Starbucks Corp. (NASDAQ:SBUX)

The analysis of the annual property, plant, and equipment (PP&E) data reveals several key trends over the six-year period under review.

Land

The recorded value of land remained relatively stable from 2019 through 2023, fluctuating slightly around the mid-46000 (US$ in thousands). A noticeable increase occurred in 2024, with the value rising to 56900, indicating a significant investment or acquisition during the latest year.

Buildings

Building assets decreased markedly from 691500 in 2019 to a low of 555400 in 2022, followed by a strong recovery in 2023 and 2024, reaching 684800. This suggests a period of divestment or impairment followed by renewed capital expenditure or revaluation.

Leasehold Improvements

This category demonstrated consistent growth throughout the period, increasing every year from 7948600 in 2019 to 11453900 in 2024. The steady upward trend indicates ongoing investments to enhance leased properties.

Store Equipment

Store equipment showed a steady increase from 2659500 in 2019 to 3803600 in 2024. The growth reflects continuous upgrading or expansion of operational assets.

Roasting Equipment

Values for roasting equipment increased gradually from 769600 in 2019 to 857200 in 2021, followed by slight fluctuations with a modest rise to 865700 in 2024. This indicates moderate maintenance or selective investment in roasting facilities.

Capitalized Software

This item appears only in the last two reporting periods, with values of 897200 in 2023 and 1049700 in 2024, signaling recent investment in technology assets that were not previously capitalized or reported.

Furniture, Fixtures, and Other

This category experienced a decline from 1799000 in 2019 to a low of 767300 in 2023, with a marginal increase to 775500 in 2024. The downward trend suggests dispositions or impairments, potentially related to asset optimization or reclassification.

Work in Progress

Work in progress showed an upward trajectory from 358500 in 2019 to 750900 in 2024. The growth indicates increased ongoing projects or capital projects under development.

Property, Plant and Equipment, Gross

The gross PP&E value held fairly steady between 14.27 billion and 15.61 billion from 2019 to 2022, then increased significantly to 19.44 billion by 2024. This increase suggests considerable capital investment in later years.

Accumulated Depreciation

Accumulated depreciation increased steadily in absolute terms (becoming more negative) from -7.84 billion in 2019 to -10.78 billion in 2024. This reflects the aging of assets and consistent application of depreciation over time.

Property, Plant and Equipment, Net

The net PP&E value decreased slightly from 6.43 billion in 2019 to 6.24 billion in 2020, then gradually rose each year to reach 8.67 billion in 2024. This indicates that new additions and capital investments outpaced depreciation, resulting in expansion of the net asset base.

In summary, the data indicate an overall strategy of sustained investment in leasehold improvements, store equipment, and work in progress, alongside recent capitalized software expenditures. Despite some declines in buildings and furniture categories in earlier years, recovery and growth were notably strong towards the end of the period, resulting in significant growth in the company's net property, plant, and equipment asset base by 2024.

Average Age Ratio

The average age ratio shows a general upward trend from 55.12% in 2019 to a peak of 58.14% in 2022, indicating that the property, plant, and equipment assets on average were becoming older over this period. This increase suggests a slower pace of asset renewal or acquisition relative to asset depreciation during these years.

In the last two reported periods, 2023 and 2024, the average age ratio decreased slightly to 57.48% and further to 55.59%, respectively. This decline may imply a recent effort towards refreshing or acquiring newer assets, thereby reducing the collective asset age and potentially enhancing operational efficiency.

Overall, while the average age ratio had been rising steadily for several years, the recent downward movement could indicate a strategic shift in asset management or capital expenditure priorities aimed at maintaining a more up-to-date fixed asset base.

Property, Plant, and Equipment - Gross

There is a consistent upward trend in the gross value of property, plant, and equipment over the observed periods. Starting from approximately $14.27 billion in 2019, the value increases steadily each year, reaching nearly $19.44 billion by 2024. This indicates ongoing investment or acquisition in fixed assets.

Accumulated Depreciation

The accumulated depreciation also shows a continuous increase across the periods, rising from about $7.84 billion in 2019 to roughly $10.78 billion in 2024. The growth in accumulated depreciation aligns with the increase in gross property, plant, and equipment, reflecting the aging and usage of assets over time.

Land

The value of land remains relatively stable around $46,000 to $46,900 thousand from 2019 to 2023, with a notable increase to $56,900 thousand in 2024. This jump may suggest acquisition of additional land or revaluation during the most recent period.

Average Age Ratio

The average age ratio, expressed as a percentage, generally trends upward from 55.12% in 2019 to a peak of 58.14% in 2022, indicating that the overall asset base is aging. However, there is a slight decline afterward to 55.59% by 2024, which might reflect newer asset purchases or retirements of older equipment.

Overall Analysis

The data indicates a pattern of growing investment in fixed assets, accompanied by a proportional increase in accumulated depreciation. The increase in the average age ratio until 2022 suggests an aging asset base, but the subsequent decrease could imply efforts to modernize or update the property, plant, and equipment. The consistent value in land with a spike in the final year might reflect strategic acquisitions or revaluation efforts.