Oct 1, 2017 | | | | [added: | |] Sep 30, 2018 | | | | [added: | |] Sep 29, 2019 | | | [added: | | | Sep 27, 2020 | | |]

The timing, manner, price and amount of repurchases will be determined at our discretion, and the share repurchase program may be suspended, terminated or modified at any time for any reason.

On April 8, 2020, we announced a temporary suspension of our share repurchase program.

Repurchases pursuant to this program were last made in March 2020.

During the fourth fiscal quarter ended September 27, 2020, there was no share repurchase activity.

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| Starbucks Corporation | | | $ | 100.00 | | | | | $ | 94.64 | | | | | $ | 95.57 | | | | | $ | 103.49 | | | | | $ | 163.98 | | | | | $ | 159.64 | |

| S&P 500 | | | 100.00 | | | | | | 115.43 | | | | | | 136.91 | | | | | | 161.43 | | | | | | 168.30 | | | | | | 193.80 | | |

| NASDAQ Composite | | | 100.00 | | | | | | 116.42 | | | | | | 144.00 | | | | | | 180.24 | | | | | | 181.19 | | | | | | 255.40 | | |

| S&P Consumer Discretionary | | | 100.00 | | | | | | 109.64 | | | | | | 125.56 | | | | | | 166.41 | | | | | | 170.33 | | | | | | 219.55 | | |

The following table provides information regarding repurchases of our common stock during the quarter ended September 29, 2019:

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | 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) | | | | | | | | | | | | | |

| July 1, 2019 - July 28, 2019 | | 10,925,000 | | | $ | 89.32 | | | 10,925,000 | | | 41,773,146 | |

| July 29, 2019 - August 25, 2019 | | 8,267,159 | | | 95.61 | | | | 8,267,159 | | | 33,505,987 | |

| August 26, 2019 - September 29, 2019 | | 4,339,988 | | | 94.68 | | | | 4,339,988 | | | 29,165,999 | |

| Total | | 23,532,147 | | | $ | 92.52 | | | 23,532,147 | | | | |

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| --- | --- |

| (1) | Monthly information is presented by reference to our fiscal months during the fourth quarter of fiscal 2019. |

| (2) | Share repurchases are conducted under our ongoing share repurchase program announced in September 2001, which has no expiration date. |

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| Starbucks Corporation | $ | 100.00 | | | $ | 156.42 | | | $ | 148.03 | | | $ | 149.49 | | | $ | 161.87 | | | $ | 256.48 | |

| S&P 500 | 100.00 | | | | 99.39 | | | | 114.72 | | | | 136.07 | | | | 160.44 | | | | 167.27 | | |

| NASDAQ Composite | 100.00 | | | | 104.00 | | | | 121.08 | | | | 149.75 | | | | 187.44 | | | | 188.43 | | |

| S&P Consumer Discretionary | 100.00 | | | | 113.18 | | | | 124.09 | | | | 142.10 | | | | 188.34 | | | | 192.78 | | |

| [removed: |] As of and for the Fiscal Year [removed: Ended (1)] [added: Ended(1)] | [removed: Sept] [added: | | Sept 27, 2020 (52 Wks) | | | | | | Sept] 29, 2019 (52 [removed: Wks)] [added: Wks)] | | | | [removed: Sept] [added: | | Sept] 30, 2018 (52 [removed: Wks)] [added: Wks)] | | | | [removed: Oct] [added: | | Oct] 1, 2017 (52 [removed: Wks)] [added: Wks)] | | | | [removed: Oct] [added: | | Oct] 2, 2016 (53 [removed: Wks) | | | | Sep 27, 2015 (52 Wks)] [added: Wks)] | | |

| [removed: |] Results of Operations | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | |]

| [removed: |] Net revenues: | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | |]

| [removed: |] Company-operated stores | [added: | |] $ | [removed: 21,544.4] [added: 19,164.6] | | | [added: | |] $ | [removed: 19,690.3] [added: 21,544.4] | | | [added: | |] $ | [removed: 17,650.7] [added: 19,690.3] | | | [added: | |] $ | [removed: 16,844.1] [added: 17,650.7] | | | [added: | |] $ | [removed: 15,197.3] [added: 16,844.1] | |

| [removed: |] Licensed stores | [added: | | 2,327.1 | | | | | |] 2,875.0 | | | | [added: | |] 2,652.2 | | | | [removed: 2,355.0] | | [added: 2,355.0] | | [removed: 2,154.2] | | | | [removed: 1,861.9] [added: 2,154.2] | | |

| [removed: |] Other | [added: | | 2,026.3 | | | | | |] 2,089.2 | | | | [added: | |] 2,377.0 | | | | [removed: 2,381.1] | | [added: 2,381.1] | | [removed: 2,317.6] | | | | [removed: 2,103.5] [added: 2,317.6] | | |

| [removed: |] Total net revenues | [added: | |] $ | [removed: 26,508.6] [added: 23,518.0] | | | [added: | |] $ | [removed: 24,719.5] [added: 26,508.6] | | | [added: | |] $ | [removed: 22,386.8] [added: 24,719.5] | | | [added: | |] $ | [removed: 21,315.9] [added: 22,386.8] | | | [added: | |] $ | [removed: 19,162.7] [added: 21,315.9] | |

| [removed: |] Operating [removed: income/(loss)] [added: income] | [added: | |] $ | [removed: 4,077.9] [added: 1,561.7] | | | [added: | |] $ | [removed: 3,883.3] [added: 4,077.9] | | | [added: | |] $ | [removed: 4,134.7] [added: 3,883.3] | | | [added: | |] $ | [removed: 4,171.9] [added: 4,134.7] | | | [added: | |] $ | [removed: 3,601.0] [added: 4,171.9] | |

| [removed: |] Net earnings including noncontrolling [removed: interests (2)] [added: interests(2)] | [added: | | 924.7 | | | | | |] 3,594.6 | | | | [added: | |] 4,518.0 | | | | [removed: 2,884.9] | | [added: 2,884.9] | | [removed: 2,818.9] | | | | [removed: 2,759.3] [added: 2,818.9] | | |

| [removed: |] Net earnings/(loss) attributable to noncontrolling interests | [removed: (4.6] | | [removed: )] [added: (3.6)] | | [removed: (0.3] | | [removed: )] | | [removed: 0.2] [added: (4.6)] | | | | [removed: 1.2] | | [added: (0.3)] | | [removed: 1.9] | | | [added: | 0.2 | | | | | | 1.2 | | |]

| [removed: |] Net earnings attributable to [removed: Starbucks (2)] [added: Starbucks(2)] | [added: | | 928.3 | | | | | |] 3,599.2 | | | | [added: | |] 4,518.3 | | | | [removed: 2,884.7] | | [added: 2,884.7] | | [removed: 2,817.7] | | | | [removed: 2,757.4] [added: 2,817.7] | | |

| [removed: |] EPS — [removed: diluted (2)] [added: diluted(2)] | [added: | | 0.79 | | | | | |] 2.92 | | | | [added: | |] 3.24 | | | | [removed: 1.97] | | [added: 1.97] | | [removed: 1.90] | | | | [removed: 1.82] [added: 1.90] | | |

| [removed: |] Cash dividends declared per [removed: share] [added: share(3)] | [added: | | 1.23 | | | | | |] 1.49 | | | | [added: | |] 1.32 | | | | [removed: 1.05] | | [added: 1.05] | | [removed: 0.85] | | | | [removed: 0.68] [added: 0.85] | | |

| [removed: |] Net cash provided by operating [removed: activities (3)] [added: activities(4)] | [added: | | 1,597.8 | | | | | |] 5,047.0 | | | | [added: | |] 11,937.8 | | | | [removed: 4,251.8] | | [added: 4,251.8] | | [removed: 4,697.9] | | | | [removed: 3,881.5] [added: 4,697.9] | | |

| [removed: |] Capital expenditures (additions to property, plant and equipment) | [added: | | 1,483.6 | | | | | |] 1,806.6 | | | | [added: | |] 1,976.4 | | | | [removed: 1,519.4] | | [added: 1,519.4] | | [removed: 1,440.3] | | | | [removed: 1,303.7] [added: 1,440.3] | | |

| [removed: |] Balance Sheet | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | |]

| [removed: |] Total assets | [added: | |] $ | [removed: 19,219.6] [added: 29,374.5] | | | [added: | |] $ | [removed: 24,156.4] [added: 19,219.6] | | | [added: | |] $ | [removed: 14,365.6] [added: 24,156.4] | | | [added: | |] $ | [removed: 14,312.5] [added: 14,365.6] | | | [added: | |] $ | [removed: 12,404.1] [added: 14,312.5] | |

| [removed: |] Long-term debt (including current portion) | [added: | | 15,909.5 | | | | | |] 11,167.0 | | | | [added: | |] 9,440.1 | | | | [removed: 3,932.6] | | [added: 3,932.6] | | [removed: 3,585.2] | | | | [removed: 2,335.3] [added: 3,585.2] | | |

| [removed: |] Shareholders’ equity/(deficit) | [removed: (6,232.2] | | [removed: )] [added: (7,805.1)] | | [added: | | | | (6,232.2) | | | | | |] 1,169.5 | | | | [removed: 5,450.1] | | [added: 5,450.1] | | [removed: 5,884.0] | | | | [removed: 5,818.0] [added: 5,884.0] | | |

[removed: | (1) | Our fiscal year ends on the Sunday closest to September 30.] The fiscal year ending on October 2, 2016 included 53 weeks, with the 53rd week falling in our fourth fiscal quarter. [removed: |]

[removed: | (2) | Fiscal] [added: (2)Fiscal] 2018 results include a gain not subject to income tax of $1.4 billion resulting from the acquisition of our East China joint venture. [removed: The impact of the gain to our diluted EPS was $0.99. |]

[removed: | (3) | Net] [added: (4)Net] cash provided by operating activities for fiscal [removed: 2015 through] [added: 2016 and] fiscal 2017 has been adjusted for the adoption of new accounting guidance related to excess tax benefits as discussed in [Note [removed: 1](#s5D815956884D590C810E9ABCDCDAFD4B),] [added: 1](#i54ccc64cb5384be5a4849ef1cdef4dde_130),] Summary of Significant Accounting Policies. [removed: |]

| [removed: |] Fiscal Year Ended | [added: | |] Sep [added: 27, 2020 | | | | | | Sep] 29, 2019 | | | [added: | | |] Sep 30, 2018 | | | [added: | | |] Oct 1, 2017 | | | [added: | | |] Oct 2, 2016 | | | [removed: Sep 27, 2015 | |]

| [removed: |] Percentage change in comparable store [removed: sales (1)] [added: sales(1)] | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | |]

| [removed: |] Americas | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | |]

| [removed: |] Sales growth | [added: | | (12) | | % | | | |] 5 | [added: |] % | | [added: | |] 2 | [added: |] % | | [added: | |] 3 | [added: |] % | | [removed: 6] | [removed: %] | [added: 6] | [removed: 7] | % |

| [removed: |] Change in transactions | [added: | | (21) | | % | | | |] 2 | [added: |] % | | [removed: (1] | [removed: )%] | [added: (1)] | [removed: —] | % | | [removed: 1] | [added: | — | |] % | | [removed: 3] | [added: | 1 | |] % |

| [removed: |] Change in ticket | [added: | | 11 | | % | | | |] 3 | [added: |] % | | [added: | |] 3 | [added: |] % | | [added: | |] 4 | [added: |] % | | [removed: 5] | [removed: %] | [added: 5] | [removed: 4] | % |

| [added: International(2)] | [removed: International (2)] | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | |]

| [removed: |] Sales growth | [added: | | (19) | | % | | | |] 3 | [added: |] % | | [added: | |] 1 | [added: |] % | | [added: | |] 2 | [added: |] % | | [removed: 2] | [removed: %] | [added: 2] | [removed: 6] | % |

| [removed: |] Change in transactions | [added: | | (23) | | % | | | |] 1 | [added: |] % | | [removed: (1] | [removed: )%] | [added: (1)] | [removed: 1] | % | | [added: | |] 1 | [added: |] % | | [removed: 5] | [added: | 1 | |] % |

| [removed: |] Change in ticket | [removed: 2] | [added: | 5 | |] % | | [added: | |] 2 | [added: |] % | | [removed: 1] | [added: | 2 | |] % | | [added: | |] 1 | [added: |] % | | [added: | |] 1 | [added: |] % |

| [removed: |] Consolidated | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | |]

| [removed: |] Sales growth | [added: | | (14) | | % | | | |] 5 | [added: |] % | | [added: | |] 2 | [added: |] % | | [added: | |] 3 | [added: |] % | | [removed: 5] | [removed: %] | [added: 5] | [removed: 7] | % |

| [removed: |] Change in transactions | [added: | | (22) | | % | | | |] 1 | [added: |] % | | [removed: (1] | [removed: )%] | [added: (1)] | [removed: —] | % | | [removed: 1] | [added: | — | |] % | | [removed: 3] | [added: | 1 | |] % |

| [removed: |] Change in ticket | [removed: 3] | [added: | 10 | |] % | | [added: | |] 3 | [added: |] % | | [added: | |] 3 | [added: |] % | | [removed: 4] | [added: | 3 | |] % | | [added: | |] 4 | [added: |] % |

[removed: | (1) | Includes only Starbucks® company-operated stores open 13 months or longer.] Comparable store sales exclude the effect of fluctuations in foreign currency exchange rates and the results of our global Siren Retail operations. [removed: For fiscal year 2016, comparable store sales percentages were calculated excluding the 53rd week. |]

[removed: | (2) | Beginning] [added: (2)Beginning] in February of fiscal 2019, comparable store sales include the results of the transfer of 1,477 licensed stores in East China to company-operated retail stores as a result of the purchase of our East China joint venture in the first quarter of fiscal 2018. [removed: Beginning in December of fiscal 2016, comparable store sales include the results of the 1,009 company-operated stores acquired as part of the acquisition of Starbucks Japan in the first quarter of fiscal 2015. |]

| [removed: |] As of and for the Fiscal Year Ended | [added: | |] Sept [added: 27, 2020 (52 Wks) | | | | | | Sept] 29, 2019 (52 Wks) | | | [added: | | |] Sept 30, 2018 (52 Wks) | | | [added: | | |] Oct 1, 2017 (52 Wks) | | | [added: | | |] Oct 2, 2016 (53 Wks) | | | [removed: Sep 27, 2015 (52 Wks) | |]

| [removed: |] Net stores opened/(closed) and transferred during the year: | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | |]

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(1)Our fiscal year ends on the Sunday closest to September 30.

The impact of the gain to our diluted EPS was $0.99.

(3)Subsequent to our year-end, on September 30, 2020, we declared a cash dividend of $0.45 per share payable on November 27, 2020 to shareholders of record on November 12, 2020.

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(1)Includes only Starbucks® company-operated stores open 13 months or longer.

For fiscal year 2016, comparable store sales percentages were calculated excluding the 53rd week.

For fiscal year 2020, stores that were temporarily closed or operating at reduced hours due to the COVID-19 outbreak remained in comparable store sales while stores identified for permanent closure were removed.

Beginning in December of fiscal 2016, comparable store sales include the results of the 1,009 company-operated stores acquired as part of the acquisition of Starbucks Japan in the first quarter of fiscal 2015.

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| International(2) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Americas(1) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| International(2) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Corporate and Other (3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

(2)International store data includes in fiscal 2019 the transfer of 82 company-operated stores in France and the Netherlands to licensed stores as a result of the sales of operations in the second quarter and the transfer of 377 company-operated stores in Thailand to licensed stores as a result of the sale of operations late in the third quarter.

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| Fiscal Year Ended | [added: | |] Sep [removed: 29, 2019] [added: 27, 2020] | | | | [added: | |] Sep [removed: 30, 2018] [added: 29, 2019] | | | | [removed: Oct 1, 2017] | | [added: Sep 30, 2018] | [added: | |]

| Net revenues: | | | | | | | | | | | | [added: | | | | | |]

| Company-operated stores | [added: | |] $ | [removed: 21,544.4] [added: 19,164.6] | | | [added: | |] $ | [removed: 19,690.3] [added: 21,544.4] | | | [added: | |] $ | [removed: 17,650.7] [added: 19,690.3] | |

| Licensed stores | [removed: 2,875.0] | | [added: 2,327.1] | | [removed: 2,652.2] | | | | [removed: 2,355.0] [added: 2,875.0] | | | [added: | | | 2,652.2 | | |]

| Other | [removed: 2,089.2] | | [added: 2,026.3] | | [removed: 2,377.0] | | | | [removed: 2,381.1] [added: 2,089.2] | | | [added: | | | 2,377.0 | | |]

| Total net revenues | [removed: 26,508.6] | | [added: 23,518.0] | | [removed: 24,719.5] | | | | [removed: 22,386.8] [added: 26,508.6] | | | [added: | | | 24,719.5 | | |]

| Store operating expenses | [removed: 10,493.6] | | [added: 10,764.0] | | [removed: 9,472.2] | | | | [removed: 8,486.4] [added: 10,493.6] | | | [added: | | | 9,472.2 | | |]

| Other operating expenses | [removed: 371.0] | | [added: 430.3] | | [removed: 554.9] | | | | [removed: 518.0] [added: 371.0] | | | [added: | | | 554.9 | | |]

| Depreciation and amortization expenses | [removed: 1,377.3] | | [added: 1,431.3] | | [removed: 1,247.0] | | | | [removed: 1,011.4] [added: 1,377.3] | | | [added: | | | 1,247.0 | | |]

| General and administrative expenses | [removed: 1,824.1] | | [added: 1,679.6] | | [removed: 1,708.2] | | | | [removed: 1,408.4] [added: 1,824.1] | | | [added: | | | 1,708.2 | | |]

| Restructuring and impairments | [removed: 135.8] | | [added: 278.7] | | [removed: 224.4] | | | | [removed: 153.5] [added: 135.8] | | | [added: | | | 224.4 | | |]

| Total operating expenses | [removed: 22,728.7] | | [added: 22,278.8] | | [removed: 21,137.4] | | | | [removed: 18,643.5] [added: 22,728.7] | | | [added: | | | 21,137.4 | | |]

| Income from equity investees | [removed: 298.0] | | [added: 322.5] | | [removed: 301.2] | | | | [removed: 391.4] [added: 298.0] | | | [added: | | | 301.2 | | |]

| Operating income | [removed: 4,077.9] | | [added: 1,561.7] | | [removed: 3,883.3] | | | | [removed: 4,134.7] [added: 4,077.9] | | | [added: | | | 3,883.3 | | |]

| Gain resulting from acquisition of joint venture | [removed: —] | | [added: —] | | [removed: 1,376.4] | | | | — | | | [added: | | | 1,376.4 | | |]

| Net gain resulting from divestiture of certain operations | [removed: 622.8] | | [added: —] | | [removed: 499.2] | | | | [removed: 93.5] [added: 622.8] | | | [added: | | | 499.2 | | |]

| Interest income and other, net | [removed: 96.5] | | [added: 39.7] | | [removed: 191.4] | | | | [removed: 181.8] [added: 96.5] | | | [added: | | | 191.4 | | |]

| Interest expense | [removed: (331.0] | | [removed: )] [added: (437.0)] | | [removed: (170.3] | | [removed: )] | | [removed: (92.5] [added: (331.0)] | | [removed: )] | [added: | | | (170.3) | | |]

| Earnings before income taxes | [removed: 4,466.2] | | [added: 1,164.4] | | [removed: 5,780.0] | | | | [removed: 4,317.5] [added: 4,466.2] | | | [added: | | | 5,780.0 | | |]

| Income tax expense | [removed: 871.6] | | [added: 239.7] | | [removed: 1,262.0] | | | | [removed: 1,432.6] [added: 871.6] | | | [added: | | | 1,262.0 | | |]

| Net earnings including noncontrolling interests | [removed: 3,594.6] | | [added: 924.7] | | [removed: 4,518.0] | | | | [removed: 2,884.9] [added: 3,594.6] | | | [added: | | | 4,518.0 | | |]

| Net [removed: earnings/(loss)] [added: loss] attributable to noncontrolling interests | [removed: (4.6] | | [removed: )] [added: (3.6)] | | [removed: (0.3] | | [removed: )] | | [removed: 0.2] [added: (4.6)] | | | [added: | | | (0.3) | | |]