Starbucks Corp. (NASDAQ:SBUX)

The analysis of the intangible assets and goodwill over the periods reveals several key trends and observations:

Trade Names, Trademarks and Patents (Indefinite-lived intangible assets)

The value of indefinite-lived intangible assets categorized as trade names, trademarks, and patents shows a significant decline from US$203,400 thousand in 2019 to about US$79,500 thousand in 2024. This represents a substantial decrease, mainly occurring between 2019 and 2020, with the value stabilizing at a lower level thereafter.

Acquired and Reacquired Rights

Values for acquired and reacquired rights rose slightly from US$1,075,000 thousand in 2019 to a peak of approximately US$1,141,500 thousand in 2021, before declining to around US$995,500 thousand in 2024. This indicates some volatility but an overall moderate decline after 2021.

Acquired Trade Secrets and Processes

This category remained constant at US$27,600 thousand throughout the entire period, showing no changes or impairments.

Trade Names, Trademarks and Patents (Finite-lived intangible assets)

The finite-lived intangible assets related to trade names, trademarks, and patents experienced growth from US$40,600 thousand in 2019 to a peak of US$131,000 thousand in 2023, with a slight decline to US$130,400 thousand in 2024. This indicates a significant increase over the period, reflecting investment or acquisition activities.

Licensing Agreements

Licensing agreements showed fluctuations with values ranging from US$16,200 thousand in 2019, peaking at US$19,300 thousand in 2022, followed by a decline to US$13,400 thousand in 2024, indicating some variability and a downward pressure in recent years.

Other Finite-lived Intangible Assets

Other finite-lived intangible assets increased moderately from US$22,000 thousand in 2019 to US$24,000 thousand in 2021, then declined to US$20,900 thousand by 2024. The changes suggest mild fluctuations and a slight downward trend in the later periods.

Finite-lived Intangible Assets, Gross Carrying Amount

The gross carrying amount of finite-lived intangible assets rose from US$1,181,400 thousand in 2019 to US$1,338,200 thousand in 2021, then decreased to US$1,187,800 thousand in 2024. This pattern reveals initial growth followed by a reduction toward the end of the timeframe.

Accumulated Amortization

Accumulated amortization increased significantly (in absolute terms) from -US$603,000 thousand in 2019 to -US$1,166,400 thousand in 2024, indicating ongoing amortization of finite-lived intangible assets.

Finite-lived Intangible Assets, Net Carrying Amount

The net carrying amount of finite-lived intangible assets fell sharply from US$578,400 thousand in 2019 to US$21,400 thousand in 2024, demonstrating significant amortization and possibly asset disposals or impairments over the period.

Other Intangible Assets

Other intangible assets continuously declined from US$781,800 thousand in 2019 to US$100,900 thousand in 2024, showing a consistent downward trend likely due to amortization and attrition.

Goodwill

Goodwill increased gradually from US$3,490,800 thousand in 2019 to a peak of US$3,677,300 thousand in 2021, followed by a decline to US$3,315,700 thousand in 2024. This suggests some impairment or write-downs after 2021, but overall goodwill remains at a high level.

Other Intangible Assets and Goodwill

The combined value of other intangible assets and goodwill decreased from US$4,272,600 thousand in 2019 to US$3,416,600 thousand in 2024, reflecting the net effect of declines in intangible assets and goodwill impairments or disposals.

The financial data reveals several key trends over the six-year period from September 2019 to September 2024. Both reported and goodwill-adjusted total assets show substantial growth from 2019 through 2021, followed by a decline in 2022 and a recovery in subsequent years.

Total Assets

Reported total assets increased sharply from approximately 19.2 billion USD in 2019 to nearly 31.4 billion USD in 2021, marking strong asset expansion. However, in 2022, total assets declined to about 28.0 billion USD before rising again to over 31.3 billion USD by 2024. The adjusted total assets, which remove goodwill components, follow a similar pattern but at consistently lower levels, indicating that a significant portion of the reported assets comprise goodwill. Adjusted assets rose from roughly 15.7 billion USD in 2019 to 27.7 billion USD in 2021, declined to 24.7 billion USD in 2022, and increased to 28.0 billion USD by 2024.

Shareholders’ Deficit

There is a persistent shareholders’ deficit throughout the period, with both reported and adjusted figures remaining negative. The reported shareholders’ deficit worsened from -6.2 billion USD in 2019 to -7.8 billion USD in 2020, improved somewhat in 2021 to -5.3 billion USD, then deteriorated again to -8.7 billion USD in 2022. In 2023 and 2024, the deficit lessened but remained substantial at approximately -7.9 billion USD and -7.4 billion USD respectively. Adjusted shareholders’ deficit figures are more negative than reported, indicating that goodwill adjustments increase the deficit magnitude. The adjusted deficit reached its peak negativity in 2022 at nearly -12.0 billion USD, then slightly improved to about -10.8 billion USD in 2024.

Net Earnings Attributable

Reported and adjusted net earnings attributable to Starbucks exhibit volatility. Earnings dropped sharply from approximately 3.6 billion USD in 2019 to under 1.0 billion USD in 2020, likely indicating a challenging operational environment. Subsequently, earnings rebounded strongly to over 4.1 billion USD in 2021 before declining to around 3.3 billion USD in 2022. The earnings recovered again in 2023 to about 4.1 billion USD but showed a slight decrease to 3.8 billion USD in 2024. The adjusted net earnings closely mirror the reported earnings, suggesting that goodwill adjustments have a minimal impact on income figures.

Overall, the company’s asset base has grown substantially over the five-year horizon despite some contraction in 2022. The consistent negative shareholders’ equity, exacerbated when adjusted for goodwill, indicates ongoing balance sheet challenges. Earnings performance has been uneven, with a significant downturn in 2020 followed by recovery and moderate fluctuations thereafter. These patterns suggest exposure to external shocks during 2020, followed by operational recovery and ongoing volatility in profitability.

The data reveals several notable trends in profitability, asset efficiency, and returns for the company over the six-year period from 2019 to 2024.

Net Profit Margin

Both reported and adjusted net profit margins exhibit similar trends, indicating consistent recognition of goodwill adjustments relative to net profitability. The margin significantly decreased from 13.58% in 2019 to a low of 3.95% in 2020, likely reflecting adverse conditions during that period. It then rebounded strongly to 14.45% in 2021, before gradually declining to 10.4% by 2024. This pattern suggests volatility in profitability with a recovery phase followed by stabilization at a somewhat lower margin compared to early years.

Total Asset Turnover

Reported total asset turnover dropped markedly from 1.38 in 2019 to 0.8 in 2020, echoing the downturn seen in profit margins. It then increased steadily to 1.22 in 2023 before slightly falling to 1.15 in 2024. Adjusted asset turnover values are consistently higher than reported figures, indicating that goodwill adjustments reduce asset base and consequently enhance turnover ratios. Adjusted turnover also traces a recovery and growth trend from 1.69 in 2019 to 1.37 in 2023, with a slight decline to 1.29 in 2024, mirroring the reported pattern but at elevated levels.

Return on Assets (ROA)

Both reported and adjusted ROA show a sharp decline in 2020, dropping from 18.73% to 3.16% reported and from 22.95% to 3.6% adjusted. A recovery occurs over subsequent years, reaching 14.01% reported and 15.73% adjusted by 2023. In 2024, there is a slight decrease to 12% reported and 13.42% adjusted. The adjusted ROA is consistently higher than the reported figures, consistent with the effect of goodwill deductions enhancing the asset base’s efficiency metric.

Financial Leverage and Return on Equity (ROE)

Data for financial leverage and ROE, both reported and adjusted, are not provided, limiting the ability to analyze the company's capital structure or equity returns over this period.

Overall Insights

The period covered captures substantial volatility likely linked to external challenges, including a significant downturn in 2020 across profit margins, asset turnover, and ROA. Subsequent years demonstrate recovery and operational improvements, though margins and returns do not fully regain early period levels by 2024. Adjusted metrics that account for goodwill present a consistently stronger performance picture, reflecting the impact of goodwill on asset values and efficiency ratios. The absence of leverage and ROE data limits comprehensive assessment of financial structure and shareholder returns.

Net Earnings Attributable to Starbucks

The reported net earnings showed a significant decline from 3,599,200 thousand USD in 2019 to 928,300 thousand USD in 2020, reflecting a substantial drop likely influenced by adverse external factors during that period. However, there was a strong recovery in 2021, with net earnings reaching 4,199,300 thousand USD, the highest observed in the period analyzed. Following this peak, earnings decreased to 3,281,600 thousand USD in 2022 but rebounded to 4,124,500 thousand USD in 2023. In 2024, there was a slight reduction again to 3,760,900 thousand USD. The adjusted net earnings mirrored the reported net earnings exactly across all years, indicating that adjustments for goodwill did not materially affect the net profit figures.

Net Profit Margins

The reported net profit margin followed a similar pattern to net earnings. It declined sharply from 13.58% in 2019 to 3.95% in 2020, which marks a strong contraction in profitability during that year. A notable improvement occurred in 2021 with the margin reaching 14.45%, the highest within the period. Subsequently, margins decreased to 10.18% in 2022 but improved again to 11.46% in 2023. A slight decrease to 10.4% was recorded in 2024. The adjusted net profit margins were identical to the reported margins, confirming no impact from goodwill adjustments on margin calculations.

Overall Trends and Insights

The data reveals a pronounced volatility in both net earnings and net profit margins over the six-year period. The sharp declines in 2020 suggest significant disruption, followed by a rapid recovery in 2021. Post-2021, while earnings and margins did not reach the peak levels again consistently, the figures stabilized at a relatively high level compared to 2020, indicating resilience and adaptive capacity. The absence of differences between reported and adjusted figures suggests that goodwill-related accounting elements did not materially influence reported profitability during these years.

The analysis of the financial data reveals several key trends in the company’s asset base and operational efficiency over the time periods examined.

Total assets (reported)

The reported total assets showed a significant increase from 19.22 billion US dollars in 2019 to a peak of approximately 31.39 billion US dollars in 2021. However, this was followed by a decline to around 27.98 billion US dollars in 2022, before gradually rising again to approximately 31.34 billion US dollars by 2024. This pattern indicates periods of considerable asset growth followed by some contraction and recovery.

Total assets (adjusted for goodwill)

The adjusted total assets, which exclude the impact of goodwill, exhibit a similar trend to the reported total assets but at consistently lower levels. The adjusted assets increased from about 15.73 billion US dollars in 2019 to 27.72 billion US dollars in 2021, then decreased to 24.69 billion US dollars in 2022, and subsequently recovered to around 28.02 billion US dollars in 2024. The adjustment indicates that goodwill represents a substantial portion of the total reported assets but does not alter the overall trend analysis.

Total asset turnover (reported)

The reported total asset turnover ratio, representing how effectively the firm utilizes its assets to generate revenue, declined sharply from 1.38 in 2019 to 0.80 in 2020. Thereafter, it showed a gradual improvement, increasing to 0.93 in 2021, 1.15 in 2022, and peaking at 1.22 in 2023 before a slight decrease to 1.15 in 2024. This suggests a temporary decline in asset efficiency during 2020, possibly due to external market conditions, followed by a recovery period.

Total asset turnover (adjusted for goodwill)

The adjusted total asset turnover follows a similar but generally higher trajectory, beginning at 1.69 in 2019 and dropping to 0.91 in 2020. It improved continuously thereafter, reaching 1.05 in 2021, 1.31 in 2022, and peaking at 1.37 in 2023 before settling at 1.29 in 2024. The higher adjusted turnover ratios indicate that excluding goodwill assets provides a clearer view of operational efficiency, showing a stronger recovery post-2020 downturn.

Overall, the data indicate that the company experienced significant asset growth through 2021, a contraction in 2022, and recovery thereafter. The impact of goodwill is notable in asset valuations. Operational efficiency, as measured by asset turnover, declined sharply in 2020 but demonstrated a consistent recovery trend over subsequent years when evaluated both on a reported and adjusted basis.

The financial data over the reported periods indicates considerable fluctuations in both assets and shareholders' deficit. The reported total assets show a general upward trend from 19,219,600 thousand US dollars in 2019 to 31,339,300 thousand US dollars in 2024, though there is a noticeable decline in 2022 before assets rise again in the subsequent years. Adjusted total assets, which likely exclude certain intangible assets such as goodwill, follow a similar pattern but present lower absolute values, indicating the presence of significant intangible assets included in the reported figures.

Regarding shareholders’ deficit, the reported figures reveal an overall negative balance throughout the periods, with values consistently below zero. The deficit deepened notably in 2020 and 2022, reaching a peak negative position of -8,706,600 thousand US dollars in 2022. Although it showed some improvement in 2023 and 2024, the figures remain substantially negative, suggesting ongoing financial challenges or large accumulated losses. Adjusted shareholders’ deficit values are even more negative than the reported figures, with the deficit worsening in 2020 and 2022 and showing a slightly improved but still negative trend thereafter.

Financial leverage ratios, both reported and adjusted, are not provided, which limits a direct analysis of leverage trends. However, the relationship between total assets and shareholders’ deficit implies that the company may be employing high leverage or experiencing significant goodwill impairments affecting its equity position. The widening gap between reported and adjusted figures underscores the relevance of intangible assets, which materially affect the company’s balance sheet presentation and solvency metrics.

Overall, the data suggests a company with growing asset base but persistent and significant shareholders’ deficit, reflecting underlying financial difficulties or accounting provisions. The adjustments for goodwill and other intangibles significantly impact equity and asset measures, which is critical for evaluating the true financial health and leverage position.

The reported net earnings attributable to Starbucks exhibit considerable fluctuations over the analyzed periods. Starting at approximately 3.6 billion USD in late 2019, there is a steep decline to about 928 million USD in 2020, likely reflecting broader economic or industry-specific challenges during that year. Following this decline, net earnings rebounded strongly to over 4.1 billion USD in 2021. The subsequent years show some volatility with earnings decreasing to around 3.28 billion USD in 2022, rising again to 4.12 billion USD in 2023, and then slightly declining to 3.76 billion USD in 2024. The adjusted net earnings figures mirror the same pattern precisely, indicating that goodwill adjustments did not materially affect the earnings reported across these years.

The shareholders’ deficit, both reported and adjusted for goodwill, displays a persistent negative balance throughout the period, signifying that the company’s liabilities continue to exceed its assets on the balance sheet. The reported shareholders’ deficit worsens from approximately -6.23 billion USD in late 2019 to a nadir of about -8.7 billion USD in 2022, followed by some recovery but remaining deeply negative at -7.45 billion USD in 2024. The adjusted shareholders’ deficit, which accounts for goodwill, consistently shows a more pronounced deficit by several billions, starting at roughly -9.72 billion USD in 2019 and deepening to about -11.99 billion USD in 2022. Similar to the reported deficit, there is a slight improvement thereafter, though the deficit remains substantial at approximately -10.76 billion USD in 2024.

The absence of data for both reported and adjusted Return on Equity (ROE) percentages limits the ability to directly assess profitability relative to shareholders’ equity over time. However, given the persistent and significant negative shareholders’ equity, as demonstrated by the deficits reported, it is plausible that ROE metrics would be adversely affected, reflecting the challenges in generating returns with a negative equity base.

Overall, the data reveals volatility in net earnings with a sharp decline in 2020, followed by recovery and fluctuations thereafter. The continuing and significant negative shareholders’ equity suggests potential structural financial challenges, which persist even after goodwill adjustments. This financial profile underscores the importance of monitoring both profitability and balance sheet strength to fully understand the company's financial health and sustainability.

Net Earnings Trend

The reported net earnings attributable to the company show significant volatility over the six-year period. Starting at approximately 3.6 billion USD in 2019, earnings sharply declined to around 928 million USD in 2020. This decline is likely influenced by external factors impacting that fiscal year. In 2021, net earnings recovered strongly to approximately 4.2 billion USD, followed by a decrease to roughly 3.3 billion USD in 2022. The earnings then increased again to about 4.1 billion USD in 2023 before moderating to 3.76 billion USD in 2024. The adjusted net earnings follow the exact same pattern, indicating no material adjustments affecting net earnings other than those reported.

Total Assets Trend

Reported total assets exhibit a general upward trend, increasing from approximately 19.2 billion USD in 2019 to 31.3 billion USD in 2024. There was a notable jump between 2019 and 2020, rising to nearly 29.4 billion USD, followed by a steady but moderated increase over the subsequent years. Adjusted total assets, which exclude certain goodwill impacts, follow a similar but consistently lower track, increasing from 15.7 billion USD in 2019 to 28.0 billion USD in 2024. The gap between reported and adjusted assets suggests a sizeable portion of total assets is attributable to goodwill or intangible assets.

Return on Assets (ROA) Analysis

The company's reported ROA reflects fluctuating profitability relative to its asset base. It starts at 18.73% in 2019 before plunging to 3.16% in 2020, indicating a period of reduced efficiency in asset utilization. The ROA recovers to 13.38% in 2021, followed by a slight decline to 11.73% in 2022. The upward movement resumes in 2023 with ROA at 14.01%, then a decrease to 12.0% in 2024. The adjusted ROA, which factors out goodwill and provides a clearer view of operational performance, is consistently higher than reported ROA each year—from 22.95% in 2019 down to 13.42% in 2024—showing a similar trend of initial decline in 2020 followed by recovery and moderate fluctuation in subsequent years.

Overall Insights

The financial data indicates that the company experienced a sharp earnings decline in 2020, likely due to extraordinary conditions impacting operations. Despite this, there is a demonstrated recovery trend in net earnings and ROA over the following years, though earnings and profitability fluctuate and do not fully return to pre-2020 peak levels by 2024. Asset growth is steady, with the continuous presence of intangible assets impacting total asset values and return calculations. Adjusted figures highlight underlying operational returns that are stronger than those suggested by reported metrics, indicating goodwill and intangible assets diluted reported profitability ratios.