Non-GAAP measure. FY18 GAAP EPS was $3.24 per share. A ...

Dear Shareholders,

Starbucks was founded in 1971 and over the past five decades has built one of the world's most admired and trusted brands around a mission that celebrates the joy of human connection and the romance of all things coffee.

It is a privilege to share with you some of the extraordinary events and milestones that have shaped this past year for Starbucks Coffee Company. I believe in the power of a team, and it is an honor to work with Starbucks world-class leadership team. Together, we understand our responsibility to lead our company into the future by remaining true to our mission to inspire and nurture the human spirit, while at the same time reimagining the future of Starbucks. We are now writing our next chapter of growth and value creation for Starbucks partners, customers and our shareholders. And we continue to build the company by further elevating the Starbucks Experience, showing our love for all things coffee, and remaining true in our constant pursuit of doing good.

It's amazing to consider that each week we serve 100 million customer occasions in nearly 30,000 stores around the world. And at the center of creating that warm and welcoming Starbucks experience is a diverse group of more than 350,000 partners who proudly wear the green apron.

Growing at scale

Over the past two years, we have set the foundation for our next chapter of growth. In fiscal year 2018, we surpassed 29,000 stores in 78 markets around the world. We reached a record net revenue in fiscal year 2018 of $24.7 billion, up 10 percent over the prior year, and grew non-GAAP EPS1 by 17 percent to $2.42 per share. We were pleased with the trajectory of the business as we closed fiscal year 2018, reaffirming our plans for sustainable growth while challenging the status quo, elevating the customer experience, investing in and empowering our partners, operating with discipline and adapting with agility.

As we look ahead to the future, we have a plan to not only generate long-term growth and shareholder value for the company, but to continue to build a brand that creates an emotional connection with our partners and customers. We streamlined the business around several initiatives: global retail market alignment, business simplification, the execution of our Global Coffee Alliance with Nestl?, and an increased velocity of innovation.

This approach has helped us gain operating leverage to drive progress against our three strategic priorities: 1) accelerate growth in the United States and China, 2) expand the global reach of the Starbucks brand by leveraging our Global Coffee Alliance with Nestl?, and 3) increase returns to shareholders.

1 Non-GAAP measure. FY18 GAAP EPS was $3.24 per share. A reconciliation of non-GAAP EPS with GAAP EPS is available at the end of this letter.

Having a clear strategic plan allows us to stay focused on our customers and our partners and elevating the role of the third place, providing both a sense of community and the ease of convenience for busy lives in the digital age. We are driving growth at scale in ways that also enhance the cultural relevancy and heritage of our brand. Our teams are focused on the customer experience in our stores, new beverages that delight our customers, and extending our digital reach and relevance with customers around the globe.

We have embraced opportunities to amplify the Starbucks brand around the world. Following our first Reserve Roastery in Seattle, we have now opened Starbucks Reserve Roasteries in Shanghai, Milan and New York. Customers are still lining up around the block to become immersed in the ultimate coffee and roasting experience. Further, our alliance with Nestl? is helping us bring Starbucks into grocery aisles in new markets around the world. Through this partnership, Nestl? will bring Starbucks to a potential reach of 5 million points in 190 countries through its Nespresso and Dolce Gusto single-serve platforms.

Building A Different Kind of Company

As ceo there are many things I have learned to be true about the importance of Starbucks heritage and commitment to the third place and the communities we serve. Our continued growth requires that we stay true to the foundation of the brand promise that built this great company. Everything we do must be in service of our partners and the customer experience we ask them to create each day in our stores. Customers choose Starbucks, and we must continue to earn each visit.

Our partners choose Starbucks because they believe in our mission, because we live our values, and because we work together to create opportunity and fulfill aspirations. On average, our retail partners stay with us longer than anyone else. We provide meaningful benefits for full-time but also part-time workers, ranging from the opportunity to earn a four-year college degree through Arizona State University in the United States, to offering a critical illness insurance program for the parents of Starbucks partners in China.

We are on a journey to support and better understand one another, and to become better listeners, learners and leaders. This year, we reached 100 percent gender and racial pay equity for U.S. partners performing similar work and committed to achieving pay equity for our partners in company-operated markets globally. And, we again distributed Bean Stock to almost 200,000 partners in 21 markets around the world and applaud the more than 12,000 Starbucks partners working toward a college degree through the Starbucks College Achievement Program.

Our quest to serve the world's most sustainable coffee begins with our commitment to support coffee farmers, their communities and the communities in which we sell their coffee. We have shown this commitment by: donating 30 million disease-resistant coffee trees that are creating harvests that are sustaining families and coffee around the world; planned investment of $50 million in the Starbucks Global Farmer Fund; and building an infrastructure to donate 100 percent of our unsold food, where possible, in our 8,000 company owned U.S. stores. This year we also committed to eliminating single-use plastic straws from our more than 28,000 company operated and licensed stores by 2020 and to operating 10,000 "Greener Stores" by 2025. In our hometown of Seattle, we partnered with Mary's

Place and the community of Seattle to raise more than $2 million to help 900 families with children find permanent housing as part of the local "No Child Sleeps Outside" campaign.

I am so proud of the year we have had together. Our leadership team is focused on honoring our heritage while reimagining our future. At the same time, we remain committed to executing with discipline while returning $25 billion of cash to shareholders through fiscal year 2020. As I reflect on the past 10 years of my Starbucks journey, and the past two years as chief executive officer, every day is a privilege to serve you and Starbucks partners around the world. Together we share a passion to be a part of something bigger ? to be a different kind of company ? one that believes the pursuit of profit is not in conflict with the pursuit of doing good.

With great respect,

Kevin

Forward-Looking Statements

Certain statements contained herein are "forward-looking statements" within the meaning of the applicable securities laws and regulations. Generally, these statements can be identified by the use of words such as "anticipate," "expect," "believe," "could," "estimate," "feel," "forecast," "intend," "may," "plan," "potential," "project," "should," "will," "would," and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These statements are based upon information available to Starbucks as of the date hereof, and Starbucks actual results or performance could differ materially from those stated or implied due to risks and uncertainties associated with its business. These risks and uncertainties include, but are not limited to, the risks detailed in the company filings with the Securities and Exchange Commission, including the "Risk Factors" section of Starbucks Annual Report on Form 10-K for the fiscal year ended September 30, 2018. We assume no obligation to update any of these forward-looking statements.

STARBUCKS CORPORATION RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES

Consolidated

Year Ended Sep 30,

2018

Oct 1, 2017

Change

Diluted net earnings per share (GAAP) East China acquisition gain Sale of Taiwan joint venture operations Sale of Tazo brand Restructuring, impairment and optimization costs (1) CAP transaction and integration-related items (2) Sale of Brazil retail operations Sale of Singapore retail operations Sale of Germany retail operations The Starbucks Foundation donation 2018 U.S. stock award (3) Nestl? transaction related costs Other tax matters (4) Income tax effect on Non-GAAP adjustments (5)

$

3.24 $

1.97

64.5%

(0.99)

--

(0.11)

--

(0.25)

--

0.17

0.11

0.16

0.04

0.01

--

--

(0.06)

--

(0.01)

--

0.03

0.03

--

0.04

--

0.13

--

(0.02)

(0.04)

Non-GAAP net earnings per share

$

2.42 $

2.06

17%

(1) Represents restructuring, impairment and business optimization costs and inventory write-offs

related to these efforts recorded within cost of sales including occupancy costs.

(2) Includes transaction costs for the acquisition of our East China joint venture and the divestiture of

our Taiwan joint venture; ongoing amortization expense of acquired intangible assets associated

with the acquisition of our East China joint venture and Starbucks Japan; and the related post-

acquisition integration costs, such as incremental information technology and compensation-related

costs.

(3) Represents incremental stock-based compensation award for U.S. partners (employees).

(4) Represents the estimated impact of the U.S. Tax Cuts and Jobs Act, specifically the transition tax on

undistributed foreign earnings and re-measurement of deferred taxes. (5) Income tax effect on non-GAAP adjustments was determined based on the nature of the underlying

items and their relevant jurisdictional tax rates.

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