The decline in Q2 2024’s operating cash flow appears to have been driven by a combination of factors, including significant changes in working capital and larger cash outflows. Specifically, there were notable cash outflows from operating lease liabilities and other operating assets and liabilities, while certain working capital components (such as those related to inventories and accounts receivable) and adjustments like depreciation and amortization had different impacts compared to prior periods. These factors collectively resulted in a much lower net cash provided by operating activities in Q2 2024 compared to Q1 2024.  **[0000829224-24-000024_sbux-20240331.htm:4]** **[0000829224-24-000023_sbux-3312024xexhibit991.htm:13]** 

Why did Operating Cash Flow drop so drastically in Q2 2024?

What factors contributed to Free Cash Flow turning negative in Q2 2024?

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The dip in **cash and cash equivalents** in Q2 2024 was primarily due to significant outflows from both **investing** and **financing activities**. Specifically, the company experienced heavy expenditures on capital investments, major cash dividends, substantial share repurchases, and notable repayments of long-term debt, which together outweighed the cash generated from operating activities and a minor positive impact from exchange rate changes.  **[0000829224-24-000023_sbux-3312024xexhibit991.htm:13]** 

Why did cash and cash equivalents dip in Q2 2024?

The surge in long-term debt in Q2 2024 was driven by several factors. One key element was that new debt issuances exceeded debt repayments during the quarter, as evidenced by net cash used in financing activities, which included both factors.  **[0000829224-24-000024_sbux-20240331.htm:38]**  Additionally, adjustments in hedge accounting—particularly changes in fair value adjustments—and the impact of maturities and refinancing of specific debt instruments, such as the February and March 2024 notes, also contributed to the increase.  **[0000829224-24-000024_sbux-20240331.htm:18]** **[0000829224-24-000013_sbux-20231231.htm:16]** 

What drove the surge in long-term debt in Q2 2024?

The jump in total assets in Q4 2024 was primarily driven by **substantial investments in physical assets**, including a significant increase in **Property, Plant, and Equipment (Net)**, as well as **higher Operating Lease Right-of-Use Assets**. Additionally, there were modest increases in **Goodwill** and **Equity Investments** that further contributed to the rise, although these were partly offset by declines in **cash and cash equivalents** and **short-term investments**.  **[0000829224-24-000057_sbux-20240929.htm:83]** 

What contributed to the jump in total assets in Q4 2024?

Starbucks’ cash and cash equivalents rebounded in Q1 2025 largely because its financing activities shifted notably compared to the prior year. In Q1 2025, the company did not engage in share repurchases or long-term debt repayments, which significantly reduced cash outflows in that area. Although operating activities still experienced some headwinds and investing activities increased due to acquisitions and higher capital expenditures, the dramatic reduction in financing outflows helped reverse the previous period’s decline, resulting in a net increase of **$385.2 million** in cash.  **[0000829224-25-000014_sbux-20241229.htm:32]** **[0000829224-25-000014_sbux-20241229.htm:5]** 

Why did cash and cash equivalents rebound in Q1 2025?

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The **company-operated net revenues in Q2 2024** were lower primarily due to a **decline in comparable store sales**. Global comparable store sales fell by **4%**, driven by a **6% decline in transactions**, partially offset by a **2% increase in average ticket**; this trend was similarly reflected in North America (with a **7% drop in transactions** and a **4% rise in average ticket**) and internationally (with declines in both transactions and average ticket) **[0000829224-24-000024_sbux-20240331.htm:28]** **[0000829224-24-000023_sbux-3312024xexhibit991.htm:0]** **[0000829224-24-000023_sbux-3312024xexhibit991.htm:1]** .  **[SBUX_3381569_9]**  Additionally, **unfavorable foreign currency impacts** and a **challenging operating environment**—which included softening consumer sentiment, inflationary pressures, and disruptions from international conflicts—further contributed to the revenue decline **[0000829224-24-000024_sbux-20240331.htm:28]** .  **[0000829224-24-000024_sbux-20240331.htm:27]**  Although some of the impact was offset by incremental revenues from **1,454 net new company-operated stores** opened over the past 12 months, these factors collectively led to lower net revenues in Q2 2024.

Why were the company-operated net revenues lower in Q2 2024?

In Q2 2024, **operating income** was impacted by several factors. The decline was primarily driven by **lower revenues** and **higher fixed costs**, including increased spending on **wages and benefits** as well as **promotional activities**. Additionally, the absence of a one-time gain from the sale of the Seattle’s Best Coffee brand, which had bolstered results in the prior year, also contributed to the lower operating income.  **[0000829224-24-000023_sbux-3312024xexhibit991.htm:0]** **[0000829224-24-000024_sbux-20240331.htm:34]** **[0000829224-24-000023_sbux-3312024xexhibit991.htm:16]** 

Why was operating income so low in Q2 2024?

In Q2 2024, **Starbucks' drop in net earnings** was driven by several factors. There was a **4% decline in global comparable store sales** (with notable drops in key regions, including a 7% decline in the U.S. and an 11% decline in China), which affected overall performance. Additionally, the **operating margin contracted by 240 basis points to 12.8%**, mainly due to higher investments in store partner wages and benefits, increased promotional activities, and elevated general and administrative expenses. Moreover, the company experienced a **2% decline in consolidated net revenues to $8.6 billion**, compounded by a generally more challenging operating environment that necessitated a revision of fiscal year 2024 guidance.  **[0000829224-24-000024_sbux-20240331.htm:2]** **[0000829224-24-000023_sbux-3312024xexhibit991.htm:0]** 

What drove the drop in net earnings in Q2 2024?

EPS fell to **$0.68** in Q2 2024 due to several factors. First, there was a **2% decline in net revenues** driven by a **4% drop in global comparable store sales** caused by lower transactions, even though this was partially offset by higher average ticket sizes.  **[SBUX_3381569_9]** **[0000829224-24-000023_sbux-3312024xexhibit991.htm:0]**  Additionally, the **GAAP operating margin contracted by 240 basis points to 12.8%** due to lower revenue, higher investment in store partner wages and benefits, increased promotional activities, and greater general and administrative costs.  **[0000829224-24-000023_sbux-3312024xexhibit991.htm:0]**  Furthermore, challenges in key markets—such as a **3% decline in North American comparable sales** and an **11% decline in China**—combined with adverse impacts from severe weather and cautious consumer behavior, all contributed to the lower EPS.  **[SBUX_3381569_1]** **[SBUX_3381569_9]** **[0000829224-24-000023_sbux-3312024xexhibit991.htm:0]** **[SBUX_3381569_10]** 

Why did EPS fall to 0.68 in Q2 2024?

379f874687cc0cb95756c91f7a8b1cd2bd3a2ddff558e591e0560b107e31f073

34b8e96639ed82de33296bd41f34dee66c7f6310bd8b595e71e7009192386cf9

e188b76e46cf7b2935423e4321929c20a8e37c729be279b58d949fc66b84c270

Net Revenues - Company-operated stores (USD, millions)

Net Revenues - Licensed stores (USD, millions)

Net Revenues - Other (USD, millions)

Total Net Revenues (USD, millions)

Product and Distribution Costs (USD, millions)

Store Operating Expenses (USD, millions)

Other Operating Expenses (USD, millions)

Depreciation and Amortization Expenses (USD, millions)

General and Administrative Expenses (USD, millions)

Total Operating Expenses (USD, millions)

Income from Equity Investees (USD, millions)

Operating Income (USD, millions)

Interest Income and Other, Net (USD, millions)

Interest Expense (USD, millions)

Earnings Before Income Taxes (USD, millions)

Income Tax Expense (USD, millions)

Net Earnings Including Noncontrolling Interests (USD, millions)

Net Earnings Attributable to Noncontrolling Interests (USD, millions)

Net Earnings Attributable to Starbucks (USD, millions)

Earnings per Share - Basic (USD)

Earnings per Share - Diluted (USD)

Weighted Average Shares Outstanding - Basic (millions)

Weighted Average Shares Outstanding - Diluted (millions)

02fc48ae7a0390254ff16daab31998caf5cbf5590fa47bc149e137e4195bc9c1

8277308878c08c35c07c4b2e6643884aa40591e6bb29f905798239b57e9e94c8

Adjustments for Non-Cash Items (USD, millions)

Stock-Based Compensation (USD, millions)

Changes in Working Capital (USD, millions)

Capital Expenditures (CapEx) (USD, millions)

Proceeds from / Repayments of Debt (USD, millions)

Share Repurchases (USD, millions)

Dividend Payments (USD, millions)

Net Change in Cash (USD, millions)

f54ae2539f444beebe73668d29db77e63cf066f69258933ab99e15eae482c458

0e572ab352a0284782ebe8915f7651bbf250a79ac298f6ae38a745ce904dd661

9a8ee523287dd58067affa8826607b8cefa59a78c48b1351e5e1a5d05b456f99

North America

International

- United States

- China

- Other Countries

Channel Development

Corporate and Other

Americas

China/Asia Pacific

EMEA

All Other Segments

Total Revenue

e88714acd15e98d16b5d9e54865de83d7259d1aac1c5745ff151886a7eaf5930

aee987662f2d9a65d360a5727446c83b8a78597cd9ea9e1f5f41b976ae665e5e

STARBUCKS (SBUX)

Financials