Starbucks Corp. (NASDAQ:SBUX)

The financial data reveals several notable trends in the company’s performance over the analyzed years. The composition of net revenues shows that revenue from company-operated stores remains the largest segment, consistently around 81-83%, with slight fluctuations, peaking at 84.67% in 2021. Licensed stores have increased their contribution from approximately 9.9% to over 12% by 2023 before a slight dip in 2025. Other revenue streams have decreased modestly over time, representing around 5-8% of total net revenues.

Cost Structure

Product and distribution costs as a percentage of net revenues have remained relatively stable, fluctuating around the 31% mark. Wages and benefits have shown some variability, initially declining from 26.07% to below 24.5% in 2023-2024, before increasing back to over 26.5% in 2025, indicating potential increases in labor costs or changes in staffing. Occupancy costs have steadily declined from just over 10% in 2020 to under 9% by 2025, suggesting improved management or reductions in fixed store costs. Other expenses related to operations have gradually increased from 9.54% to 10.43%, offsetting some gains from occupancy cost reductions.

Store Operating and Cost of Revenues

Store operating expenses showed a decline from 45.77% in 2020 to a low near 40.92% in 2023, but rose back to nearly 46% by 2025, indicating varying efficiencies or cost pressures at the store level. The overall cost of revenues followed a similar pattern, decreasing substantially in 2021 to about 71% but rising again to over 77% by 2025, which may reflect inflationary pressures or increased input costs.

Profitability Metrics

Gross profit margin improved noticeably from 21.51% in 2020 to a peak of about 28.87% in 2021, before declining gradually to 22.77% in 2025, implying some erosion in product margins or pricing pressure. Operating income also peaked in 2021 at 16.77% of net revenues and then decreased steadily to 7.9% by 2025, demonstrating a significant decline in operating profitability. Earnings before income taxes and net earnings attributable to the company followed the same trend, with a strong showing in 2021 and a marked decrease by 2025, hinting at challenges in maintaining profitability.

Expenses and Other Income

Depreciation and amortization expenses have decreased as a percentage of net revenues from 6.09% to under 4.6%, possibly due to asset optimization or the completion of prior capital expenditures. General and administrative expenses have remained relatively stable, near 7%. Restructuring and impairment costs showed a declining trend through 2023 but rose sharply in 2025 to 2.4%, which may indicate special charges or operational restructuring events in that year. Income from equity investees declined from 1.37% to about 0.67%, showing reduced contribution from associated operations. Gains from asset sales and divestitures were sporadic and had minor impacts overall.

Taxation and Interest

Interest expense relative to net revenues has decreased slightly from 1.86% to about 1.46%, reflecting possible debt management improvements. Income tax expense as a percentage of net revenues peaked in 2021 and then diminished by 2025, consistent with the reduction in earnings before taxes. Overall, the effective tax rate appears variable but trending lower in the most recent years.

In summary, while the company demonstrated strong revenue composition and improved margins in 2021, subsequent years brought challenges that reduced profitability and increased certain cost components. There are indications of cost pressures, particularly in wages and other operating expenses, which alongside lower gross margins, have compressed operating and net earnings by 2025. Restructuring activities resurfaced notably in the latest year, further impacting profitability. The data suggest that maintaining previous levels of profitability may require renewed operational efficiencies, cost control measures, or strategic adjustments in response to evolving market conditions.