Starbucks Corp. (NASDAQ:SBUX)

The financial data reveals several notable trends and insights over the periods analyzed.

Net Operating Profit After Taxes (NOPAT)

The NOPAT figures exhibit significant fluctuations throughout the periods. Initially, there was a decrease from approximately 2.23 billion US dollars in 2019 to about 1.48 billion in 2020, likely reflecting adverse impacts during that year. Following this decline, there was a strong recovery with NOPAT rising to over 4.6 billion US dollars in 2021, a decline to around 3.7 billion in 2022, and then an increase again reaching roughly 4.6 billion in 2023 before a slight decrease to 4.4 billion in 2024. These trends suggest a period of volatility with recovery and growth phases after an initial setback.

Cost of Capital

The cost of capital remained relatively stable over the years, with a narrow range between approximately 11.65% and 12.14%. This consistency indicates a steady risk profile and financing costs for the company over the evaluated periods.

Invested Capital

Invested capital showed a general upward trend, increasing from about 20 billion US dollars in 2019 to approximately 23.5 billion in 2024. Some fluctuations were observed, including a peak near 23.7 billion in 2021 and a dip to roughly 20.5 billion in 2022, followed by subsequent growth. This pattern suggests ongoing investment activities, with some adjustments in capital deployment possibly reflecting strategic decisions or external economic conditions.

Economic Profit

Economic profit displayed significant variability. It started negative at around -167 million US dollars in 2019 and worsened to about -1.2 billion in 2020, indicating underperformance relative to the cost of capital during that period. Subsequently, there was a strong turnaround with positive economic profit exceeding 1.7 billion in 2021. Although it decreased to approximately 1.3 billion in 2022, it rose again to nearly 1.9 billion in 2023 before a slight drop to approximately 1.6 billion in 2024. The recovery and positive economic profits suggest improved value creation and efficient capital utilization following the earlier challenges.

Overall, the data indicates a period marked by an initial decline in profitability and economic value during 2020, followed by a recovery phase characterized by increased profitability, stable capital costs, and growth in invested capital. Despite some fluctuations, the later years demonstrate stronger financial performance and positive economic profit, reflecting improved operational efficiency and value generation.

Net Earnings Attributable to Starbucks

The net earnings exhibited significant fluctuation over the analyzed periods. There was a notable sharp decline from 3,599,200 thousand USD in 2019 to 928,300 thousand USD in 2020, indicating a challenging financial year likely influenced by external factors impacting the business environment.

Subsequently, net earnings recovered markedly in 2021 to 4,199,300 thousand USD, surpassing the pre-decline levels, demonstrating a strong rebound. However, this was followed by a decrease in 2022 to 3,281,600 thousand USD before increasing again to 4,124,500 thousand USD in 2023, showing increased volatility within these years.

In 2024, net earnings slightly decreased to 3,760,900 thousand USD, suggesting some degree of contraction or stabilization after previous gains. Overall, the net earnings reflect a pattern of sharp decline followed by recovery and subsequent fluctuations.

Net Operating Profit After Taxes (NOPAT)

NOPAT trends align partially with net earnings but demonstrate a steadier progression. The measure dropped from 2,231,571 thousand USD in 2019 to 1,475,541 thousand USD in 2020, reflecting a reduction in operational profitability post-tax during the same downturn period.

From 2020 onwards, NOPAT increased significantly to 4,625,159 thousand USD in 2021, indicating improved operating efficiency and profitability. Although it declined to 3,732,356 thousand USD in 2022, it rebounded again in 2023 reaching 4,602,842 thousand USD.

In 2024, there was a slight reduction to 4,408,732 thousand USD, similar to the pattern observed in net earnings. Despite fluctuations, the overall trajectory points to recovery and resilience in operating performance after the initial dip.

General Observations

The period under review reveals a significant impact in the 2020 financial year, possibly linked to broader economic conditions affecting profitability and operations. Subsequent years show recovery and growth, though with some variability.

The correlation between net earnings and NOPAT suggests operational factors primarily drive profitability changes, with tax effects playing a role but less volatility than seen in net earnings.

Overall, despite short-term challenges, the financial performance indicates the company has maintained a capacity for recovery and sustained profit generation over the long term.

Income Tax Expense

The income tax expense exhibits notable fluctuations over the analyzed periods. It decreases significantly from 871,600 thousand US$ in 2019 to 239,700 thousand US$ in 2020. This is followed by a substantial increase to 1,156,600 thousand US$ in 2021. A decline to 948,500 thousand US$ occurs in 2022, after which the expense rises again to 1,277,200 thousand US$ in 2023 before slightly decreasing to 1,207,300 thousand US$ in 2024. Overall, the trend indicates considerable volatility in the income tax expense with marked peaks in 2021 and 2023.

Cash Operating Taxes

Cash operating taxes demonstrate a steep decline from 2,451,257 thousand US$ in 2019 to 405,721 thousand US$ in 2020, representing a significant reduction. Following this, there is a recovery with the tax amount increasing to 1,427,074 thousand US$ in 2021 and then varying downward to 1,074,728 thousand US$ in 2022. The amount again rises in subsequent years to 1,512,061 thousand US$ in 2023 before decreasing slightly to 1,412,248 thousand US$ in 2024. This pattern suggests initial tax relief or reduction in operational tax liabilities in 2020, with a gradual recovery in tax payments in the following years, though the values remain well below the 2019 level.

The financial data reveals several notable trends over the six-year period.

Total Reported Debt & Leases

This figure demonstrates an overall upward trajectory from 19,966,637 thousand USD in 2019 to 25,803,100 thousand USD in 2024. There was a significant increase between 2019 and 2020, exceeding 4.8 billion USD. A slight decrease occurred in 2021 and 2022, followed by a renewed increase in 2023 and 2024. The pattern suggests fluctuating but generally rising leverage levels.

Shareholders’ Deficit

The shareholders’ deficit exhibits considerable volatility during the period. The deficit deepened from a negative 6,232,200 thousand USD in 2019 to a low point of -7,805,100 thousand USD in 2020, indicating an increase in net liabilities relative to equity. The deficit improved in 2021 but deteriorated sharply again in 2022, reaching the lowest level of -8,706,600 thousand USD. Slight recovery is noted in 2023 and 2024, though the deficit remains substantially negative, reflecting continued equity challenges.

Invested Capital

Invested capital initially rose from 20,030,637 thousand USD in 2019 to a peak of 23,683,800 thousand USD in 2021. However, a notable contraction follows in 2022, with invested capital dropping to 20,459,700 thousand USD. Subsequent years show a gradual rebound, reaching 23,526,800 thousand USD in 2024, nearly matching the previous peak. This suggests fluctuations in the base of capital employed, potentially correlating with operational adjustments or capital allocation strategies.

Overall, the data reflects increasing debt obligations accompanied by fluctuating equity deficits and an invested capital base that experiences contraction and recovery phases. These patterns may indicate strategic financial management efforts to balance growth, capital structure, and equity concerns amid varying market conditions.

Economic Profit

The economic profit displayed notable volatility over the observed periods. It began with a negative value of approximately -167 million US dollars in 2019, followed by a steep decline in 2020 reaching about -1.2 billion US dollars. Subsequent years showed a strong recovery, with positive economic profits starting in 2021 at roughly 1.77 billion, further increasing to 1.27 billion in 2022, peaking at 1.91 billion in 2023, and then experiencing a slight decrease to about 1.61 billion in 2024.

Invested Capital

Invested capital steadily increased from 20.03 billion US dollars in 2019 to a peak of approximately 23.68 billion in 2021. This was followed by a decline to 20.46 billion in 2022. The invested capital then rose again to 22.17 billion in 2023 and further to 23.53 billion in 2024. Overall, the trend reflects moderate growth with minor fluctuations across the periods.

Economic Spread Ratio

The economic spread ratio mirrored the trends observed in economic profit. It was negative in the initial two years, with -0.83% in 2019 and a larger negative spread of -5.23% in 2020, indicating value destruction. Starting from 2021, the ratio turned positive at 7.46%, then slightly decreased to 6.20% in 2022, peaked at 8.62% in 2023, and declined to 6.82% in 2024. These fluctuations suggest varying profitability relative to the cost of capital over the years.

Summary

The financial data indicates a sharp downturn in economic profitability in 2020, likely influenced by external challenges during that period. Recovery trends in economic profit and economic spread ratio since 2021 highlight improved operational efficiency or market conditions. Invested capital experienced growth with intermittent decreases, which might correspond to strategic capital allocation or asset management decisions. Overall, the data reflects a recovery phase following a significant downturn, with positive economic return measures in the latter years.

Economic Profit

The economic profit experienced significant fluctuations over the analyzed periods. Initially, it was negative at -167,083 thousand USD in 2019, which worsened substantially to -1,201,520 thousand USD in 2020. Subsequently, there was a marked recovery with economic profit turning positive in 2021 at 1,767,100 thousand USD, staying positive throughout the later years though with some variation. The highest value during this period was 1,910,867 thousand USD in 2023, followed by a slight decrease to 1,605,363 thousand USD in 2024. This trend suggests a strong turnaround after 2020 and a generally sustainable level of economic profitability thereafter.

Adjusted Net Revenues

Adjusted net revenues showed an overall increasing trend throughout the analyzed years. Starting at 26,103,400 thousand USD in 2019, revenues declined in 2020 to 23,559,600 thousand USD, reflecting a challenging environment likely affecting sales. Nonetheless, from 2021 onward, revenues recovered robustly, increasing steadily each year to reach 36,119,000 thousand USD in 2024. This consistent growth indicates strong sales momentum and successful revenue generation strategies post-2020.

Economic Profit Margin

The economic profit margin mirrored the pattern seen in economic profit values. It was negative in 2019 at -0.64%, deepened considerably to -5.10% in 2020, and then reversed to positive territory by 2021 with 6.08%. Following this peak, margins decreased slightly but remained healthy and positive, registering 3.95% in 2022, 5.33% in 2023, and 4.44% in 2024. This indicates that while profitability margins improved markedly after the downturn in 2020, there has been some variability but sustained profitability in recent years.

Overall Insights

The data reveals a significant impact on profitability and revenues in 2020, likely due to external economic conditions. The company managed a robust recovery from 2021 onwards, achieving positive economic profit and margin alongside consistent revenue growth. Although economic profit and margins showed some variability in the later years, the overall performance suggests improved operational efficiency and a strong financial position in recent periods.