Starbucks Corp. (NASDAQ:SBUX)

Current Taxes

The current tax expense exhibited significant volatility over the analyzed periods. Initially, there was a sharp decline from approximately $2.32 billion in 2019 to $268.2 million in 2020. Afterwards, the figure recovered notably, rising to $1.28 billion in 2021. Following this rebound, current taxes demonstrated a downward trend in 2022, decreasing to $925.4 million, before increasing again to $1.34 billion in 2023. Most recently, in 2024, current tax expenses declined slightly to approximately $1.22 billion. This pattern suggests fluctuations in taxable income or variations in tax rates and tax planning strategies during these years.

Deferred Taxes

Deferred tax expenses displayed less volatility but revealed notable fluctuations in sign and magnitude. In 2019, there was a significant deferred tax benefit of about $1.45 billion (negative value). This benefit sharply decreased to $28.5 million in 2020 and remained relatively small and negative in 2021 at $125 million. Interestingly, in 2022, deferred taxes shifted to a small expense position of $23.1 million (positive), indicating changes in temporary differences or tax timing adjustments. Subsequently, this reverted to deferred tax benefits in 2023 and 2024, though at reduced levels of $59.3 million and $13.6 million, respectively. Overall, deferred taxes have contributed to smoothing the total tax expense but have lessened in impact after 2019.

Total Income Tax Expense

The total income tax expense, combining current and deferred taxes, varied alongside these components. A notable decline occurred from $871.6 million in 2019 to $239.7 million in 2020, driven primarily by the decrease in current taxes and the reduced deferred tax benefit. A strong recovery in 2021 brought the expense back up to $1.16 billion, while 2022 saw a modest decline to $948.5 million. The tax expense peaked again in 2023 at $1.28 billion, before marginally declining to $1.21 billion in 2024. These fluctuations indicate changes in taxable income, tax positions, or other external factors affecting tax liabilities over the years.

The analysis of the income tax-related percentages over the six-year period reveals several notable trends and shifts in tax burden components.

Statutory U.S. Federal Income Tax Rate

This rate remained constant at 21% throughout the period, indicating no changes in the federal statutory tax rate affecting the company.

State Income Taxes, Net of Federal Tax Benefit

There was a gradual increase in the state income tax rate component, rising from 2.1% in 2019 to a peak of 3.4% in 2023 before slightly decreasing to 3.3% in 2024. This suggests a growing impact of state taxes on the overall tax expense, partially offset in 2024.

Foreign Rate Differential

The foreign rate differential showed significant variability. Starting near neutral at -0.1% in 2019, it dropped sharply to -3.2% in 2020, implying a lower foreign tax burden or benefit that year. Subsequently, it returned close to zero with small positive values from 2021 to 2024, indicating relatively stable foreign tax impacts in recent years.

Change in Tax Rates

Reported changes in tax rates occurred only in 2020 and 2021 with respective decreases of 2.2% and 1.3%. These reductions reflect tax law modifications during those years that favorably affected the tax liabilities. No changes were recorded in subsequent years.

Residual Tax on Foreign Earnings

This component appeared solely in 2019 at 1.7%, indicating a notable one-time residual tax on foreign earnings that did not recur in later years.

Tax Impacts Related to Sale of Certain Operations

This one-time tax impact was recorded only in 2019 at -1.3%, suggesting a tax benefit realized from the sale of operations, with no similar impacts in following years.

Other, Net

This fluctuated over the years with a significant negative impact of -3.9% in 2019, moving to a positive 2.8% in 2020, then returning to negative values trending toward zero by 2024 (-0.3%). This variation indicates the presence of various other tax effects, including timing differences or tax credits, that influenced tax expense inconsistently across periods.

Effective Income Tax Rate

The effective income tax rate exhibited a clear upward trend from 19.5% in 2019 to 24.3% in 2024. This steady increase reflects an overall rising tax burden, driven by increased state taxes and diminishing effects of tax benefits or credits seen in earlier years.

In summary, while the federal statutory rate remained unchanged, state taxes increased, and the tax benefits or credits reflected in the foreign differential and other tax items diminished over time. These changes led to a consistent rise in the effective income tax rate during the analyzed period.

Operating Lease Liabilities

The operating lease liabilities show an increasing trend from 2,313,000 thousand USD in 2020 to 2,595,100 thousand USD in 2024, after a slight decrease in 2022. This indicates a general growth in the company's lease obligations over the recent years.

Stored Value Card Liability and Deferred Revenue

Values in this category remain relatively stable but exhibit a minor downward trend from 1,648,900 thousand USD in 2019 to 1,612,500 thousand USD in 2024. This suggests a consistent but slightly declining customer advance payments or deferred revenue.

Intangible Assets and Goodwill

Intangible assets and goodwill have increased significantly, rising from 230,000 thousand USD in 2019 to 372,600 thousand USD in 2024. This growth mostly occurred post-2020 and may reflect acquisitions or revaluations enhancing the asset base.

Accrued Occupancy Costs

Data on accrued occupancy costs is only available for 2019 at 121,600 thousand USD, with no subsequent data to identify trends in this area.

Other Assets

The category labeled "Other" shows an upward trend, increasing from 413,000 thousand USD in 2019 to 692,200 thousand USD in 2024, demonstrating growth in miscellaneous asset items.

Deferred Tax Assets

Deferred tax assets have more than doubled, moving from 2,413,600 thousand USD in 2019 to 5,272,400 thousand USD in 2024, indicating increased recognition of deductible temporary differences or tax loss carryforwards.

Valuation Allowance on Deferred Tax Assets

The valuation allowance increased in magnitude (more negative) from -75,100 thousand USD in 2019 to peaks around -275,300 thousand USD in 2021, before decreasing somewhat to -194,500 thousand USD in 2024. This suggests changes in management's estimate of recoverability of deferred tax assets.

Net Deferred Tax Asset (after Valuation Allowance)

Net deferred tax assets, after deducting the valuation allowance, increased substantially from 2,338,500 thousand USD in 2019 to 5,077,900 thousand USD in 2024, consistent with the gross deferred tax asset trend and adjustments to valuation allowances.

Operating Lease Right-of-Use Assets

Operating lease right-of-use assets show a negative value starting from -2,191,800 thousand USD in 2020, deepening to -2,483,700 thousand USD in 2024. This corresponds with the increase in operating lease liabilities and reflects the recognition of leased assets under accounting standards.

Property, Plant, and Equipment

There is a consistent increase in negative values for property, plant, and equipment, escalating from -400,900 thousand USD in 2019 to -580,800 thousand USD in 2024, indicating increased investments or depreciation affecting net book value.

Other Liabilities

The "Other" liabilities fluctuate slightly but show a slight net decrease from -358,200 thousand USD in 2019 to -267,800 thousand USD in 2024, indicating minor changes in miscellaneous liabilities.

Deferred Tax Liabilities

Deferred tax liabilities have increased significantly, growing from -759,100 thousand USD in 2019 to -3,332,300 thousand USD in 2024, which may reflect growing taxable temporary differences or reassessments of deferred tax liabilities.

Net Deferred Tax Asset (Liability)

The net deferred tax asset (liability), considering both assets and liabilities, remains positive and relatively stable, with a slight increase from 1,579,400 thousand USD in 2019 to 1,745,600 thousand USD in 2024, which indicates a balanced tax position despite underlying movements.

Deferred income tax assets

The deferred income tax assets have shown a generally stable trend over the six-year period. Beginning at 1,765,800 thousand US dollars in 2019, the values experienced a moderate increase, reaching a peak of 1,874,800 thousand US dollars in 2021. Following this peak, there was a slight decline, with the assets decreasing to 1,766,700 thousand US dollars by 2024. Overall, the deferred income tax assets have demonstrated resilience with minimal fluctuation, remaining close to the initial value by the end of the period.

Deferred income tax liabilities (included in Other long-term liabilities)

The deferred income tax liabilities distinctly decreased from 186,400 thousand US dollars in 2019 to a lower level, reaching its minimum at 14,600 thousand US dollars in 2023. Subsequently, there was an observable increase to 21,100 thousand US dollars in 2024. This downward trend followed by a slight uptick indicates a significant reduction in long-term tax liabilities over the years, which may reflect changes in tax planning, asset revaluations, or other financial adjustments impacting the company’s deferred tax position.

Assets

The reported total assets increased significantly from 19,219,600 thousand USD in September 2019 to 31,339,300 thousand USD by September 2024. This growth experienced some fluctuations, notably a peak in October 2021, followed by a decline in October 2022, then a gradual rise again through October 2023 and September 2024. Adjusted total assets followed a similar trajectory, starting at 17,453,800 thousand USD in 2019 and reaching 29,572,600 thousand USD in 2024, also showing a mid-cycle dip in 2022.

Liabilities

Both reported and adjusted total liabilities showed a steady upward trend over the period. Reported liabilities rose from 25,450,600 thousand USD in 2019 to 38,780,900 thousand USD in 2024, and adjusted liabilities moved closely in line, from 25,264,200 thousand USD to 38,759,800 thousand USD. This steady increase indicates a growing level of obligations on the company's balance sheet throughout the timeframe.

Shareholders’ Deficit

The shareholders' deficit, both reported and adjusted, remained negative across all years, reflecting a deficit situation. The reported deficit widened from -6,232,200 thousand USD in 2019 to its most negative point of -8,706,600 thousand USD in 2022, then somewhat improved to -7,448,900 thousand USD by 2024. The adjusted deficit followed a similar pattern but was consistently more negative than the reported figures, suggesting additional adjustments that increased the overall deficit magnitude. This indicates ongoing equity challenges despite fluctuations over the period.

Net Earnings

Reported net earnings exhibited considerable variability. There was a sharp decline from 3,599,200 thousand USD in 2019 to 928,300 thousand USD in 2020, likely reflecting adverse external circumstances, followed by a strong recovery to 4,199,300 thousand USD in 2021. Earnings then declined in 2022 to 3,281,600 thousand USD before rising again in 2023 and slightly decreasing in 2024 to 3,760,900 thousand USD. Adjusted net earnings mirrored this trend closely but were generally lower than reported earnings, indicating the effect of adjustments primarily decreasing the net earnings values.

Overall Insights

Over the six-year period, the company showed growth in total assets and liabilities, with liabilities consistently outpacing assets, which contributed to continued shareholders’ deficits. Earnings demonstrated volatility, with a notable drop in 2020 and a rebound thereafter, suggesting sensitivity to external factors during that period. The adjusted figures reveal a consistent pattern of more conservative asset valuations, higher liabilities, greater deficits, and lower earnings compared to reported amounts, emphasizing the impact of accounting adjustments on the financial position and performance.

The financial data exhibit notable fluctuations across the reported and adjusted metrics over the six annual periods analyzed. The reported net profit margin demonstrated a significant decline in the year ending 2020, dropping from 13.58% in 2019 to 3.95%, followed by a strong recovery to 14.45% in 2021. Subsequently, it showed a moderate decreasing trend, reaching 10.4% by 2024. The adjusted net profit margin mirrors this pattern closely, with a low point of 3.83% in 2020, a rebound to 14.02% in 2021, and a slight downward trend to 10.36% in the latest period.

Total asset turnover ratios, both reported and adjusted, reveal a similar trajectory. Reported total asset turnover declined markedly from 1.38 in 2019 to 0.8 in 2020, suggesting less efficient use of assets during that period. This was followed by a gradual improvement peaking at 1.22 in 2023 before a minor decrease to 1.15 in 2024. The adjusted total asset turnover ratio follows the same trend but with slightly higher values throughout, indicating adjustments have resulted in a portrayal of more efficient asset utilization, especially notable in the later years.

The return on assets (ROA) exhibited considerable variation in both reported and adjusted terms. Reported ROA fell dramatically to 3.16% in 2020 from 18.73% in 2019, then improved to 13.38% in 2021, continuing to rise moderately to a peak of 14.01% in 2023 before declining slightly to 12% in 2024. Adjusted ROA shows a similar pattern, albeit with somewhat higher values. It bottomed at 3.26% in 2020, increased to 13.8% in 2021, reached its highest point at 14.69% in 2023, and then declined to 12.67% in 2024.

Data on financial leverage and return on equity (ROE), both reported and adjusted, were not available, limiting the ability to analyze the company's capital structure or equity efficiency over the periods.

Overall, the data indicate that the company faced a significant dip in profitability and asset efficiency during the 2020 fiscal year, likely reflecting adverse conditions during that period. Following 2020, the company exhibited considerable recovery in both profit margins and asset utilization, with adjusted figures consistently demonstrating slightly better performance metrics than reported figures, suggesting adjustments accounted for factors that positively affect operational assessment. The recent years show mild volatility but generally stable performance relative to the post-2020 rebound.

The financial data reveals notable fluctuations in reported and adjusted net earnings attributable to the company over the six-year period. Reported net earnings exhibited a sharp decline from 3,599,200 thousand USD in 2019 to 928,300 thousand USD in 2020, likely indicating an extraordinary event or impact in that year. Subsequently, reported net earnings recovered significantly to 4,199,300 thousand USD in 2021, followed by a moderate decline and stabilization in the subsequent years, ending at 3,760,900 thousand USD in 2024.

Adjusted net earnings show a marginally different pattern, with a decline from 2,150,400 thousand USD in 2019 to 899,800 thousand USD in 2020. After 2020, adjusted earnings increased substantially to 4,074,300 thousand USD in 2021, then slightly decreased and remained relatively stable around 3,747,300 thousand USD by 2024. The smaller gap between adjusted and reported earnings in later years compared to 2019 suggests the adjustments made for deferred or non-recurring items had less impact over time.

Reported net profit margins also mirrored earnings trends, decreasing from 13.58% in 2019 to 3.95% in 2020, reflecting reduced profitability. Margins improved notably to 14.45% in 2021, before moderating and stabilizing around 10.4% in 2024. The adjusted net profit margins followed a similar path, starting lower at 8.11% in 2019 and dipping slightly to 3.83% in 2020, then climbing to 14.02% in 2021. Margins for adjustments remained comparatively steady at slightly above 10% from 2022 to 2024.

Overall, the data indicates that the company experienced a significant downturn in 2020, followed by a strong recovery in 2021 that tapered to more moderate profitability levels in the subsequent years. The close alignment between reported and adjusted figures from 2022 onwards suggests fewer distortions from non-recurring items or deferred taxes, pointing to more consistent operational performance in recent periods.

Total Assets

The reported total assets demonstrate an overall increasing trend from 19,219,600 thousand USD in 2019 to 31,339,300 thousand USD in 2024. There was a notable rise between 2019 and 2020, followed by a continued gradual increase with a minor dip observed in 2022 before the assets rose again in subsequent periods.

The adjusted total assets follow a similar trajectory, starting at 17,453,800 thousand USD in 2019 and rising to 29,572,600 thousand USD in 2024. The pattern mirrors the reported assets with substantial growth initially, a decrease in 2022, and a rebound afterward. The adjustment reduces the asset values consistently across all years compared to the reported figures.

Total Asset Turnover

The reported total asset turnover ratio displays fluctuation over the years. In 2019, the ratio was relatively strong at 1.38, dropping sharply to 0.80 in 2020. It then recovered steadily to 1.15 by 2022, peaked at 1.22 in 2023, and slightly declined to 1.15 in 2024. This indicates some volatility in the efficiency of asset utilization, particularly the significant decrease during 2020, likely reflecting operational challenges.

The adjusted total asset turnover shows a pattern consistent with the reported figures but with generally higher values. It started at 1.52 in 2019, saw a considerable decline to 0.85 in 2020, then improved progressively to 1.22 in 2024. The adjusted ratios consistently exceed the reported ones, suggesting that after tax adjustments, the company appears more efficient in using its assets to generate revenue.

Total Assets

The reported total assets exhibit an overall upward trajectory from 19.22 billion US dollars in late 2019 to 31.34 billion US dollars by late 2024. There is a noticeable increase between 2019 and 2021, peaking at approximately 31.39 billion US dollars, followed by a moderate decline in 2022. After 2022, the assets gradually increase once more through 2024.

The adjusted total assets follow a pattern similar to that of the reported total assets but consistently show lower values. The adjusted figures begin at roughly 17.45 billion US dollars in 2019 and climb to nearly 29.57 billion US dollars by 2024. This adjustment suggests the exclusion or modification of certain asset components, reflecting a more conservative asset base.

Shareholders’ Deficit

The reported shareholders’ deficit values are negative throughout the entire period and reflect significant volatility. The deficit worsened from about -6.23 billion US dollars in 2019 to approximately -7.81 billion US dollars in 2020. It improved to -5.32 billion US dollars in 2021 but deteriorated sharply again to -8.71 billion US dollars in 2022. In 2023 and 2024, the deficit slightly improves yet remains substantial at -7.99 billion and -7.45 billion US dollars, respectively.

The adjusted shareholders’ deficit, which presumably accounts for deferred income tax adjustments, consistently shows larger negative values than the reported figures. It worsened steadily from about -7.81 billion US dollars in 2019 to a peak deficit of approximately -10.39 billion US dollars in 2022, before marginally improving through 2024 to around -9.19 billion US dollars. The adjusted figures suggest a more severe negative equity position after tax-related adjustments.

Financial Leverage

There is no data provided for either reported or adjusted financial leverage ratios across the periods analyzed. Consequently, no conclusions can be drawn regarding trends or changes in leverage.

Reported Net Earnings Attributable to Starbucks

The reported net earnings demonstrate notable fluctuations over the observed periods. The earnings decreased significantly from 3,599,200 thousand USD in 2019 to 928,300 thousand USD in 2020, reflecting a considerable contraction. Subsequently, earnings rebounded strongly to 4,199,300 thousand USD in 2021, followed by a decline to 3,281,600 thousand USD in 2022. The figures increased again in 2023 to 4,124,500 thousand USD but showed a moderate reduction to 3,760,900 thousand USD in 2024. Overall, the earnings exhibit volatility with a marked recovery post-2020 followed by fluctuations in the subsequent years.

Adjusted Net Earnings Attributable to Starbucks

Adjusted net earnings follow a similar trend to the reported figures, albeit with less pronounced volatility. The amount dropped from 2,150,400 thousand USD in 2019 to 899,800 thousand USD in 2020. Afterward, there was a robust rise to 4,074,300 thousand USD in 2021, then a slight decrease to 3,304,700 thousand USD in 2022. The values increased to 4,065,200 thousand USD in 2023 and slightly declined to 3,747,300 thousand USD in 2024. The adjustment yields values that are consistently lower than the reported earnings but maintain parallel trajectories, indicating consistent adjustments applied across periods.

Reported Shareholders’ Deficit

The reported shareholders’ deficit reveals a general trend of increasing negative shareholder equity across the data set, with some fluctuations. Beginning at -6,232,200 thousand USD in 2019, the deficit worsened to -7,805,100 thousand USD in 2020, showing an increase in liabilities or equity reduction. The deficit then improved to -5,321,200 thousand USD in 2021 but subsequently deteriorated sharply to -8,706,600 thousand USD in 2022. The years 2023 and 2024 show a slight recovery, with deficits of -7,994,800 and -7,448,900 thousand USD respectively. Despite this partial improvement, the shareholders’ deficit remains significantly negative, highlighting ongoing financial challenges.

Adjusted Shareholders’ Deficit

Adjusted shareholders' deficit values are consistently more negative than reported figures, indicating that adjustments increase the magnitude of negative equity. The deficit started at -7,811,600 thousand USD in 2019 and deepened to -9,436,900 thousand USD in 2020. It then improved to -7,047,500 thousand USD in 2021 but deteriorated sharply to -10,387,700 thousand USD in 2022. Similar to the reported deficit, slight improvements are present in 2023 (-9,750,000 thousand USD) and 2024 (-9,194,500 thousand USD), yet the deficit remains substantial throughout the timeline.

Reported and Adjusted ROE

Return on Equity (ROE) data, both reported and adjusted, are not available for the observed periods, limiting the ability to analyze profitability relative to shareholders’ equity.

The financial data reveals several notable trends in earnings, asset levels, and returns over the six-year period analyzed.

Net Earnings

The reported net earnings experienced a substantial decline in 2020, dropping from approximately 3.6 billion USD in 2019 to 928 million USD, reflecting a significant impact during that period. However, the earnings rebounded strongly in 2021, reaching approximately 4.2 billion USD. In the subsequent years, net earnings showed some volatility, with a decrease in 2022 to around 3.3 billion USD, followed by increases in 2023 and a slight decline again in 2024, ending at about 3.8 billion USD.

The adjusted net earnings mirrored a similar pattern, with the lowest point in 2020 at approximately 900 million USD. The adjusted figures also peaked in 2021 at over 4 billion USD and then generally stabilized through 2024, with values slightly below the peaks observed in the reported data but following the same directional trends.

Total Assets

The reported total assets displayed an upward trend from 2019 to 2021, increasing from roughly 19.2 billion USD to 31.4 billion USD. There was a dip in 2022 to about 28 billion USD, followed by a recovery trend through 2023 and 2024, reaching approximately 31.3 billion USD again. This suggests some fluctuation possibly linked to operational or market conditions but an overall growth trajectory.

The adjusted total assets followed a similar trend but consistently reported slightly lower values than the reported figures, indicating adjustments that reduce the asset base. The adjusted assets also increased until 2021, fell in 2022, and then recovered by 2024, ending near 29.6 billion USD.

Return on Assets (ROA)

The reported ROA saw a significant fall in 2020, dropping from 18.73% in 2019 to 3.16%, revealing a sharp decline in profitability relative to asset base during that year. Recovery was evident in 2021, with ROA rising to 13.38%. Although slightly decreasing in 2022 to 11.73%, the ratio increased again to 14.01% in 2023 before settling at 12.00% in 2024.

The adjusted ROA exhibited a similar trend but with generally smaller fluctuations. The lowest point was a decline to 3.26% in 2020, followed by a peak at 13.8% in 2021. Adjusted ROA remained relatively stable afterward, with a slight upward trend through 2023 and a modest decline in 2024, ending at 12.67%.

Overall, the data indicates that the company faced considerable challenges in 2020, likely due to external disruptions, which led to declines in earnings and profitability. The subsequent years showed recovery and a return to growth in net earnings and asset base, although some volatility persisted. The adjusted financial metrics, while reflecting similar trends, suggest a cautious approach in asset valuation and profitability assessment. The ROA metrics confirm the operational challenges in 2020 and the gradual recovery phase, aligning with the earnings and asset patterns observed.