Starbucks Corp. · Risk factors

Prior heading: 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.

We believe we have built an excellent reputation globally for the quality of our products, for delivery of a consistently positive consumer experience, and for our global environmental and social impact programs. The Starbucks brand is recognized throughout most of the world, and we have received high ratings in global brand value studies. To be successful in the future, particularly outside of the U.S. where the Starbucks brand and our other brands are less well-known, we believe we must preserve, grow, and leverage the value of our brands across all sales channels. Brand value is based in part on consumer perceptions on a variety of subjective qualities. Erosion of trust in our brand value can be caused by isolated or recurring incidents originating both from us or our business partners, or from external events. Such incidents can potentially trigger boycotts of our stores channels. Various factors, events, or conditions may result in civil or criminal liability, which can have a negative impact on our financial results. Incidents that can erode diminution or erosion of trust in our brand value 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 diseases, safety-related incidents, or other potential incidents value. Adverse developments pertaining to the matters discussed elsewhere in this risk factors section. section may negatively impact the value of our brands. Such developments may include difficulties executing strategic initiatives, adapting to shifting consumer preferences, or managing global operations, and challenges stemming from macroeconomic volatility, supply chain pressures and disruptions, or an evolving competitive, regulatory, social, and geopolitical landscape. The impact of such incidents developments on the value of our brands may be exacerbated if they receive considerable publicity, including rapidly through social or digital media (including for malicious reasons), publicity or if they result in litigation. Negative postings The value of our brands may be affected by actual or comments on social media perceived developments, whether isolated or networking websites recurring, whether the result of actions by us or our business partners or the result of external developments, and whether such developments are in our control. Negative commentary about Starbucks, even if inaccurate or malicious, have has in the past, and could in the future, generate damage the value of our brand, and adverse impacts may be compounded by social media, video-sharing, and messaging platforms that could dramatically increase the speed with which negative publicity about Starbucks across media channels may be disseminated, often before we have a meaningful opportunity to investigate, respond to, and address an issue. In addition, we cannot ensure that could damage our store partners, licensees, or other business partners will not act or refrain from acting in a manner that adversely affects the value and relevance of our brand. It Because brand value is based in part on consumer perceptions on a variety of subjective qualities, it may be difficult to address such negative publicity, including as a result developments negatively impacting the value of fictitious media content (such as content produced by generative artificial intelligence our brands in a timely and effective manner to mitigate harm. The diminution of, or bad actors) across media channels. Additionally, consumer erosion of trust in, our brand value may have negative consequences for the Company. Consumer demand for our products and our brand value could diminish significantly if we, we or our employees, licensees, or other business partners fail to preserve the quality of our products, act or act, or are perceived to act act, in an unethical, illegal, racially-biased, unequal, inequitable, or socially irresponsible manner, including with respect to the sourcing, content, or sale of our products, service and treatment of customers at Starbucks stores, treatment of employees, including our responses to unionization efforts, or otherwise inappropriate manner. To the use of customer data for general or direct marketing or other purposes. Allegations, even if untrue, that we are not respecting internationally recognized human rights, are failing extent third parties object to comply with applicable workplace and labor laws, or are aligned with positions on social actions or geopolitical issues could also negatively impact our brand value. Additionally, if we fail to comply with laws and regulations, take controversial positions taken or actions, fail perceived to deliver a consistently positive consumer experience in each of our markets, including have been taken by failing to invest in the right balance of wages and benefits to attract and retain employees who represent the brand well, or fail to foster an inclusive and diverse environment, our brand value us, it may be diminished. In addition, we cannot ensure that generate negative sentiment around our store partners, licensees, or other business partners will not take actions that adversely affect business. Developments affecting the value and relevance of our brand. Furthermore, if we are not effective in making sufficient progress toward our environmental and social program goals, consumer trust in our brand may suffer, and this perception could result brands have in negative publicity or litigation. The ongoing relevance of our brand may depend on making sufficient progress toward our environmental and social program goals, each of which requires company-wide coordination and alignment. Increased public focus, including by governmental and nongovernmental organizations, on environmental sustainability matters, including climate change, diminishing energy and water resources, packaging and waste, deforestation, biodiversity loss, greenhouse gas emissions, the past, and land use, may result in increased pressure to set goals and take actions to meet them, which could expose us to market, operational, and execution costs or risks. Statements regarding our environmental and social program goals reflect our current plans and aspirations; our environmental and social program-related policies, practices, and goals are voluntary, challenging, and subject to change at our discretion. Some third parties may object to the scope or nature future, trigger boycotts of our environmental stores, products, and social program initiatives or goals, or any revisions to brand. Each of these initiatives or goals, which could give rise to negative responses by governmental actors (such as retaliatory legislative treatment), consumers (such as boycotts or negative publicity campaigns), or other third parties that consequences, individually and collectively, could adversely affect have potentially material impacts on our brand value.value, business performance, and financial results.

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Prior heading: We may not be successful in our marketing strategies, promotional and advertising plans, and pricing strategies.

Our continued success depends in part on our ability to adjust our marketing strategies, promotional and advertising plans, adapt brand, marketing, promotional, advertising, and pricing strategies to respond quickly and effectively to shifting economic and conditions, competitive conditions as well as pressures, and evolving customer preferences. We operate in a complex and costly marketing, promotional, and advertising environment. Competition to attract and retain high-quality marketing partners and endorsers has increased. Our decisions environment. Decisions to collaborate or to cease refrain from collaborating with certain endorsers or marketing partners in light of actions taken or statements made by them could seriously harm parties may impact our brand image with consumers and, as a result, could have an adverse effect on consequently, our sales and financial condition. performance. Our marketing, promotional, and advertising programs may not be successful in reaching always reach consumers in the way we intend. Our success depends in part on whether as intended, particularly given the allocation wide range of generational, geographical, cultural, and socioeconomic characteristics and channels of communication used by our advertising, promotional, customers, and marketing resources effective resource allocation across different channels, including digital, allows us to effectively and efficiently reach consumers in ways that are meaningful to them. is critical. Additionally, many factors, including factors such as operating costs, constraints, or changes, and our current and future competitors’ pricing and marketing competitor strategies, could significantly and inflation may affect our pricing strategies (including price reductions, promotions, discounts, coupons, or free goods), decisions, which may prevent us from competing effectively in certain geographies. could impact demand. For example, historically, in order to partially offset inflation and other increases in the costs of core operating resources, we have gradually increased menu prices. There can be there is no assurance that guarantee future cost increases, including as a result of inflation, can be offset by increased menu prices or that our current or future menu prices increases will be fully absorbed by our customers without any resulting change to their demand for our products. customers. If the advertising, promotional, and our marketing programs or our pricing strategies are not successful or are not as successful as those of our underperform relative to competitors, our sales and market share could decrease. Finally, consumers are focusing more on sustainability decline. Likewise, if we do not continuously strengthen our capabilities in marketing, data analytics (including artificial intelligence and the environmental impacts of Starbucks operations, as well as the alignment of Starbucks actions with its stated mission, values, machine learning) and promises. An inability innovation to meet understand and maintain or grow consumer expectations with respect to these issues could adversely affect interest, brand loyalty, and market share while strategically expanding into other profitable categories of the commercial beverage industry, our financial results.business could be negatively affected.

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Prior heading: 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.

We may not be able to implement important strategic initiatives in accordance with our expectations or that generate expected returns, which may result in an adverse impact on our business and financial results. These strategic initiatives, which include In conjunction with our broader Back to Starbucks plan, these strategic initiatives are designed to create growth, improve our results of operations, and drive long-term shareholder value, and include: •being an employer of choice value. Such initiatives include improving our service model, and investing in partners further transforming our non-retail support organization; enhancing partner investment to deliver a superior improve customer experience; •building experience; closing, renovating, and redesigning coffeehouses; strengthening our leadership position around coffee; •driving convenience, brand engagement, and in coffee; expanding digital relationships engagement through our mobile, loyalty, delivery, and digital capabilities both domestically and internationally; •simplifying store administrative tasks to allow international platforms; simplifying store partners to better engage with customers; •increasing operations; and responsibly growing our global footprint. We have in the scale of past and may in the Starbucks store footprint with disciplined global expansion future undertake restructuring initiatives, which have resulted, and continuing may continue to introduce flexible and unique store formats result, in certain markets; •adjusting rapidly to changing customer preferences and behaviors as a result the incurrence of changing economic conditions and increased global interest rates significant additional costs, and inflation; •moving our ability to a more licensed store model in certain markets achieve the anticipated cost savings and a more company-operated model in other markets; •creating new occasions in stores across all dayparts with new product offerings, including benefits from these actions is subject to many estimates and assumptions, which are subject to uncertainties. Such initiatives may be disruptive both internally and to our growing lunch food customers and beverage product lineup; •continuing may be viewed negatively by our stakeholders. We undertake these initiatives in the global growth context of our Channel Development business through ongoing efforts to adapt to shifting consumer behaviors amid economic volatility, optimize our supply, distribution, mix of licensed and licensing agreements with Nestlé company-operated stores, expand relevant product offerings across dayparts, and other Channel Development business partners; •delivering continued drive growth in our cold beverage business; •working to address the potential effects of climate change beverages and the Channel Development partnerships, while also advancing appropriate sustainability of our business; efforts, managing climate-related risks, and •reducing our reducing operating costs, particularly general and administrative expenses. In addition costs. Risks to other factors listed in this risk factors section, factors that may adversely affect the successful and timely implementation of these initiatives, which could have a material adverse impact on our business and financial results, initiatives include the following: •delays delays or cancellations of store openings for reasons beyond our control, such as potential shortages of materials and labor, delays in permits, due to labor or a material shortages, permit procurement issues, or lack of desirable suitable real estate locations available for lease at reasonable rates, any of which could keep us from meeting annual store opening targets in the U.S. and internationally; •not successfully scaling our supply chain infrastructure as we continue to expand; •not successfully adapting to customer or market factors affecting our estate; supply chain as we work to address sustainability goals scalability and mitigate the impacts of climate change; •inability to timely innovate with new product offerings, or the potential that such offerings may not be well-received by consumers; •delays sustainability challenges; underperformance or cancellations of remodels based on changes in macroeconomic conditions, changes delays in expected project benefits, product innovation; remodel disruptions or other factors; •construction cost increases associated with new store openings and remodeling of existing stores; •the challenges of company-wide overruns; coordination and alignment; •inability to identify or act on opportunities execution challenges; failure to deliver anticipated realize cost savings; •imposition of additional taxes by jurisdictions, such as on certain types of beverages or based on number of employees; •governmental regulations or other health guidelines concerning operations of stores, savings; increased taxation; regulatory constraints, including due to public health emergencies; •deterioration in our mandates; credit ratings, which could limit the availability of additional financing rating deterioration; and increase the cost of obtaining financing geopolitical instability. If these initiatives fail to fund deliver expected results or we do not fully realize their intended benefits, our initiatives; and •geopolitical instability financial performance may suffer. Additionally, prioritizing these efforts over other organizational needs or misallocating resources could materially impact our business and international conflicts. Effectively managing growth can be challenging, particularly as we continue to expand operating results. Managing growth—particularly in international markets where we must balance the need for flexibility and a degree of autonomy for markets—requires balancing local management against the need for consistency autonomy with consistency in our goals, policies, and standards. If Ineffectively balancing these imperatives could materially harm our business results and financial performance. Furthermore, we are not successful may be unsuccessful in implementing our strategic initiatives, or, in the event we undertake initiatives through large acquisitions, integrations, and divestitures, partnerships, joint ventures, or other strategic transactions. If we may be required are unable to evaluate whether certain assets, complete such transactions or successfully integrate and develop acquired businesses, including goodwill the effective management of integration activities, we could fail to achieve the expected increases in revenues and other intangibles, have become impaired. operating results or the anticipated synergies and cost savings. In the event past we record an impairment charge, have been, and in the future we may be, unable to realize the expected benefits of strategic transactions, or it may also take longer than expected to realize the expected benefits. This has in the past required, and may in the future require, us to assess potential impairment of assets, including goodwill and intangibles. Any resulting impairment charges could have a material impact on materially affect our financial results.

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Prior heading: Evolving consumer preferences and tastes, as well as adverse public or medical opinions about the health effects of consuming our products, may adversely affect our business.

Our continued success depends on our ability to attract attracting and retain retaining customers. Our financial results could Financial performance may be adversely affected by a shift in consumer spending away from outside-the-home food and beverages (such as a reduction in reduced discretionary spending); spending, lack of customer acceptance of new products (including due to price increases necessary to cover the costs of new products products, brands, or higher input costs), brands (such as the global expansion of the Starbucks brand), and platforms (such as features of our mobile technology, changes in our loyalty rewards programs, and our delivery services initiatives); platforms, or customers reducing their declining demand for our current offerings as new products are introduced. In addition, some of our products contain caffeine, dairy products, sugar, and other compounds and allergens, the health effects of which are the subject of public existing offerings. We have previously been, and regulatory scrutiny, including may in the suggestion of linkages future be, unable to a variety of adverse health effects. Particularly accurately predict consumer demand for our products. This has resulted, and may in the U.S., there is increasing consumer awareness of health risks, including obesity, as well as future result, in insufficient or excess inventory, increased consumer litigation based on alleged adverse health impacts inventory markdowns, and higher costs. Any of consumption these outcomes could adversely affect our results of various food operations and beverage products. An unfavorable report on the financial condition. Additionally, health effects of caffeine concerns related to ingredients such as caffeine, dairy, sugar, or other compounds present in our products, whether allergens—whether accurate or not accurate, imposition of additional not—along with increased litigation, regulation and regulatory scrutiny, or taxes on certain types of food and beverage components, or negative publicity ingredients, or litigation arising from certain health risks additives, could significantly reduce the demand for our beverages and food products and materially harm our business and results of operations. Changes in diet (whether due to changes results. Shifts in consumer behavior and eating habits, behavior, including dietary changes or use of weight-loss drugs, or other factors) could may also influence the demand for our offerings and materially harm our business and results of operations. Our financial results have been, and could continue to be, adversely affected by changes in macroeconomic conditions, including those discussed in more detail elsewhere in this risk factors section. Such changes have impacted, and could continue to impact, customer routines, employer “work-from-home” policies, and consumer behavior, including consumers’ ability or willingness to spend discretionary income on our products.impact sales.

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Prior heading: 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.

Our global business strategy, including our plans for new stores, branded products, and other initiatives, relies significantly on a variety of business partners, including licensees, joint venture partners, third-party manufacturers, distributors, and retailers, particularly for our entire global Channel Development business. Licensees, retailers, and foodservice operators These partners are often authorized to use our logos and provide deliver branded food, beverage, and other products directly to customers. We believe our customers expect the same quality of service regardless of whether they visit a licensed or company-operated store, so To maintain consistent customer experience, we provide training and support to, and monitor the operations of, oversight to certain of these licensees and other business partners. However, the product quality and service they deliver may still be diminished by any number of partners; however, factors beyond our control, including control—such as financial constraints or solvency issues, adherence to sanitation protocols and guidance, instability, labor shortages, or noncompliance with sanitation protocols—may affect the quality of their service and other factors. products. We do not have direct control over our business these partners and may not have lack visibility into their practices. operations. We also source our food, beverage, and other products from a wide variety broad network of domestic and international business partners, and in certain some cases, such products are produced or sourced by our licensees directly. source products independently. We do not monitor the quality of non-Starbucks products served by foodservice operators who are authorized to use our logos and provide branded products as part of their foodservice businesses. operators. Failures by our licensees or business providers partners to comply with the applicable laws or regulations of their markets, or to otherwise meet the brand standards consumers associate with our brand, may negatively impact our business. Additionally, inconsistent use or inadequate protection of our brand and other intellectual property assets, as well as the failure to protect our intellectual property, could erode consumer trust and diminish our brand value, which could result in a material negative impact on materially affect our financial results.

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Prior heading: Reported incidents involving food- or beverage-borne illnesses, tampering, adulteration, contamination, or mislabeling, whether or not accurate, could harm our business.

Instances or reports, whether true or not, of unclean water supply We may experience food or food-safety issues, beverage-safety incidents such as food- or beverage-borne illnesses, tampering, adulteration, contamination, and/or mislabeling, either during growing, manufacturing, packaging, transporting, storing, or preparation, have in the past severely injured the reputations adulteration during any stage of companies in the food and beverage processing, grocery, and quick-service restaurant sectors. Any report linking us to such instances, even when false, unfounded, production or inaccurate, could materially harm preparation. We rely on third-party suppliers for many of our sales ingredients and could lead finished products. A failure to product liability claims, meet quality standards—even if due to factors beyond our control—could result in public exposure, regulatory scrutiny or action, litigation (including product liability claims and class actions), or temporary store closures, or other adverse consequences. Validated food-safety issues can also result in regulatory action and may lead to a recall of impacted products. Clean water is critical to the preparation of coffee, tea, and other beverages, as well as ice for our cold beverages, and which could materially harm our ability to ensure adequate supplies of business. Additionally, clean water is essential for beverage preparation, and ice to our stores can access may be limited, particularly limited in some certain international locations. We continue to incorporate more products in markets. As we expand our food and beverage lineup that require time and offerings requiring temperature control, including freezing or refrigeration, which increases the risk of food-safety related incidents increases if correct temperatures proper conditions are not maintained during manufacturing, storage, distribution to stores, and at stores, due to mechanical malfunction failure or human error. We also face risk by relying on third-party food suppliers to manufacture finished products, and to provide error. Such incidents may harm our brand and transport ingredients reputation and finished products to could negatively impact our stores. The product quality business and service they deliver may be diminished by financial performance. Reports—whether accurate or not—of food- or beverage-safety issues such as contamination, mislabeling, or adulteration during any number stage of factors beyond our control. Potential food safety incidents, whether at production or preparation have historically harmed the reputations of companies in our stores, industry. Any perceived association with such incidents, even if unfounded, could harm our products, or involving reputation and materially impact our business partners, could lead and financial performance. Food-safety incidents involving competitors or shared suppliers, even if unrelated to wide public exposure, regulatory action, Starbucks, could generate negative publicity and potential litigation, which impact our sales regionally or globally. In addition, real or perceived concerns about food safety issues, such as phthalates, per- and polyfluoroalkyl substances (PFAS), microplastics or heavy metals in the U.S. food supply chain, could materially harm impact consumers’ confidence in our business. offerings. Confirmed food-safety issues may also result in product recalls. A widespread Starbucks product recall could result in lead to significant financial losses due to the costs of a recall, the destruction of product inventory, and from recall costs, inventory destruction, lost sales due to the unavailability of product for a period of time, and could also subject us to product liability claims sales, and negative publicity, all of which could materially harm our business. A decrease reputational damage. Declines in customer traffic because of food-safety concerns or due to safety concerns, negative publicity, product recalls, viral-contaminated food or beverage claims, or other food or beverage-safety claims or litigation, or as a result of a temporary closure of any of our stores, could materially harm our business and results of operations. Additionally, instances of food or beverage-safety issues, even those solely involving the restaurants or stores of competitors or of suppliers or distributors (regardless of whether we use or have used those suppliers or distributors), store closures could adversely affect our sales on a regional or global basis by resulting in negative publicity about us, even if no Starbucks suppliers or products are impacted, or the foodservice industry in general.operations.

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Prior heading: If we are unable to meet our projections for new store openings or efficiently maintain the attractiveness of our existing stores, our operating results could suffer.

Our growth depends in part on our ability to open new stores and operate them profitably on the forecasted timeline. In recent years, the within projected timelines. Store development costs of opening new stores increased have risen due in part to construction labor inflation and increased costs of materials material and equipment. In addition, we incur equipment expenses. Each new store involves substantial startup expenses each time we open a new store, and it takes time to ramp up the sales costs and profitability of a new store, during which ramp-up period costs during which profitability may be higher delayed as we train new partners and build up a customer base. If we are unable to build the customer base that we expect or fail to overcome the attract sufficient customers or offset higher startup expenses associated with new stores, our costs, new stores may not be as profitable as our existing stores. Our ability underperform relative to open and profitably operate new stores existing ones. Store development is also subject to various risks, such as the identification and availability of desirable locations; the negotiation of acceptable risks including site selection, lease terms; the need to obtain all required governmental permits (including zoning approvals) negotiations, permitting and comply with other regulatory requirements, including health and safety; the availability of capable contractors and subcontractors; increases in the cost and decreases in the availability of compliance, contractor availability, labor and building material; changes in weather, material costs, and external disruptions such as weather events, natural disasters, pandemics, or other acts of God that could delay construction and adversely affect guest traffic; our ability to hire and train qualified management and store partners; and general economic and business conditions. At each potential location, we compete with other foodservice and retail businesses pandemics. We also face competition for desirable development sites, construction prime locations, contractors, management personnel, partners, and other resources. It is also possible that our qualified personnel. Additionally, new stores may negatively impact the profitability of cannibalize sales from nearby existing stores nearby. If we are unable locations. Failure to successfully manage these risks, we risks could face result in increased costs and lower-than-anticipated lower-than-expected sales and earnings in future periods, which could have a material negative effect on earnings, materially affecting our operating results. In addition, we continue to improve our existing stores through remodels, upgrades, We also invest in remodeling and regular upkeep. maintaining existing stores. If the costs associated with remodels, upgrades, or regular upkeep are higher than anticipated, stores are closed for remodeling for exceed projections, closures last longer periods than planned, or remodeled stores do not perform as expected, underperform, we may not realize our projected return on investment, achieve expected returns, which could have a material negative effect on negatively impact our operating financial results.

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Prior heading: We are highly dependent on the financial performance of our North America operating segment.

Our financial performance is highly dependent heavily reliant on our North America operating segment, which comprised accounted for approximately 75% 74% of consolidated total net revenues in fiscal year 2024. If the North America operating segment revenue trends slow 2025. A slowdown or decline, especially decline in our U.S. market, this segment—particularly in the U.S.—has in the past, and could in the future, materially impact our overall business, as other segments may be unable to make up any significant shortfall, and our business and financial results could be adversely affected. Since not offset the North America segment is relatively mature shortfall. Given its maturity and produces role as the large majority primary source of our operating cash flows, such a slowdown or decline could result in flow, reduced cash flows for funding the expansion of performance in North America could limit our ability to fund international businesses and other initiatives expansion, strategic initiatives, and for returning cash to our shareholders.shareholder returns.

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Prior heading: Risks Related to Operating a Global Business

•We are highly dependent on the financial performance The International segment is a critical profit center. Achievement of our North America operating segment. •We are increasingly growth targets is partially dependent on sustained performance and growth internationally, particularly in the success markets operated by our larger regional licensees and in key company-owned markets outside North America. If one or more of certain these international markets in order fail to achieve our growth targets. •We face stable revenues and earnings—due to economic downturns or other factors—our consolidated results could be materially impacted. In addition to the risks as a global that apply to our business generally, wherever conducted, our International business may also be subject to certain additional risks and risks that could adversely affect take on a different magnitude or character in the context of our financial performance. •Our reliance international business. Success in international markets can depend on key business partners factors distinct from those in the U.S., including regional taste preferences, varying consumer acceptance of our products, and differing regulatory regimes across markets. International operations may adversely affect also face higher occupancy and operating costs due to elevated rents and regulatory compliance. Finally, because many markets are in earlier development stages, operating expenses as a percentage of revenue tend to be higher than in more established markets. Each of these factors present risks to our business performance and operations.financial results.

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Prior heading: We face risks as a global business that could adversely affect our financial performance.

We operate Operating in 87 markets globally. We encounter differing 89 global markets, we face diverse cultural, regulatory, geopolitical, and economic environments within and among the markets in which we operate, and our ability to achieve our business objectives depends on our ability to successfully navigate these differing environments. Our ability to meet customer expectations is complicated by the risks inherent in our global operating environment, and our global success is partially dependent depends on our ability to leverage operating successes navigating these differences effectively and leveraging operational strengths across multiple markets. Planned However, planned initiatives may not have appeal across multiple markets resonate uniformly with our customers and could drive unanticipated changes lead to unexpected shifts in customer perceptions and perception or market share. share. Our international operations are also subject to additional inherent risks of conducting business abroad, such as: •changes or uncertainties •Uncertainty in economic, legal, regulatory, social, and political conditions in our markets, as well as negative effects on U.S. businesses due to increasing conditions, including rising anti-American sentiment in certain markets; •restrictive actions of foreign or U.S. governmental authorities affecting •Governmental trade and foreign investment, especially during periods of heightened tension between the U.S. and such foreign governmental authorities, including protective measures investment restrictions, such as tariffs, export and customs duties duties, ownership limits, and tariffs, government intervention favoring favoritism toward local competitors, and restrictions on the level of foreign ownership; •delays competitors; •Economic or trade sanctions limiting product sourcing or business operations; •Delays in store openings for reasons beyond our control, competition with locally relevant competitors, due to external factors, competition, or a lack of desirable limited access to affordable real estate locations available for lease at reasonable rates, any of which could keep us from meeting annual store opening targets and, in turn, negatively impact net revenues, operating income, and earnings per share. •difficulty in staffing, developing, and managing foreign operations estate, potentially impacting financial performance; •Operational and supply chain logistics, challenges abroad, including ensuring the consistency of product quality and service, due to governmental actions affecting supply chain staffing, logistics, distance, language, product consistency, and cultural differences, as well as challenges in recruiting and retaining high-quality employees in local markets; •economic or trade sanctions affecting our ability to source products or conduct business in one or more of the markets in which we operate; •in developing economies, the language barriers; •Slower-than-expected growth rate in the portion of the population achieving sufficient levels of disposable income may not meet our projections; •interpretation in developing economies; •Complex and application varying interpretations of laws and regulations, including those relating related to taxes, tariffs, labor, merchandise, anti-bribery, privacy, and environmental, social, and governance issues; •local laws, policies, responsible business matters; •Local employment laws increasing the cost and conditions that make it more expensive complexity of hiring and complex termination; •Labor disruptions due to negotiate with, retain, or terminate employees; •labor strikes or work stoppages resulting from geopolitical instability or social unrest affecting one or more of the markets in which we operate; •local regulations, health guidelines, unrest; •Health and safety protocols regulations affecting our store operations; •the enforceability of •Challenges in enforcing intellectual property and contract rights; •foreign •Foreign currency exchange rate fluctuations or requirements to transact in specific currencies; •limitations on the repatriation of funds and foreign currency exchange restrictions due to current on currency use or new U.S. fund repatriation; and international regulations; •Licensing and •import or other import requirements that may hinder business licensing requirements. operations. Moreover, many of the foregoing risks are particularly acute in developing markets, which are important to our long-term growth prospects. An inability to effectively manage the risks associated with our international operations could adversely affect our business performance and financial results.

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Prior heading: Our reliance on key business partners may adversely affect our business and operations.

The Our growth of our business relies depends on the ability of our licensee partners to execute our strategies and implement our growth platforms and product innovations. Further, the degree to which we are able to enter into, maintain, develop, negotiate, and enforce appropriate terms Success also relies on negotiating, maintaining, and conditions of enforcing commercial and other agreements, as well as the and on partner performance of our business partners under such agreements, are critical to our business. Our international those agreements. International licensees may face capital constraints or other factors, including legal constraints, or financial constraints that may limit the speed at which they are able to expand and develop in a certain market. expansion. Our Channel Development business is heavily reliant on Nestlé, which has the holds global right rights to sell and distribute our certain Starbucks branded packaged goods and foodservice products to retailers and operators, with few exceptions. goods. If Nestlé fails to perform meet its distribution and marketing commitments under our agreements and/or fails to support, protect, and grow our brand in Channel Development, our Channel Development business could be adversely impacted for a period of time, present long-term challenges to obligations or support our brand, limit our ability to grow our it could materially impact Channel Development business, and have a material adverse impact on our business and overall financial results. Our Additionally, our retail licensed operations are concentrated in among a relatively small number of few large licensees. If they are not able licensees, and their inability to access sufficient capital or are grow effectively, including their inability to meet store development and renovation targets, could adversely affect performance in key markets. A failure by any of our large regional licensees or Channel Development business partners to grow the relevant Starbucks business, or otherwise unable perform its obligations under agreements with us, could adversely affect our performance. We may not have the ability to offset such poor performance or unwilling non-performance in the markets or verticals into which these parties extend Starbucks brand. Likewise, if we are unable to successfully operate maintain and grow their businesses, our relationships with these licensees and business partners, it could have a material adverse effect on adversely affect our results in the applicable markets.business performance and financial results.

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Prior heading: Increases in the cost of high-quality arabica coffee beans or other commodities or decreases in the availability of high-quality arabica coffee beans or other commodities could have an adverse impact on our business operations and financial results.

The availability and prices price of coffee beans and other commodities are subject to significant volatility. highly volatile. We purchase, roast, and sell high-quality whole bean arabica coffee beans and related coffee products. The high-quality arabica coffee of the quality we seek tends to trade on a negotiated basis coffee, which typically trades at a premium above the “C” commodity price. This premium depends upon, among other factors, the varies based on supply and demand at the time of purchase, and the amount of the premium can vary significantly. Increases in the “C” coffee commodity price increase the price of high-quality arabica coffee and significantly impact our ability to enter into secure fixed-price purchase commitments. contracts. We frequently often enter supply contracts whereby the agreements with defined quality, quantity, delivery period, and other negotiated terms are agreed upon, delivery terms, but the date, and therefore price, at which the base with pricing tied to future “C” coffee commodity price component will be fixed has not yet been established. The market rates. Coffee supply and price of coffee we purchase can also be affected pricing are influenced by multiple factors in the producing countries, such as weather, water supply quality including weather and availability throughout the coffee production chain, extreme weather events, water availability, natural disasters, crop disease and pests, general increases in farm disease, input costs and costs of production, costs, inventory levels, political and economic conditions, and the actions of certain by organizations and associations that have historically attempted seeking to influence prices of green coffee through agreements establishing export quotas or by restricting coffee supplies. global prices. Climate change may further exacerbate many of intensify these factors. For risks—for example, extreme weather conditions such as drought droughts or frost frosts in Brazil have impacted coffee prices in the past, and in the likely event that such weather conditions were to reoccur, become more frequent, and/or increase in severity in the future, they may have similar or worse consequences on coffee past driven price volatility. increases. Speculative trading in coffee commodities can also influence coffee prices. Because of contributes to volatility. Tariffs have also affected, and in the significance of coffee beans future may affect, our costs to procure coffee. Given coffee’s central role in our operations, combined with operations and our limited ability to only partially mitigate future fully hedge against price risk through purchasing practices and hedging activities, increases in the cost of high-quality arabica coffee beans increases, rising costs or supply shortages could have a material adverse materially impact on our profitability. In addition, if we are not able to purchase sufficient quantities of green coffee due profitability and ability to any of the above factors or due meet customer demand. We supply strategic products, including coffee, to a worldwide or regional shortage, our licensees, and we may not be able to fulfill the demand for our coffee, which could have a material adverse impact on our business operations and financial performance. limited ability to pass along increased costs. We also purchase rely on significant amounts quantities of dairy products, particularly fluid milk, products and to a lesser degree, plant-based dairy-free alternative products, alternatives, such as oat milk and almond milk, to support the needs of our company-operated retail stores. Additionally, as well as other commodities, commodities including tea and those related to food and beverage inputs, such as tea, cocoa, produce, baking ingredients, meats, eggs, and energy, as well as non-food and beverage inputs, such as the components that comprise our packaging materials, are important to our operations, as is the processing of these inputs. Increases in the cost of dairy products and other commodities, or lack of availability, whether due to supply shortages, delays or interruptions in processing, or otherwise, especially in international markets, could have a material adverse impact on our profitability. Similarly, materials. Price increases in the cost of, or lack of availability of, whether supply disruptions—whether due to supply shortages, or delays or interruptions in the processing of, plant-based alternatives could have a material adverse impact on delays, tariffs, or other factors—could materially affect our profitability.profitability, particularly in international markets.

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Prior heading: Our supply chain may be unable to fully support current and future business needs.

Even in the absence of without acute disruptions or interruptions, disruptions, our supply chain may be unable to not fully meet current or future business needs. There can be no assurance We cannot guarantee that our suppliers will be able to accommodate support our anticipated growth or continue to supply current quantities providing products at preferential current volumes or favorable prices and other terms. Delays or at all. An inability of our suppliers to provide products cost inefficiencies in a timely or cost-effective manner supply could impair our growth and have an adverse effect on adversely affect our business, financial condition, results of operations, and prospects. If we are unable to accurately forecast results. Inaccurate sales levels in each market or store and obtain sufficient ingredients forecasting or produce a sufficient supply to meet demand, we insufficient inventory may incur higher lead to expedited shipping costs and may temporarily run out of stock of certain products, which could negatively impact the enthusiasm of our customers costs, stockouts, and store partners. We have been, diminished customer and may in the future be, unable to fully address consumers’ demand partner satisfaction. Conversely, overestimating demand—especially for our products, particularly in the case of new offerings for which demand is higher than projected. Conversely, if demand does not meet our expectations, we have incurred, and could continue to incur, increased products—can result in inventory write-offs. Finally, if we are unable Failure to scale and improve our forecasting, planning, production, and logistics management, we could frustrate our customers, lose reduce sales, or diminish and harm our brand reputation.

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Prior heading: Interruption of our supply chain and our reliance on suppliers could affect our ability to produce or deliver our products and could negatively impact our business and profitability.

Any material interruption in disruption to our supply chain (such chain—such as material disruption of roasted coffee supply), whether due to the casualty loss of any of our a roasting plants, interruptions in service by our third-party logistic service providers or common carriers that ship goods within our distribution channels, plant, logistics interruptions, trade restrictions (such as increased tariffs or quotas, embargoes, or customs restrictions), restrictions, pandemics, social or labor unrest, labor shortages, natural disasters, or political disputes and military conflicts that cause a material disruption in our supply chain could have a negative material geopolitical conflicts—could materially impact on our business and our profitability. Additionally, our food, beverage, and other products are sourced from We rely on a wide variety broad network of domestic and international business partners suppliers to provide high-quality products in our supply chain operations and, compliance with applicable laws, and in certain cases, products are produced or sourced by our licensees directly. We rely on these suppliers to provide high-quality products and to comply with applicable laws. Our ability to find qualified suppliers who meet our standards and supply products in a timely and efficient manner is a significant challenge as As we increase update our fresh and prepared food offerings, especially with respect to goods sourced from outside the U.S. and sourcing from countries or regions with diminished infrastructure, developing or failing economies, limited infrastructure or which are experiencing political instability, labor discord, disruption or shortages, or social unrest. instability may present additional challenges. For certain products, we may rely depend on one or very few suppliers. A supplier’s a limited number of suppliers, and their failure to meet our standards, provide products in a timely and efficient manner, deliver on time, or comply with applicable laws is regulations—factors often beyond our control. These issues could have a material negative impact on control—could materially harm our business operations and profitability.financial results.

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Prior heading: Our financial condition and results of operations are subject to, and may be adversely affected by, a number of macroeconomic and other factors, many of which are largely outside our control.

As a retailer reliant on discretionary spending, our financial results are sensitive to macroeconomic conditions. A prolonged downturn or slow recovery may reduce consumer spending, leading to lower demand or shifts to lower-priced products. Factors such as job loss, inflation, interest rate changes, taxation, credit access, public health crises, trade disputes, and geopolitical instability can all impact consumer behavior, including spending and routines, potentially affecting demand for our products. Reduced customer traffic or transaction value without corresponding cost reductions could pressure margins. If economic uncertainty persists, consumers may adopt lasting changes in spending habits, potentially affecting our sales, profitability, and growth plans. Our operating results have been, and will continue to be, subject to a number of other macroeconomic and other factors, many of which are largely outside our control. Any one or more of the factors listed below or described elsewhere in this risk factors section could have a material adverse impact on our business, financial condition, or results of operations: •increases in •Rising real estate costs in certain domestic and international markets; •disruptions to our supply chain; •changes in climate, including changes to the frequency or severity of •Supply chain disruptions; •Climate change and extreme weather events, that impact the price and availability or cost of goods and services, energy, affecting input costs and other materials throughout our supply chain; •changes availability; •Changes in governmental rules and approaches to taxation; •adverse outcomes of litigation; •inflationary pressures tax laws and changes government regulations, such as the One Big Beautiful Bill Act, enacted in prevailing the U.S. in July 2025; •Adverse litigation outcomes; •Inflation and interest rates; •severe weather or other natural rate fluctuations; •Natural or man-made disasters affecting a large market or several closely located markets that may temporarily or for extended periods of time affect our retail business in such disrupting major markets; •government •Government shutdowns or the risk of government shutdowns, as well as the impact or expected impact of elections, both in the U.S. and in other markets around election-related impacts globally, including regime change and political and civil unrest; •Terminations of, or changes in, existing trade agreements among the world; •especially countries in our largest markets, which we operate; •Tariffs imposed on commodities or goods, including recent tariffs imposed or threatened to be imposed by the U.S. on other countries, and China, labor discord or disruption, any retaliation measures taken by such countries; •Labor unrest, geopolitical events, war, terrorism (including incidents targeting us), political instability, acts of terrorism, anti-American sentiment, or public violence, boycotts, increasing anti- American sentiment health crises—especially in certain markets, or hostilities, social unrest, key markets; and •Foreign currency exchange rate volatility. A disruption in the credit markets or health pandemics that lead to avoidance a downgrade of public places or restrictions our current credit rating could increase our future borrowing costs and impair our ability to access capital and credit markets on public gatherings such as in terms commercially acceptable to us, which could adversely affect our stores; liquidity and •fluctuations in foreign currency exchange rates. Unfavorable capital resources or significantly increase our cost of capital. Furthermore, unfavorable economic conditions could also adversely affect our suppliers and licensees, who in turn could experience cash flow problems, more costly or unavailable financing, credit defaults, and other financial hardships. This could lead to supplier or licensee insolvency, increase our bad debt expense, or cause us to increase the levels of unsecured credit that we provide to suppliers and licensees. Further, Additionally, the insolvency of any of our licensees could result in disrupted operations or our exit from a particular market, market and negatively impact our reputation.

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Prior heading: We face intense competition in each of our channels and markets, which could lead to reduced profitability.

The specialty coffee market is intensely competitive, including with respect to highly competitive across product quality, innovation, service, convenience (such as (e.g., delivery service and mobile ordering), and price, and we price. We face significant and increasing competition in all of these areas in each of our channels and markets. Accordingly, we markets and do not have hold leadership positions in all channels and markets. every segment. In the U.S., the ongoing focus by large competitors in the quick-service restaurant sector on selling high-quality specialty coffee beverages could lead to decreases in competitors offering coffee, tea, and other competitive products may reduce customer traffic to Starbucks® stores and/or average value per transaction, adversely affecting our sales and results of operations. Similarly, continued competition from well-established competitors, or transaction value. Globally, competition from large established brands, new entrants or well-funded smaller companies, in our domestic entrants, and international markets could smaller specialty operators may hinder growth and adversely affect impact sales. Furthermore, our sales and results of operations in those markets. Many small competitors also continue may attempt to open coffee specialty stores in many of gain market share by offering products at prices at or below those typically offered by our markets across the world, company, which in the aggregate may also lead to significant decreases of customer traffic require us to our stores in those markets. Increased competition globally in packaged coffee and tea increase spending on advertising and single-serve promotions and/or reduce prices. In packaged coffee, tea, and ready-to-drink coffee beverage markets, including segments, competition from new and large entrants to this market, could adversely well-funded players may affect the profitability of the Channel Development segment. In addition, not all of our competitors may seek to establish environmental or sustainability goals at a comparable level profitability. Our ability to ours, which could result in lower supply chain or operating costs for our competitors. We may incur increased costs associated with reducing carbon dioxide and other greenhouse gas emissions, reducing the use of plastic, or imposing performance obligations compete depends on our suppliers that could increase financial obligations for us product improvement and our business partners innovation, pricing, customer experience, and could affect our profitability. Additionally, if strategic investments in store development, technology, and digital engagement. If we are unable to respond to consumer demand for healthy beverages and foods, or our competitors respond more effectively, this could have a negative effect on our business. We believe our ability to compete successfully in the current market environment depends on our ability to improve existing products; successfully develop and introduce new products; price our products appropriately; deliver a satisfactory customer experience; manage our investments in store development, technology, digital engagement, and delivery; and respond effectively to However, our competitors’ actions or offerings or to unforeseen disruptive actions. There can be no assurance these strategies will be effective, and some competitive strategies may be effective at improving certain metrics while adversely affecting others, which not always succeed and could have the overall effect of harming our business. Furthermore, declines unintended consequences. Declines in general consumer demand for specialty coffee products for any reason, including due to consumer preference for other products, flattening demand for our products, changed customer daily routines or traffic to stores, or changed customer spending behaviors due demand—due to challenging shifting preferences, economic conditions, could have a negative effect on pressures, or changes in routines—could also negatively affect our business.

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Prior heading: Climate change may have an adverse impact on our business.

We recognize that there are inherent climate-related risks wherever are inherent to global business is conducted. For example, as we noted above, operations. Climate change can affect the supply and price pricing of coffee we purchase can also be affected by multiple factors in the producing countries, such as weather and water supply quality and availability. These factors may be caused by or exacerbated by climate change. Climate change may also result in decreased availability, less favorable pricing, or other adverse consequences for non-coffee inputs in our products. In addition due to impacts weather volatility, water scarcity, and other environmental factors in producing countries, climate change regions. It may affect the availability of also impact water in the markets in which we operate and expect to operate and elsewhere in availability across our supply chain, which could have adverse impacts on our business. We operate chain and markets. Operating in 87 markets globally. Our 89 global markets, our properties and operations may be vulnerable to the various adverse effects of climate change, which are predicted increasingly vulnerable to increase the frequency and severity of extreme weather events and other natural cycles such events—such as wildfires and droughts. Such events have the potential to droughts—which may disrupt our operations, cause store closures, disrupt the business of our third-party suppliers, and impact our close stores, affect customers and partners, all of which may cause us to suffer losses suppliers, and incur additional costs to maintain or resume operations.increase costs, potentially resulting in financial losses.

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Prior heading: Our business is subject to evolving corporate governance and public disclosure regulations and expectations, including with respect to environmental, social, and governance matters, that could expose us to numerous risks.

We are subject to changing rules and regulations promulgated by a number of regulators and organizations, including the SEC, the European Union, the Nasdaq Stock Market, evolving and the Financial Accounting Standards Board. These rules increasingly complex laws and regulations continue to evolve in scope and complexity, and many new requirements have been created in response to laws enacted by Congress from various authorities and state legislatures, which in certain cases may be regulatory bodies. These rules—often inconsistent with one another, making across jurisdictions—can increase compliance more difficult and uncertain. In addition, regulators, customers, investors, employees, uncertainty and other stakeholders are focusing administrative costs. Additionally, growing stakeholder focus on environmental, social, and governance (commonly referred to as “ESG”) responsible business matters and related disclosures and operational regulations. These changing rules, regulations, and stakeholder expectations have resulted in, and are likely to continue has led to result in, increased general and administrative expenses and increased management time heightened expectations and attention spent complying with or meeting regulatory requirements, such regulations and expectations. For example, developing and acting on initiatives within the scope of ESG, and collecting, measuring, and reporting ESG-related information and metrics can be costly, difficult, and time consuming and is subject as extended producer responsibility obligations that relate to evolving reporting standards, including the SEC’s climate-related reporting requirements and similar proposals by other international regulatory bodies. For example, our product packaging, the European Union’s EU’s Corporate Sustainability Reporting Directive (“CSRD”), with different implementation dates depending on company size and geographic location, has established extensive ESG-related disclosure requirements based on the European Sustainability Reporting Standards, including certain assurance obligations. The standards used to identify and collect the information and data required pursuant to Directive, or the CSRD are still developing and uncertain, and this lack state of certainty could result in increased costs related to complying with our reporting California’s new climate change disclosure requirements. The evolving obligations under the CSRD and could may increase compliance costs and the risk of failing to comply with the CSRD. We may also communicate certain initiatives and goals related to environmental matters, diversity, noncompliance. Implementing responsible sourcing, social investments, and other ESG-related matters in our SEC filings or in other public disclosures. These business initiatives and goals within the scope of ESG could reporting progress can be difficult costly, complex, and expensive to implement, the technologies needed subject to implement them may not be cost effective evolving standards, assumptions, and internal controls. Public disclosures may not advance at a sufficient pace, and we could be criticized for the accuracy, adequacy, accuracy or completeness of the disclosure. Further, statements about our ESG-related initiatives and goals, and progress toward those goals, may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, completeness, and assumptions that are subject to change in the future. Previously previously reported data may in the require future be adjusted adjustments. Failure to reflect improvements in the availability and quality of third-party data, changing assumptions, changes in the nature and scope of our operations, and other changes meet targets or goals adopted in circumstances. If connection with our ESG-related data, processes, and reporting are incomplete responsible business initiatives or inaccurate, otherwise respond to stakeholder expectations on these topics could harm our reputation, business, financial performance, reduce customer loyalty, and growth could be adversely affected. If we are unable to meet affect our ESG-related goals, commitments, initiatives, or evolving stakeholder financial performance. Inadequate progress on responsible business initiatives may also erode trust, trigger negative publicity, litigation, or industry expectations boycotts, and standards, if we change or are perceived expose us to have changed our goals, commitments, civil or initiatives, criminal liability. Objections from third parties or if we are perceived to have not responded appropriately governments to stakeholder interests in ESG issues, customers and consumers these initiatives may choose to stop purchasing our products result in reputational harm, administrative, legislative, or purchase products from another company public backlash, or a competitor, other adverse action, and could negatively impact our reputation, business, or financial condition may be adversely affected. In addition, we results or business performance. Such consequences could be criticized by shareholders, stakeholders, regulators, also result from actual or other interested parties for perceived changes to the scope or nature extent of our ESG initiatives or goals responsible business initiatives, or for any revisions to discontinuation thereof. Objections may come both from those who believe these goals. We have been and could continue to be subject to negative responses by governmental actors (such as anti-ESG legislation or retaliatory legislative treatment) or consumers (such as boycotts initiatives are overly ambitious or negative publicity campaigns) targeting Starbucks, which could adversely affect our reputation, business, financial performance, inappropriate, and growth.from those who believe they are not ambitious enough. As focus on these issues from consumers, government actors, and other stakeholders intensifies, the risks described in this section may increase.

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Prior heading: Certain activist shareholder actions have caused, and could continue to cause, us to incur expense, hinder execution of our business strategy, and adversely impact our stock price.

We actively regularly engage in discussions with our shareholders regarding further strengthening our to strengthen the Company and creating enhance long-term shareholder value. This ongoing dialogue can include certain divisive However, activist tactics, which campaigns can take many forms. Some shareholder activism, including potential proxy contests, has resulted in, and could in the future result in, substantial in significant costs, such as including legal fees and expenses, expenses and the diversion of management’s and our Board’s attention and resources from our businesses management and strategic plans. Additionally, public shareholder Board attention. Public activism could give rise to perceived uncertainties as to our future, adversely affect may also create uncertainty about our strategic direction, strain relationships with our customers, partners, licensees, or business partners, make it more difficult to attract and retain qualified personnel, stakeholders, hinder talent recruitment, and cause our stock price to fluctuate based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business. Activists or other shareholders holding a large portion of our outstanding shares will also have the ability volatility unrelated to exert a business fundamentals. Shareholders with substantial holdings may influence on actions requiring a shareholder vote, key decisions, including the election of directors, the approval of director elections, mergers, acquisitions, and other significant business transactions, shareholder proposals, and amendments to our governing documents. These risks could adversely materially affect our business and operating results.

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Prior heading: Failure to comply with applicable laws and changing legal and regulatory requirements could harm our business and financial results.

Our policies and procedures are designed to comply ensure compliance with all applicable laws, accounting regulations, and reporting requirements, tax rules, and other regulations and requirements, including those imposed by the SEC, Nasdaq, and foreign countries, as well as applicable jurisdictions. This includes trade, labor, healthcare, food and beverage, sanitation, safety, environmental, labeling, anti-bribery and corruption, and merchandise laws. Such laws and regulations These legal frameworks are complex and often subject to differing varying interpretations, which can lead to unintentional or unknown instances of may result in inadvertent non-compliance. For example, Regulatory shifts—such as changes in the enforcement priorities of regulators may also shift the impact of applicable regulations on the business and the costs necessary to ensure priorities—can increase compliance therewith, including through an expansion in the nature, scope, or complexity of matters on which we are required costs and expand reporting obligations. Failure to report. Changes in applicable environmental comply with such laws and regulations, including expanded or additional regulations and associated costs to limit carbon dioxide and other greenhouse gas emissions, to discourage could result in the use imposition of plastic, civil or to limit criminal liability. Environmental regulations are evolving, with new or impose additional costs on expanded rules targeting carbon emissions, plastic use, and commercial water use, consumption. These changes may result in increased lead to higher compliance costs, capital expenditures, incremental investments, and other financial obligations for us and our business partners, which could affect our potentially affecting profitability. Other examples of Additional emerging and potentially relevant requirements are regulations, such as import tariffs and restrictions grounded in, among other things, tied to alleged human rights abuses. In addition, our business is subject to complex and rapidly evolving U.S. and international laws and regulations regarding data privacy and data protection, and companies are under increased regulatory scrutiny relating to these matters. The Federal Trade Commission and many state attorneys general are also interpreting federal and state consumer protection laws to impose standards for the online collection, use, dissemination, and security of data. The interpretation and application of existing laws and regulations regarding data privacy and data protection are in flux, and authorities around the world are considering a number of additional legislative and regulatory proposals in this area. Current and future data privacy and data protection laws and regulations (including the General Data Protection Regulation and the California Consumer Privacy Act, discussed in more detail in this risk factors section, and other applicable international and U.S. privacy laws), or new interpretations of existing laws and regulations, may limit our ability to collect and use data, require us to otherwise modify our data processing practices and policies, or result in the possibility of fines, litigation, or orders, which may have an adverse effect on our business and results of operations. The burdens imposed by these and other laws and regulations that may be enacted, or new interpretations of existing and future laws and regulations, violations, may also require us to incur substantial costs in reaching compliance in a manner adverse to our business. impact operations. Certain jurisdictions in which our products are sold have imposed, or are considering imposing, new enacted or increased proposed taxes or other restrictions on the manufacture, distribution, or sale of some certain of our products, particularly our beverages, as a result of ingredients contained in our products. beverages containing caloric sweeteners. These taxes vary in scope and form: some apply to all beverages, including non-caloric beverages, while others apply only to beverages with a caloric sweetener (e.g., sugar). Similarly, some measures apply a single tax rate per ounce/liter on beverages containing over a certain amount of added sugar (or other sweetener), some apply a progressive tax rate depending upon the amount of added sugar (or other sweetener) measures vary in the beverage, structure and others may apply a flat tax rate on beverages containing any amount of added sugar (or other sweetener). For example, in the Netherlands, a consumption tax is applicable on cold non-alcoholic beverages (non-milk based) at a flat tax rate of 26.13 Euro per 100 Liters. In addition to the taxes on the beverages (or components thereof), we also notice a regional increase in the adoption of broadly or selectively. Additionally, environmentally focused taxes, including, for example, taxes or other measures, such as plastic packaging tax to encourage companies to increase usage of sustainable packaging options. These tax measures, whatever their scope levies or form, have extended producer responsibility laws, are gaining traction. These measures can adversely impacted, and could continue to impact affect our business and financial performance by increasing the cost of certain of our products, raising product costs, reducing overall consumption of our products, consumption, or leading to generating negative publicity. Finally, Separately, the Organization for Economic Cooperation and Development has released guidance establishing OECD’s Pillar Two initiative establishes a 15% global minimum tax applied on a country-by-country basis for multinational entities under Pillar Two of its Base Erosion and Profit Shifting initiative. entities. As of September 29, 2024, certain 28, 2025, several countries in which where we operate have enacted legislation to adopt implementing the OECD’s Pillar Two effective for fiscal years beginning on or after December 31, 2023, and other countries in which we operate are expected to introduce similar legislation to implement Pillar Two. This global minimum tax will not be effective for the Company until fiscal 2025, and it is initiative. While not expected to result in a material materially impact to our consolidated financial statements. We will results, we continue to monitor regulatory developments with respect to this initiative for potential impacts. The complexity of developments. Overall, the regulatory environment in which we operate and the related costs of compliance are both increasing is growing more complex due to additional or changing evolving laws, market expansion, and jurisdictional conflicts. Due to evolving technologies, such as artificial intelligence technologies, the legal and regulatory requirements, our ongoing expansion into new markets landscape is uncertain and new channels, evolving, and the fact may impose compliance obligations that foreign laws occasionally conflict with domestic laws. In addition to potential damage to could increase our reputation and brand, failure by us costs or our business partners to comply with limit how we may use these technologies. Moreover, the various applicable laws and regulations, as well as changes in laws costs of monitoring and responding to such regulations could have an adverse effect on our operations or the manner in which they are interpreted financial condition. Non-compliance—whether by us or applied, may our partners—can result in litigation, civil and criminal liability, damages, fines and penalties, increased cost of regulatory compliance, fines, reputational harm, and restatements of our financial statements, restatements, all of which could have an adverse impact on may adversely affect our business and financial results.results of operations.

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Prior heading: We have been, and could continue to be, party to litigation or other legal proceedings that could adversely affect our business, results, operations, and reputation.

We have been, are, and in the future may continue to be, subject to litigation and other legal proceedings that may could adversely affect our business. These legal proceedings may involve claims brought by store partners, from employees, customers, government agencies, regulators, suppliers, shareholders, or others through private actions, administrative proceedings, regulatory actions, or other litigation, others, including litigation on a class or collective basis on behalf of what can be a large group of potential claimants. These legal proceedings actions. Allegations have involved, and in the future may involve, allegations of illegal, unfair, or inconsistent included claims related to employment practices, including those governing wage and hour, employment of minors, discrimination, harassment, wrongful termination, and vacation and family leave laws; food-safety issues including food-borne illness, food contamination, safety and adverse health effects from consumption of our food products; product defects, data security or privacy breaches; customer discrimination; privacy, discrimination, personal injury in our stores; marketing and advertising claims, including claims that our environmental and social program claims are misleading or inaccurate; infringement of patent, copyright, or other injury, advertising, intellectual property rights; violation of the federal disputes, securities laws; workers’ compensation; or other concerns. We are party to a number of pending lawsuits and governmental audits alleging violations of federal and state employment laws, including wage and hour claims, and we could be involved in similar or even more significant litigation violations, and legal proceedings in the future. Even if the allegations against us other matters. A judgment significantly in current or future legal matters are unfounded or we ultimately are held not liable, the costs to defend ourselves may be significant, and the litigation may subject us to substantial settlements, fines, penalties, or judgments against us and may divert management’s attention away from operating our business, all excess of which any applicable insurance coverage or third-party indemnity could negatively impact materially adversely affect our financial condition and or results of operations. Even unfounded claims can result in substantial legal costs, management distraction, and potential settlements or penalties. Litigation also may also generate negative publicity, regardless of whether the allegations are valid or we ultimately are not liable, which could damage our reputation and adversely impact our sales as well as our relationships with harming our store partners reputation, customer relationships, and customers. financial performance. See Note 16, 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.

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Prior heading: The unauthorized access, use, theft, or destruction of customer or employee data (personal, financial, or other), 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.

Many of our Our information technology systems (whether cloud-based or hosted in proprietary servers), including and those used for of our point-of-sale, web third-party service providers, business partners, and licensees—including those supporting point-of-sale, mobile platforms, online and mobile payment systems, delivery services, rewards programs, delivery, rewards, and administrative functions, contain functions—store personal, financial, or other information that is entrusted to us by our and confidential data from customers, employees, business partners, and employees. Many of our information technology systems also contain Starbucks proprietary and other confidential information related to our business, such licensees, as business plans and product development initiatives and designs, and confidential information about third parties, such well as licensees and proprietary business partners. Similar to many other retail companies and because of the prominence of our brand, information. Although we have put in the past experienced, place policies, procedures, and we expect to continue technological safeguards designed to experience, cyber-attacks, including phishing, protect the security of this information, we cannot guarantee that this information will not be improperly disclosed or accessed. Like other prominent retail companies, we have experienced cyber-attacks (e.g., phishing) and other attempts to breach, breach or gain unauthorized access to, to our systems and databases. To date, these attacks systems, as have not had a material impact on our operations, but we cannot provide assurance that they will not have an impact in the future. Our third-party providers’ and service providers, business partners’ information technology systems partners, and databases are likewise subject to licensees. We expect such risks. The number and frequency of these attempts varies from year threats to year continue and increases as evolve, especially with the scale and scope of our technology footprint and digital operations increases. In addition, to conduct our business, we provide customer and employee data, as well as Starbucks proprietary information and other confidential information important to our business, to third parties, including licensees and business partners. Individuals performing work for Starbucks rapid evolution and such third parties also may access some of this data, including on personally-owned digital devices. To the extent we, a third party, or such an individual were to experience a breach increased adoption of our or their information technology systems that results in the unauthorized artificial intelligence. Unauthorized access, theft, use, destruction or other compromises destruction of customers’ or employees’ data or confidential information of the Company stored in or transmitted through such systems, including through cyber-attacks any breach, ransomware attack or other incident affecting our systems—whether through external attacks or internal methods, it could methods—could result in a material loss of revenues from the potential adverse impact to our reputation and brand, a decrease in our ability to retain customers or attract new ones, the imposition of potentially significant costs (including loss of data or payment for recovery of data) and liabilities, loss of business, reputational harm, loss of customers, business partners and licensees, and the disruption to our supply chain, business, and plans. Unauthorized access, theft, use, destruction, or other compromises are becoming increasingly sophisticated and may occur through a variety of methods, including attacks using malicious code, vulnerabilities in software, hardware, or other infrastructure disruption, regulatory investigations, litigation (including systems used by our supply chain), system misconfigurations, phishing, deepfakes, ransomware, malware, or social engineering. The rapid evolution class actions), and increased adoption of artificial intelligence technologies significant financial costs. It may intensify our cybersecurity risks. Our logging capabilities, or the logging capabilities of third parties, are not always complete or sufficiently granular, affecting our ability to fully understand the scope of security breaches. Such security breaches also could result in a violation of applicable U.S. and international privacy, cyber, and other laws or trigger data breach notification laws, including new disclosure rules promulgated by the SEC, and subject take considerable time for us to private consumer, business partner or licensee, or securities litigation and governmental investigations investigate and proceedings, any evaluate the full impact of which could result in our exposure to material civil or criminal liability. These risks also exist in acquired businesses, joint ventures, or companies we invest in or partner with that use separate information systems or that have not yet been fully integrated into our information systems. Significant capital investments and other expenditures could also be required to investigate security incidents, remedy cybersecurity problems, recuperate lost data, prevent future compromises, and adapt systems and practices to react particularly for sophisticated attacks. Responding to the changing threat environment. These include costs associated with notifying affected individuals and other agencies, additional security technologies, trainings, cybersecurity incidents may require substantial investments in technology, personnel, experts, legal compliance, and customer support, including notification and credit monitoring services for those whose data has been breached. monitoring. These costs, which could be material, costs could adversely materially impact our financial results of operations in the period in which they are incurred, including by interfering with the pursuit of other important business strategies and initiatives, and may not meaningfully limit the success of future attempts to breach our information technology systems. divert resources from strategic initiatives. Media or other reports of existing actual or perceived security vulnerabilities in our systems, vulnerabilities—whether involving us or those of our third-party business partners or service providers, can also adversely impact business partners, or licensees—can damage our brand and reputation and materially impact our business. Additionally, the techniques and sophistication used to conduct cyber-attacks and compromise information technology systems, as well as the sources and targets of these attacks, change frequently and are often not recognized until such attacks are launched or have been in place for a period of time. The rapid evolution and increased adoption of artificial intelligence technologies by attackers amplifies these concerns. We continue to make significant investments in technology, third-party services, and personnel to develop and implement systems and processes that are designed to anticipate cyber-attacks and to prevent or minimize breaches business, regardless of our information technology systems or data loss, but these security measures cannot provide assurance that we will be successful in preventing such breaches an incident’s scope or data loss.validity.

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Prior heading: Failure to maintain satisfactory compliance with certain privacy and data protection laws and regulations may result in substantial negative financial consequences, reputational harm, and civil or criminal penalties.

Complex We are subject to a complex and rapidly evolving landscape of local, state, national, foreign, and international laws and regulations apply to governing the collection, use, retention, protection, disclosure, transfer, and other processing of personal data. These privacy and data protection laws and regulations are quickly evolving, with new or modified laws frequently amended, reinterpreted, and regulations proposed increasingly enforced, often resulting in heightened compliance obligations, litigation risk, and implemented frequently operational costs. Regulatory scrutiny is intensifying, with agencies such as the Federal Trade Commission and existing state attorneys general applying consumer protection laws and regulations subject to new or different interpretations and increased enforcement and litigation. In addition, our online data practices. The legal landscape remains fluid, with privacy and regulatory obligations are subject data protection laws potentially limiting data use, requiring changes to unexpected changes, including the potential for regulatory or other governmental entities processing practices, exposing us to enact new fines, litigation, or additional laws other penalties, or regulations, impacting our ability to issue rulings that invalidate prior laws or regulations, develop new services. Regulatory changes may include new legislation, invalidation of existing rules, or to increase penalties significantly. Complying with these laws and regulations can be costly and increased penalties, all of which can impede the development impact our ability to develop and offering of offer new products and services. services. For example, Europe’s General Data Protection Regulation (“GDPR”) and the U.K. General Data Protection Regulation (which implements the EU’s GDPR into and the U.K. law), equivalent impose stringent strict data protection requirements and provide for significant penalties for noncompliance. In China, the China’s Personal Information Protection Law (“PIPL”) has established (PIPL) and Data Security Law similarly regulate personal information and non-personal data processing rules, activities and establish data subject rights, rights and obligations for personal information processors, among other things. In addition to the PIPL, China’s Data Security Law regulates data processing activities associated with personal and non-personal data. Noncompliance with these laws may result in significant civil and criminal penalties. liabilities for violations. Other newly enacted and proposed privacy and data protection laws in other jurisdictions served by Starbucks and its licensees may impose similar requirements, are enacting or proposing comparable laws, including restrictions on cross-border data transfers and stringent safeguards on personal and non-personal data. Such laws enhanced data safeguards, which may impact our business operations and increase the cost compliance costs and expense of compliance. affect business operations. In the United States, U.S., the California Consumer Privacy Act (“CCPA”) requires, among (CCPA) and numerous other things, covered companies to provide new disclosures to California consumers state privacy laws impose disclosure obligations and allows such grant consumers to exercise certain rights in connection with over their personal information, data. Some such as the right to opt-out of certain sales of personal information. The CCPA also provides for civil penalties for violations as well as a private right of action for data breaches that may increase data breach litigation. Further, the California Privacy Rights Act, which became effective in January 2023, significantly modified the CCPA to laws include additional compliance obligations. Since the CCPA was first passed, 19 other states have enacted similar data privacy legislation, eight of which are in effect as of the end of 2024. In addition, a number private rights of other states have passed or are considering additional privacy laws, including laws on health data and biometric data that are in effect, or are expected to take effect in the near future. action. These state privacy laws will require us to incur additional costs and expenses ongoing investment in our efforts to comply. compliance infrastructure. Privacy and data protection laws, such as those referenced above, may impact Starbucks operations and new also affect emerging business models, such as Starbucks Digital Solutions, which rely on Starbucks functioning acting as a data controller of customer personal information in licensed markets. As such, In such cases, Starbucks may be primarily responsible bear primary responsibility for compliance with applicable privacy and regulations. The increasing adoption of artificial intelligence technologies has led data protection laws in authorities around the markets served by participating licensees. Our failure world to consider and adopt new and evolving interpretations of privacy and data protection laws, with specific obligations regarding processing of personal data, including required notices, consents, and opt-outs. Claims we have failed to comply with applicable laws privacy and regulations data protection laws or other obligations to which we may be subject relating to adequately safeguard personal data, or to protect personal data from unauthorized access, use, or other processing, could even if unfounded, may result in enforcement actions and regulatory investigations against us, claims for damages by customers and other affected individuals or parties, or fines investigations, enforcement actions, litigation (including class actions), reputational harm, and damage to our brand reputation, financial penalties, any of which could have a material adverse effect on materially affect our operations, financial performance, and business. The amount operations and scope of insurance we maintain may not cover all types of claims that may arise.financial performance.

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Prior heading: 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.

We rely heavily extensively on interconnected information technology systems across to support our operations for numerous purposes, operations, including for administrative functions, point-of-sale processing and payment in our stores and online, management of our supply chain, Starbucks Cards, online business, delivery services, mobile technology (including point-of-sale, mobile payments and ordering apps), reloads and ordering, payments, supply chain management, loyalty functionality, and various other processes and transactions (including providing Starbucks Digital Solutions to participating licensees), programs, and many of these systems are interdependent administrative functions. We also depend on one another third-party providers for their functionality. Many of our non-store employees continue to work on a remote or hybrid basis, key systems and services, which has resulted in increased demand on our information technology infrastructure. Additionally, the success of several of our initiatives to drive growth, including our ability to increase may lack full redundancy within or across markets. Our growth initiatives—particularly those involving digital relationships with our customers to drive incremental traffic engagement and spend, is highly dependent on our technology systems. Furthermore, we continue to expand convenience-led formats, which depend formats—depend heavily on our mobile ordering capabilities. the reliability and performance of these systems. Any failure, inadequacy, inefficiency, or interruption of these systems could harm our ability to effectively operate and grow our business disrupt operations and could adversely affect our financial results. In addition, the technologies and artificial intelligence tools we are incorporating into certain aspects of our operations may not generate the intended efficiencies and may impact our business results. We also rely on third-party providers and platforms for some of these information technology systems and support. Our systems hardware, software, and services provided by third-party service providers are not fully redundant within a market or across our markets. Our contractual and operational safeguards may not be effective in preventing the failure of these systems or platforms services to operate effectively and be available. Such failures may be caused by various factors, including power outages, climate change-related impacts, catastrophic events, physical theft, computer and network failures, inadequate or ineffective redundancy, problems with transitioning Failures—whether due to upgraded or replacement systems or platforms, flaws in third-party outages, cyber-attacks, software or services, errors or improper use by our employees or third-party service providers, or a breach in the security of these systems or platforms, including through cyber-attacks such as those that result in the blockage of our or our third-party business partners’ flaws, misconfigurations, or service providers’ systems and platforms other disruptions—could materially impact product availability, operational efficiency, and those discussed in more detail in this risk factors section. financial performance. If our incident response, disaster recovery, response and business continuity recovery plans do not resolve these issues in an effective and timely manner, they could result in an interruption in our operations and could cause material negative impacts to our product availability and sales, the efficiency of our operations, and our financial results. In addition, are ineffective or delayed, remediation of any problems with our systems and related customer support could result in efforts may incur significant, unplanned expenses. Given the increasing complexity and sophistication of techniques used by bad actors to obtain unauthorized access to or disable information technology systems, and the fact that cyber-attacks are being made by groups and individuals with a wide range of expertise and motives, it is increasingly difficult to anticipate and defend against cyber-attacks, and a cyberattack could occur and persist for an extended period of time before being detected. Moreover, the extent of a particular cyber incident costs. Emerging technologies, including artificial intelligence and the steps that we may need to take to investigate the incident machine learning, may not be immediately clear, and it may take a significant amount of time before such investigation can be finalized and completed deliver expected efficiencies and reliable information about the incident is known. During the pendency of any could introduce new risks, such investigation, we may not know the extent of the harm or how best as those related to remediate it, cybersecurity, data privacy, inaccuracies, hallucinations, bias or discrimination and we intellectual property infringement, which may be required to disclose incidents before their full extent is known.become more pronounced as the Company’s reliance on such technologies increases.

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Prior heading: Failure to adequately protect our intellectual property or ensure that we are not infringing on the intellectual property of others could harm the value of our brand and our business.

Our brand names, trademarks, and related other intellectual property rights are critical assets, and our success depends on our continued ability to use our existing trademarks and service marks in order to increase assets that support brand awareness and further develop our branded products in both product development across domestic and international markets. We rely on protect these assets through a combination of trademarks, copyrights, service marks, trade secrets, patents, and other intellectual property rights to protect our brand and branded products. We rights. While we have registered certain trademarks and have other trademark registrations pending in the U.S. and certain foreign jurisdictions. The trademarks that we currently use have abroad, not been registered in all of the markets outside of the U.S. our trademarks are registered in which every market where we do business operate or may do business operate in the future future, and some may never be registered in all of these markets. It may be costly registered. Securing and time consuming to protect our enforcing intellectual property, particularly property rights—especially in rapidly evolving areas, areas—can be costly and time-consuming. Additionally, the steps laws and enforcement mechanisms we have taken rely on to protect our intellectual property in the U.S. and foreign countries from unauthorized use may not be adequate. In addition, the steps we have taken inadequate. Our competitive position may not adequately ensure that we do not infringe the be adversely affected by our possible inability to effectively protect our intellectual property. We also seek to maintain certain intellectual property as trade secrets. The secrecy of others, such trade secrets and third parties may claim infringement by other sensitive information could be compromised, which could cause us in to lose the future. Any claim competitive advantage resulting from these trade secrets. Additionally, we also face the risk of infringement, whether or not it has merit, could, particularly in rapidly evolving areas, infringing third-party intellectual property rights. Any infringement claims, even unmerited claims, can be time-consuming time consuming and disruptive to our ability to generate revenues or result in costly litigation enter into new market opportunities. Further, such claims may lead to expensive and could have an adverse impact on disruptive litigation or significantly increased costs as a result of our business. In addition, we cannot ensure that attempt to license the intellectual property rights to avoid infringement of third-party rights. Additionally, licensees and other third parties who hold licenses to our intellectual property will not may take actions that adversely affect diminish the value of our intellectual property.property, further exposing us to reputational and financial risk.

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