Item 1. Business

General

In this Annual Report on Form 10-K (“10-K” or “Report”) for the fiscal year ended September 27, 2026 (“fiscal 2026”), Starbucks Corporation (together with its subsidiaries) is referred to as “Starbucks,” the “Company,” “we,” “us,” or “our.”

Starbucks is the premier roaster, marketer, and retailer of specialty coffee in the world, operating in 91 markets. Formed in 1985, Starbucks Corporation’s common stock trades on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “SBUX.” We purchase and roast high-quality coffees that we sell, along with handcrafted coffee, tea, and other beverages and a variety of high-quality food items through company-operated coffeehouses (previously referred to as “stores”). We also sell a variety of coffee and tea products and license our trademarks through other channels, such as licensed coffeehouses as well as grocery and foodservice through our Global Coffee Alliance with Nestlé S.A. (“Nestlé”). In addition to our flagship Starbucks Coffee® brand, we sell goods and services under the following brands: Teavana®, Ethos®, and Starbucks Reserve®.

Our primary objective is to maintain Starbucks standing as one of the most recognized and respected brands in the world. We believe the continuous investments in our brand and operations will deliver long-term targeted revenue and income growth. This includes expansion of our global coffeehouse base, adding coffeehouses in both existing, developed markets such as the U.S. and in higher growth markets, as well as optimizing the mix of company-operated and licensed coffeehouses around the world. In addition, by leveraging experiences gained through our coffeehouses and elsewhere, we continue to drive beverage, equipment, process, and technology innovation, including in our industry-leading digital platform. We strive to regularly offer consumers new, innovative coffee and other products in a variety of forms, across new categories and diverse channels.

In the fourth quarter of fiscal 2024, we announced our “Back to Starbucks” strategy, which was implemented with the goal to bring customers back to our coffeehouses and return to growth by revitalizing those coffeehouses, enhancing the customer experience, and improving efficiency. As part of this strategy, in fiscal 2025, we approved and executed restructuring plans involving the closure of coffeehouses and the transformation of our support organization. In fiscal 2026, we approved and executed restructuring plans to close additional coffeehouses, relocate certain support organization functions to an additional office in Nashville, Tennessee, continue the transformation of our global support organization and non-retail facilities, and reduce the future operational complexity of our Starbucks Reserve and Roastery locations. Refer to Note 18, Restructuring and Impairments, to the consolidated financial statements included in Item 8 of Part II of this 10-K, for further discussion.

Human Capital Management

For more than 50 years, we’ve put our people first – offering competitive pay, industry-leading benefits, and opportunities for career and skills development for every partner through our practices, policies, and benefits. Our focus is on offering the best job in retail – a place where partners are proud to wear the green apron. The strength of our workforce is one of the significant contributors to our success as a global brand. Therefore, one of our core strategies is to invest in, and support, our partners to differentiate our brand, products, and services in the competitive specialty coffee market, including the following areas of focus:

Oversight and Management

Belonging is one of our company values. We aim to be a welcoming, inclusive place where all partners are respected, supported in their growth, and able to bring their best. Working under these principles, our Partner Resources Organization is tasked with managing employment-related matters, including recruiting and hiring, onboarding and training, compensation planning, performance management, and professional development. Our Board of Directors (the “Board”) and Board committees provide oversight on certain human capital matters. As noted in its charter, our Compensation and Management Development Committee is responsible for periodically reviewing Starbucks partner resource programs and initiatives, including healthcare and other benefits, as well as our management development and succession planning practices and strategies. Our Audit and Compliance Committee works closely with the Risk Steering Committee, led by Starbucks chief financial officer and chief legal officer, to monitor and mitigate current and emerging labor and human capital management risks. The Board, through its committees, annually reviews and assesses the effectiveness of the Company’s responsible business and sustainability-related strategies and oversees key policies, practices, goals, programs, disclosure, and risks in these areas, including review of the Company’s Global Impact Report.

These reports and recommendations to the Board and its committees are part of the broader framework that guides how Starbucks should attract, retain, and develop a skilled workforce that aligns with our values and strategies. Our hiring practices are designed to select the most qualified candidate for every job.

We regularly conduct anonymous surveys to seek feedback from our partners on a variety of topics, including confidence in company leadership, competitiveness of our compensation and benefits package, career growth opportunities, and

recommendations on how we can remain an employer of choice. The results are shared with our partners and reviewed by senior leadership, who analyze areas of progress or deterioration and prioritize actions and activities in response to this feedback to drive meaningful improvements in partner engagement. Our management and cross-functional teams also work closely to evaluate human capital management issues such as partner retention, workplace safety, harassment, and bullying, as well as to implement measures to mitigate these issues.

Total Rewards

We have demonstrated a history of investing in our workforce by offering competitive salaries and wages by continuously assessing the current business environment and labor market. We have consistently made enhancements in wages in order to attract talent to support our growth strategy and to elevate the customer experience. To foster a stronger sense of ownership and align the interests of partners with shareholders, restricted stock units are provided to eligible non-executive partners under our broad-based stock incentive programs. Furthermore, we offer competitive pay and industry-leading benefits. Partners in the U.S., which is our largest and most mature market, can:

• Grow their careers with us. We prioritize internal development and advancement, with a focus on filling 90% of retail leadership roles from within, creating a way for our hourly partners to build a career at Starbucks.

• Get a college degree, on us. Through the Starbucks College Achievement Plan (SCAP), eligible U.S. partners can get 100% upfront tuition coverage for a first-time bachelor’s degree online at Arizona State University for partners working an average of 20 hours or more each week.

• Grow their savings. In fiscal 2026, more than 240,000 partners received a Bean Stock grant giving them an ownership stake in Starbucks.

• Obtain comprehensive healthcare coverage. We offer industry-leading health and wellbeing benefits for partners working an average of 20 hours or more each week.

• Extend parental leave. Starbucks covers up to 18 weeks of fully paid leave for birth parents, and up to 12 weeks of fully paid leave for non-birth parents for eligible U.S. retail partners working an average of 20 hours or more each week.

• Share in our success. Through the Best of Starbucks Reward, baristas and shift supervisors can earn up to an additional $1,200 per year when their coffeehouse meets key performance goals, recognizing teams that work together to deliver excellence.

To be an employer of choice and maintain the strength of our workforce, we consistently assess the current business environment and labor market to refine our compensation and benefits programs and other resources available to our partners. Starbucks remains focused on ensuring equal pay for equal work.

Outside of the U.S., we have provided other innovative benefits to help address market-specific needs, such as providing interest-free loans to our U.K. partners to help cover rental deposits and offering mental health services in Canada.

Opportunities to Grow

Starbucks programs and benefits are available to eligible partners and aim to create more opportunity for more people. With a focus on internal development, training and mentorship we’re striving to create more meaningful career opportunities for partners to grow their careers with Starbucks.

With our focus on filling 90% of U.S. retail leadership roles from within, this year, we expanded coffeehouse leadership opportunities in the U.S. with the introduction of the coffeehouse coach role. This new role supports both career growth for partners and increases leadership in coffeehouses, which is expected to drive more consistent performance in the business.

We support our partners' success through role-based training for coffeehouse partners and leaders, as well as ongoing learning and development opportunities. As our business changes, we provide additional training to ensure partners are prepared to adapt and succeed. This training may include, but is not limited to, enhanced safety and security protocols, new products and service offerings, the deployment of new technologies, and changes to operational practices. Across the organization, we periodically address a wide variety of topics such as performance-related goal setting and giving and receiving constructive feedback. Through the rollout of our Green Apron Service model — a foundational operating system that establishes repeatable, consistent, and scalable standards, across U.S. company-operated coffeehouses — we focus on delivering consistent, high-quality experiences with warmth and care that create moments of connection between partners and customers. The Green Apron Service model includes new routines and tools that give partners more time to focus on craft and connection, supported by technology that improves order flow and speed of service.

As of September 27, 2026, Starbucks employed approximately 306,000 people worldwide. In the U.S., Starbucks employed approximately 221,000 people, with approximately 214,000 in company-operated coffeehouses and the remainder in corporate support, coffeehouse development, roasting, manufacturing, warehousing, and distribution operations. Approximately 85,000 employees were employed outside of the U.S., with approximately 84,000 in company-operated coffeehouses and the remainder in regional support operations. Partners in approximately 6% of Starbucks U.S. company-operated coffeehouses are represented by unions. We believe our efforts in managing our workforce have been effective, evidenced by low turnover, a strong culture, and active employee participation.

Information about our Executive Officers

Name						Age						Position
Brian Niccol						52						chairman and chief executive officer
Cathy R. Smith						63						executive vice president, chief financial officer
Mike Grams						56						executive vice president, chief operating officer
Brady Brewer						53						chief executive officer, Starbucks International
Sara Kelly						47						executive vice president, chief partner officer

Brian Niccol joined Starbucks as chairman and chief executive officer in September 2024. Prior to joining Starbucks, Mr. Niccol served as a director and Chief Executive Officer of Chipotle Mexican Grill, Inc. from 2018 to 2024. Before joining Chipotle, he served as Chief Executive Officer of Taco Bell, a division of Yum! Brands, Inc., after having served as its President and Chief Marketing and Innovation Officer. Mr. Niccol also served in leadership roles at Pizza Hut, another division of Yum! Brands.

Cathy R. Smith joined Starbucks in March 2025 as executive vice president, chief financial officer. Prior to joining Starbucks, Ms. Smith served as Executive Vice President, Chief Financial Officer and Treasurer of Nordstrom, Inc., from 2023 to 2025. From 2020 to 2023, Ms. Smith served as Chief Financial and Administrative Officer for Bright Health Group, Inc. Previously, Ms. Smith served as the Chief Financial Officer for Target Corporation, Express Scripts Holding Company, Walmart International, and GameStop Corporation.

Mike Grams joined Starbucks in February 2025 as executive vice president, North America chief coffeehouse officer, and has served as executive vice president, chief operating officer since June 2025. Prior to joining Starbucks, Mr. Grams spent nearly thirty years at Taco Bell Corp. where he held various leadership positions, including President and Chief Operating Officer from 2020 to December 2024, Global Chief Operating Officer, General Manager, North America, Chief Operating Officer and Chief Development Officer.

Brady Brewer joined Starbucks in 2001 and has served as chief executive officer, Starbucks International since April 2024, where he is responsible for the teams across Asia Pacific, Europe, Middle East, Africa, Japan, Latin America, and the Caribbean, as well as Global Coffee Operations and the Company’s international licensed partners. From February 2020 through March 2024, he served as Starbucks executive vice president and chief marketing officer. His prior roles at Starbucks include senior vice president of Digital Customer Experience, chief operating officer for Starbucks Japan, and senior vice president, Marketing and Product for the Company’s China and Asia Pacific region.

Sara Kelly joined Starbucks in 2001 and has served as executive vice president and chief partner officer since 2022, where she is responsible for helping partners realize their career potential and building global partner capability to enable growth and deliver on the Company’s strategic plan. Prior to her current role, Ms. Kelly was senior vice president, Talent & Partner Experience from 2021 to 2022, and she served as vice president, Partner Resources.

Segment Financial Information

Segment information is prepared on the same basis that our chief executive officer (“ceo”), who is our Chief Operating Decision Maker (“CODM”), manages the segments, evaluates financial results, and makes key operating decisions.

We have three reportable operating segments: 1) North America, which is inclusive of the U.S. and Canada; 2) International, which is inclusive of China, Japan, Asia Pacific, Europe, Middle East, Africa, Latin America, and the Caribbean; and 3) Channel Development. Unallocated corporate expenses are reported within Corporate and Other. Revenues from our reportable operating segments as a percentage of total net revenues for fiscal 2026 were as follows: North America (76%), International (18%), and Channel Development (6%).

Our North America and International segments include both company-operated and licensed coffeehouses. Our North America segment is our most mature business and has achieved significant scale. Certain markets within our International operations are in various stages of development and may require more extensive support, relative to their current levels of revenue and operating income, than our North America operations.

Our Channel Development segment includes roasted whole bean and ground coffees, Starbucks-branded single-serve products, a variety of ready-to-drink beverages, such as Frappuccino® and Starbucks Doubleshot®, foodservice products, and other branded products sold worldwide outside of our company-operated and licensed coffeehouses. A large portion of our Channel Development business operates under a licensed model of the Global Coffee Alliance with Nestlé, while our global ready-to-drink businesses operate under collaborative relationships with PepsiCo, Inc., Nestlé, and others.

Revenue Components

We generate the majority of our revenues through company-operated coffeehouses and licensed coffeehouses.

Company-operated and Licensed Coffeehouse Summary as of September 27, 2026:

			North America						As a % of Total North America Coffeehouses						International						As a % of Total International Coffeehouses															Total						As a % of Total Coffeehouses
Company-operated coffeehouses			10,902						60		%				2,495						11		%													13,397						32		%
Licensed coffeehouses			7,274						40		%				20,936						89		%													28,210						68		%
Total			18,176						100		%				23,431						100		%													41,607						100		%

The mix of company-operated versus licensed coffeehouses in a given market generally varies based on several factors, including our ability to access desirable local retail space, the complexity, profitability, and expected ultimate size of the market for Starbucks, and our ability to leverage the support infrastructure within a geographic region.

Company-operated Coffeehouses

Revenue from company-operated coffeehouses accounted for 82% of total net revenues during fiscal 2026, which includes the impact of converting Starbucks retail operations in China from company-operated to licensed coffeehouses in the third quarter of fiscal 2026. Our retail objective is to be the leading retailer and brand of coffee and tea in each of our target markets by selling the finest quality coffee, tea, and related products, as well as complementary food offerings, and by providing each customer with a unique Starbucks Experience. The Starbucks Experience is built upon superior customer service through the Green Apron Service model, convenience, and a seamless digital experience as well as warm and welcoming coffeehouses 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 category share in a disciplined manner, by selectively opening additional coffeehouses in new and existing markets, as well as increasing sales in existing coffeehouses, to support our long-term strategic objective to maintain Starbucks standing as one of the most recognized and respected brands in the world. Coffeehouse growth in specific existing markets will vary due to many factors, including expected financial returns, the maturity of the market, economic conditions, consumer behavior, and the local business environment.

Company-operated coffeehouse data for the fiscal year ended September 27, 2026:

			Coffeehouses Open as of																														Coffeehouses Open as of
			Sep 28, 2025						Opened						Closed**(2)**						Transfers						Net						Sep 27, 2026
North America:
U.S.			10,047						220						(293)						—						(73)						9,974
Canada			967						10						(52)						—						(42)						925
Siren Retail			4						—						(1)						—						(1)						3
Total North America			11,018						230						(346)						—						(116)						10,902
International:
China(1)			8,009						143						(163)						(7,989)						(8,009)						—
Japan			1,883						78						(16)						—						62						1,945
U.K.			524						38						(79)						—						(41)						483
All Other			75						2						(13)						—						(11)						64
Siren Retail(1)			5						—						—						(2)						(2)						3
Total International			10,496						261						(271)						(7,991)						(8,001)						2,495
Total company-operated			21,514						491						(617)						(7,991)						(8,117)						13,397

(1)Includes the transfer of 7,991 company-operated coffeehouses to licensed coffeehouses following the conversion of Starbucks retail operations in China to our licensed joint venture model in the third quarter of fiscal 2026.

(2)Includes 266 and 250 coffeehouses closed in the year ended September 27, 2026, as part of our “Back to Starbucks” restructuring plans announced in the fourth quarters of fiscal 2025 and fiscal 2026, respectively.

Starbucks company-operated coffeehouses are typically located in high-traffic, high-visibility locations. Our ability to vary the size and format of our coffeehouses allows us to locate them in or near a variety of settings, including downtown and suburban retail centers, office buildings, university campuses, and rural and off-highway locations. We will continue to expand our coffeehouse portfolio to meet customers where they are with formats that provide a warm and welcoming environment, enable multiple opportunities to connect and gather, and provide attractive returns on invested capital.

Retail sales mix by product type for company-operated coffeehouses:

Fiscal Year Ended			Sep 27, 2026						Sep 28, 2025						Sep 29, 2024
Beverages			72		%				73		%				74		%
Food			24		%				23		%				23		%
Other(1)			4		%				4		%				3		%
Total			100		%				100		%				100		%

(1)“Other” primarily consists of serveware, packaged and single-serve coffees and teas, and ready-to-drink beverages, among other items.

Stored Value Cards

Our branded stored value card program (the “Starbucks Card”) is designed to provide customers with a convenient payment method, support gifting, and increase the frequency of coffeehouse visits by cardholders, in part through the related Starbucks® Rewards loyalty program where available. Starbucks Cards are issued to customers when they initially load them with an account balance. They can be obtained in our company-operated and most licensed coffeehouses in North America, China, Japan, and many of our other markets in our International segment. Starbucks Cards can also be obtained online, via the Starbucks Mobile App, and through other U.S. and international retailers. Customers may access their card balances by utilizing their Starbucks Card or the Starbucks Mobile App in participating coffeehouses.

Starbucks Mobile App and Loyalty Program

The Starbucks Mobile App provides customers with a seamless and personalized digital experience. Using the Mobile Order and Pay functionality, customers can place orders in advance for pick-up at certain participating locations in several markets. Customers can also access detailed ingredient and nutritional information across the menu directly through the app. Additionally, the app allows customers to access Starbucks Card balances and participate in the Starbucks Rewards program, which provides personalized offers, rewards, and other benefits. These capabilities are designed to support convenience, personalization, and customer engagement as part of Starbucks' broader digital platform.

The Starbucks Rewards loyalty program is designed to increase the frequency of coffeehouse visits by cardholders and is available in most of our markets. In nearly all markets, including the U.S. and Canada, customers who register their Starbucks Cards are automatically enrolled in the Starbucks Rewards program. Registered members can receive various benefits depending on factors such as the number of reward points (“Stars”) earned. In addition to using their Starbucks Cards, Starbucks Rewards members can earn Stars on qualifying purchases paid with cash, credit or debit cards, or selected mobile wallets at all company-operated coffeehouses and a majority of licensed coffeehouses in North America. During the second quarter of fiscal 2026, we reimagined the Starbucks Rewards program through the introduction of a tiered membership structure consisting of Green, Gold, and Reserve levels, designed to evolve with members as their engagement grows. Refer to Note 1, Summary of Significant Accounting Policies and Estimates, to the consolidated financial statements included in Item 8 of Part II of this 10-K, for further discussion of our Starbucks Cards and loyalty program.

Licensed Coffeehouses

Revenues from our licensed coffeehouses accounted for 12% of total net revenues in fiscal 2026. Licensed coffeehouses generally have a lower gross margin and a higher operating margin than company-operated coffeehouses. Under the licensed model, Starbucks receives a margin on branded products and supplies sold to the licensed coffeehouse operator along with a royalty on retail sales. Licensees are responsible for operating costs and capital investments, which more than offset the lower revenues we receive under the licensed coffeehouse model.

In our licensed coffeehouse operations, we seek to leverage the expertise of our local partners and share our operating and coffeehouse development experience. Licensees provide improved, and at times the only, access to desirable retail space. Most licensees are prominent retailers with in-depth market knowledge and access. As part of these arrangements, we sell coffee, tea, food, and related products to licensees for resale to customers and receive royalties and license fees from the licensees. We also sell certain equipment, such as coffee brewers and espresso machines, to our licensees for use in their operations. Licensee employees working in licensed retail locations are required to follow our detailed coffeehouse operating procedures and attend training classes similar to those given to employees in company-operated coffeehouses. In a limited number of international markets, we also use traditional franchising and include these coffeehouses in the results of operations from our other licensed coffeehouses.

Licensed coffeehouse data for the fiscal year ended September 27, 2026:

			Coffeehouses Open as of																														Coffeehouses Open as of
			Sep 28, 2025						Opened						Closed						Transfers						Net						Sep 27, 2026
North America:
U.S.			6,813						227						(236)						—						(9)						6,804
Canada			480						12						(22)						—						(10)						470
Total North America			7,293						239						(258)						—						(19)						7,274
International:
China (1)			—						437						(86)						7,989						8,340						8,340
Korea			2,077						164						(21)						—						143						2,220
Latin America			1,813						136						(8)						—						128						1,941
U.K.			900						60						(19)						—						41						941
Turkey			762						51						(4)						—						47						809
Taiwan			592						35						(8)						—						27						619
Indonesia			597						3						(7)						—						(4)						593
Thailand			550						35						(4)						—						31						581
Philippines			520						22						(2)						—						20						540
All Other			4,372						229						(251)						—						(22)						4,350
Siren Retail (1)			—						—						—						2						2						2
Total International			12,183						1,172						(410)						7,991						8,753						20,936
Total licensed			19,476						1,411						(668)						7,991						8,734						28,210

(1)Includes the transfer of 7,991 company-operated coffeehouses to licensed coffeehouses following the conversion of Starbucks retail operations in China to our licensed joint venture model in the third quarter of fiscal 2026.

Product Supply

The main raw material for our coffee products is coffee beans. Starbucks is committed to selling the finest whole bean coffees and coffee beverages. To help ensure compliance with our rigorous coffee standards, we generally control substantially all coffee purchasing, roasting, and packaging, and the global distribution of coffee used in our operations. Nestlé controls distribution of Starbucks packaged coffee products outside of Starbucks coffeehouses through the Global Coffee Alliance, and in some cases, also roasts and packages these products. We purchase green coffee beans from multiple coffee-producing regions around the world and custom roast them to our exacting standards for our many blends and single-origin coffees.

The price of coffee is subject to volatility. Over the past five years, coffee prices have experienced significant fluctuation, including a rapid increase to multi-year highs during fiscal 2024 and continuing into the first half of fiscal 2025. Although prices generally trended downward during fiscal 2026, volatility persisted, and coffee prices remained elevated relative to levels observed five years ago. Although most coffee trades in the commodity market, high-altitude arabica coffee of the quality sought by Starbucks tends to trade on a negotiated basis at a premium above the “C” coffee commodity price. Both the premium and the commodity price depend upon the supply and demand at the time of purchase. Supply and price can be affected by multiple factors in the producing countries, including weather and extreme weather events, water supply quality and availability throughout the coffee production chain, natural disasters, crop disease and pests, general increases in farm inputs and costs of production, inventory levels, and political and economic conditions. Climate change may further exacerbate many of these factors. Price is also impacted by geopolitical conditions, including tariffs on coffee imports, tariff refunds and other trade controls, and by trading activities in the arabica coffee futures market, including hedge funds and commodity index funds. In addition, green coffee prices have been affected in the past, and may be affected in the future, by the actions of certain organizations and associations that have historically attempted to influence prices of green coffee through agreements establishing export quotas or by restricting coffee supplies.

We buy coffee using fixed-price and price-to-be-fixed purchase commitments, depending on market conditions, to secure an adequate supply of quality green coffee. We also utilize forward contracts and futures contracts to hedge “C” price exposure under our price-to-be-fixed green coffee contracts and our long-term forecasted coffee demand where underlying fixed-price and price-to-be-fixed contracts are not yet available. Total purchase commitments, together with existing inventory and anticipated future contracts, are expected to provide an adequate supply of green coffee through fiscal 2027.

We depend upon our relationships with coffee producers, outside trading companies, and exporters for our supply of green coffee. We believe, based on the established relationship and historical performance of our suppliers, that the risk of non-delivery on such purchase commitments is remote.

To help ensure the future supply of high-quality green coffee and to reinforce our leadership role in the coffee industry, Starbucks operates ten farmer support centers, which are staffed with agronomists and sustainability experts who work with coffee farming communities to promote best practices in coffee production designed to improve both coffee quality and yields as well as agronomy support to address climate change and other impacts.

In addition to coffee, we also purchase significant amounts of dairy, particularly fluid milk, and to a lesser degree, plant-based dairy-free alternative products, such as oat milk and almond milk, to support the needs of our company-operated coffeehouses. We believe, based on the established relationship and historical performance of our dairy and plant-based dairy-free suppliers, that the risk of non-delivery of sufficient fluid milk and plant-based dairy-free alternatives to support our coffeehouses generally is remote.

Products other than whole bean coffees and coffee beverages sold in Starbucks coffeehouses include tea and a number of ready-to-drink beverages that are purchased from several specialty suppliers, usually under long-term supply contracts. Food products, such as pastries, breakfast sandwiches, and lunch items, are purchased from national, regional, and local sources. We also purchase a broad range of paper and plastic products, such as cups and cutlery, from several companies to support the needs of our retail coffeehouses as well as our manufacturing and distribution operations. We believe, based on the established relationship and historical performance of our suppliers and manufacturers, that the risk of non-delivery of sufficient amounts of these items generally is remote.

Other Revenues

Other revenues primarily are recorded in our Channel Development segment and include sales of packaged coffee and tea, and ready-to-drink beverages to customers outside of our company-operated and licensed coffeehouses, as well as royalties received from Nestlé under the Global Coffee Alliance and other collaborative partnerships.

Competition

Our primary competitors for coffee beverage sales are specialty coffee retailers and shops. We believe that our customers choose among specialty coffee retailers and shops primarily on the basis of product quality, brand reputation, service, experience, and convenience, as well as price. We continue to experience direct competition from large competitors in the quick-service restaurant sector and the ready-to-drink coffee beverage market, in addition to both well-established and start-up companies in many international markets. We also compete with restaurants and other specialty retailers for prime retail locations and qualified personnel to operate both new and existing coffeehouses.

Our coffee and tea products sold through our Channel Development segment compete directly against specialty coffees and teas sold through grocery stores, warehouse clubs, specialty retailers, convenience stores, and foodservice accounts and also compete indirectly against all other coffees and teas on the market.

Trademarks, Copyrights, Patents, and Domain Names

Starbucks owns and has applied to register numerous trademarks and service marks in the U.S. and in other countries throughout the world. Some of our trademarks, including Starbucks, the Starbucks logo, Starbucks Reserve, and Frappuccino, are of material importance. The duration of trademark registrations varies from country to country. However, trademarks are generally valid and may be renewed indefinitely as long as they are in use and/or their registrations are properly maintained.

We own numerous copyrights for items such as product packaging, promotional materials, in-store graphics, and training materials. We also hold patents on certain products, systems, and designs, which have an average remaining duration of approximately fifteen years. In addition, Starbucks has registered and maintains numerous Internet domain names, including “Starbucks.com,” “Starbucks.net,” and “Starbucksreserve.com.”

Seasonality and Quarterly Results

Our business is subject to moderate seasonal fluctuations, of which our second fiscal quarter typically experiences lower revenues and operating income. Additionally, as Starbucks Cards are issued to, and loaded by, customers during the holiday season, we tend to have higher cash flows from operations during the first quarter of the fiscal year. However, since revenues from Starbucks Cards are recognized upon redemption and not when cash is loaded onto the Starbucks Cards, the impact of seasonal fluctuations on the consolidated statements of earnings is much less pronounced. As a result of moderate seasonal fluctuations, results for any quarter are not necessarily indicative of the results that may be achieved for the full fiscal year.

Government Regulation

As a company with global operations, we are subject to the laws and regulations of the United States and the multiple foreign jurisdictions in which we operate as well as the rules, reporting obligations, and interpretations of all such requirements and obligations by various governing bodies, which may differ among jurisdictions. In addition, changes to such laws, regulations, rules, reporting obligations, and related compliance obligations could result in significant costs but are not expected to have a material effect on our capital expenditures, results of operations, and competitive position as compared to prior periods.

Available Information

Starbucks Annual Report on Form 10-K reports, along with all other reports and amendments filed with or furnished to the SEC, are publicly available free of charge on the Investor Relations section of our website at investor.starbucks.com as soon as reasonably practicable after these materials are filed with or furnished to the SEC. In addition, the SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov. Our corporate governance policies, code of ethics, and Board committee charters and policies are also posted on the Investor Relations section of our website. We also use the Investor Relations section of our website and our social media channels as tools to disclose important information about the Company and comply with our disclosure obligations under Regulation Fair Disclosure. We encourage investors and others to review the information we make public on the Investor Relations section of our website and our social media channels, as such information could be deemed material information. The information on our website (or any webpages referenced in this Report) or our social media channels is not part of this or any other report Starbucks files with, or furnishes to, the SEC, and all website addresses in this report are intended to be inactive textual references only.