DOCUMENTS INCORPORATED BY REFERENCE

Table of Contents

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-K

? ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended September 29, 2019

or

? TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

to

Commission File Number: 0-20322

.

Starbucks Corporation

(Exact Name of Registrant as Specified in its Charter)

Washington

91-1325671

(State of Incorporation)

(IRS Employer ID)

2401 Utah Avenue South, Seattle, Washington 98134

(206) 447-1575

(Address of principal executive office, zip code, telephone number)

Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol

Name of Each Exchange on Which Registered

Common Stock, $0.001 par value per share

SBUX

Nasdaq Global Select Market

Securities Registered Pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes x No ¡§

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¡§ No x

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the

preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the

past 90 days. Yes x No ¡§

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of

Regulation S-T (¡ì 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such

files). Yes x No ¡§

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging

growth company. See the definitions of ¡°large accelerated filer,¡± ¡°accelerated filer,¡± ¡°smaller reporting company¡± and ¡°emerging growth company¡± in Rule 12b-2

of the Exchange Act.

Large accelerated filer

x

Emerging growth company

?

Accelerated filer

¡§

Non-accelerated filer

¡§

Smaller reporting company

?

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or

revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¡§

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes ? No x

The aggregate market value of the voting stock held by non-affiliates of the registrant as of the last business day of the registrant¡¯s most recently completed second

fiscal quarter, based upon the closing sale price of the registrant¡¯s common stock on March 31, 2019 as reported on the NASDAQ Global Select Market was $89.8

billion. As of November 8, 2019, there were 1,181.0 million shares of the registrant¡¯s Common Stock outstanding.

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DOCUMENTS INCORPORATED BY REFERENCE

Portions of the definitive Proxy Statement for the registrant¡¯s Annual Meeting of Shareholders to be held on March 18, 2020 have been incorporated by reference

into Part III of this Annual Report on Form 10-K.

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STARBUCKS CORPORATION

Form 10-K

For the Fiscal Year Ended September 29, 2019

TABLE OF CONTENTS

PART I

Item 1

Business

2

Item 1A

Risk Factors

Item 1B

Unresolved Staff Comments

17

Item 2

Properties

17

Item 3

Legal Proceedings

17

Item 4

Mine Safety Disclosures

17

Item 5

Market for the Registrant¡¯s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities

18

Item 6

Selected Financial Data

20

Item 7

Management¡¯s Discussion and Analysis of Financial Condition and Results of Operations

23

Item 7A

Quantitative and Qualitative Disclosures About Market Risk

43

Item 8

Financial Statements and Supplementary Data

44

Index for Notes to Consolidated Financial Statements

49

Report of Independent Registered Public Accounting Firm

84

Item 9

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

86

Item 9A

Controls and Procedures

86

Item 9B

Other Information

88

Item 10

Directors, Executive Officers and Corporate Governance

89

Item 11

Executive Compensation

89

Item 12

Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters

89

Item 13

Certain Relationships and Related Transactions, and Director Independence

89

Item 14

Principal Accounting Fees and Services

89

9

PART II

PART III

PART IV

Item 15

SIGNATURES

Exhibits, Financial Statement Schedules

90

97

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K includes ¡°forward-looking¡± statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forwardlooking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as ¡°believes,¡± ¡°expects,¡±

¡°anticipates,¡± ¡°estimates,¡± ¡°intends,¡± ¡°plans,¡± ¡°seeks¡± or words of similar meaning, or future or conditional verbs, such as ¡°will,¡± ¡°should,¡± ¡°could,¡± ¡°may,¡±

¡°aims,¡± ¡°intends,¡± or ¡°projects.¡± A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances, and those future events or

circumstances may not occur. You should not place undue reliance on forward-looking statements, which speak only as of the date of this Annual Report on Form

10-K. These forward-looking statements are all based on currently available operating, financial and competitive information and are subject to various risks and

uncertainties. Our actual future results and trends may differ materially depending on a variety of factors, including, but not limited to, the risks and uncertainties

discussed under ¡°Risk Factors¡± and ¡°Management¡¯s Discussion and Analysis of Financial Condition and Results of Operations.¡± Given these risks and

uncertainties, you should not rely on forward-looking statements as a prediction of actual results. Any or all of the forward-looking statements contained in this

Annual Report on Form 10-K and any other public statement made by us, including by our management, may turn out to be incorrect. We are including this

cautionary note to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for forward-looking

statements. We expressly disclaim any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or

otherwise.

1

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PART I

Item 1. Business

General

Starbucks is the premier roaster, marketer and retailer of specialty coffee in the world, operating in 81 markets. Formed in 1985, Starbucks Corporation¡¯s common

stock trades on the NASDAQ Global Select Market (¡°NASDAQ¡±) under the symbol ¡°SBUX.¡± We purchase and roast high-quality coffees that we sell, along with

handcrafted coffee, tea and other beverages and a variety of high-quality food items through company-operated stores. We also sell a variety of coffee and tea

products and license our trademarks through other channels such as licensed stores, as well as grocery and foodservice through our Global Coffee Alliance with

Nestl¨¦ S. A. ("Nestl¨¦"). In addition to our flagship Starbucks Coffee brand, we sell goods and services under the following brands: Teavana, Seattle¡¯s Best Coffee,

Evolution Fresh, Ethos, Starbucks Reserve and Princi.

Our objective is to maintain Starbucks standing as one of the most recognized and respected brands in the world. To achieve this, we are continuing the disciplined

expansion of our global store base, adding stores in both existing, developed markets such as the U.S., and in newer, higher growth markets such as China, as well

as optimizing the mix of company-operated and licensed stores around the world. In addition, by leveraging the experience gained through our traditional store

model, we continue to offer consumers new coffee and other products in a variety of forms, across new categories, diverse channels and alternative store formats.

We also believe our Starbucks Global Social Impact strategy, commitments related to ethically sourcing high-quality coffee, contributing positively to the

communities we do business in and being an employer of choice are contributors to our objective.

In this Annual Report on Form 10-K (¡°10-K¡± or ¡°Report¡±) for the fiscal year ended September 29, 2019 (¡°fiscal 2019¡±), Starbucks Corporation (together with its

subsidiaries) is referred to as ¡°Starbucks,¡± the ¡°Company,¡± ¡°we,¡± ¡°us¡± or ¡°our.¡±

Segment Financial Information

Segment information is prepared on the same basis that our management reviews financial information for operational decision-making purposes. In the fourth

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

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

Concurrently, results of Siren Retail, a non-reportable operating segment consisting of Starbucks ReserveTM Roastery & Tasting Rooms, certain stores under the

Starbucks Reserve brand and Princi operations, which were previously included within Corporate and Other, are now reported within the Americas and

International segments based on the geographical location of the operations.

We have three reportable operating segments: 1) Americas, which is inclusive of the U.S., Canada, and Latin America; 2) International, which is inclusive of

China, Japan, Asia Pacific, Europe, Middle East, and Africa; and 3) Channel Development. Non-reportable operating segments such as Evolution Fresh and

unallocated corporate expenses are reported within Corporate and Other. Revenues from our reportable operating segments as a percentage of total net revenues for

fiscal 2019 were as follows: Americas (69%), International (23%) and Channel Development (8%).

Our Americas and International segments include both company-operated and licensed stores. Our Americas segment is our most mature business and has achieved

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

models. Therefore, they may require a more extensive support organization, relative to their current levels of revenue and operating income, than our Americas

operations.

Our Channel Development segment includes roasted whole bean and ground coffees, Seattle's Best Coffee?, Starbucks- and Teavana-branded single-serve

products, a variety of ready-to-drink beverages, such as Frappuccino?, Starbucks Doubleshot?, Starbucks Refreshers? beverages and TeavanaTM/MC iced tea, and

other branded products sold worldwide outside of our company-operated and licensed stores. Historically our consumer packaged goods ("CPG") have been sold

directly to grocery, warehouse club and specialty retail stores and through institutional foodservice companies. With the establishment of the Global Coffee

Alliance with Nestl¨¦, a large portion of our Channel Development business transitioned to a licensed model in the fourth quarter of fiscal 2018. Our collaborative

relationships with PepsiCo, Inc., Anheuser-Busch InBev, Tingyi Holding Corp., Arla Foods and others for our global ready-to-drink beverage businesses in this

segment are excluded from the Global Coffee Alliance.

2

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