Starbucks Corp. (NASDAQ:SBUX)

The financial data reflects key performance metrics over multiple quarterly periods, highlighting trends primarily in profitability as indicated by the Return on Assets (ROA). The absence of data for Financial Leverage and Return on Equity (ROE) limits the ability to analyze leverage impact and shareholder returns comprehensively.

Return on Assets (ROA)

The ROA demonstrates a significant upward trajectory starting at 2.22% at the end of 2020 and reaching a peak of 15.24% in the first quarter of 2022. This increase indicates improved efficiency in generating profits from the company's assets during this period.

Following the peak, ROA shows a gradual decline starting in the second quarter of 2022, decreasing from 15.19% to 5.8% by the third quarter of 2025. This downward trend suggests a reduced ability to generate returns from assets, potentially due to operational challenges or increased asset base without proportional profit growth.

Intermediate fluctuations are observed with minor increases and decreases, but the overall movement from early 2022 onwards is downward. The decline appears steady across the more recent quarters, indicating a sustained trend rather than short-term volatility.

In summary, the analyzed metric depicts an initial phase of improving asset utilization and profitability, followed by a period of steady decline in returns. The lack of data on financial leverage and equity returns restricts deeper insights into the influences driving these changes. Attention to operational efficiency, asset management, and profitability drivers is advisable to address the decreasing ROA trend.

Net Profit Margin

The net profit margin demonstrated a strong upward trend beginning at 2.87% at the end of 2020 and peaking around the early months of 2022 at approximately 14.47%. Following this peak, the margin displayed a gradual decline with some fluctuations, decreasing steadily to 4.99% by the third quarter of 2025. This pattern indicates an initial period of improving profitability, followed by a sustained contraction in profit margins in the latter periods.

Asset Turnover

Asset turnover experienced consistent improvement from a ratio of 0.77 at the end of 2020 to a peak of approximately 1.26 by the first quarter of 2024. After reaching this high, a slight decrease was observed, settling around the range of 1.09 to 1.16 towards the end of the period analyzed. This suggests increased efficiency in utilizing assets to generate revenue over most of the timeframe, with some moderation in efficiency gains in the later quarters.

Financial Leverage and Return on Equity (ROE)

Data on financial leverage and return on equity were not available in the periods analyzed, limiting the ability to assess the impact of leverage on profitability and shareholder returns during this timeframe.

Tax Burden

The tax burden ratio exhibited a generally stable pattern, maintaining values close to 0.75 to 0.78 throughout the observed quarters. In the most recent periods, there is a slight downward trend toward approximately 0.74, indicating a marginal reduction in the effective tax rate burden on pre-tax earnings.

Interest Burden

The interest burden ratio showed a progressive increase from 0.64 to around 0.92 between late 2020 and early 2022, reflecting a reduced interest expense burden during this time. Thereafter, it slightly declined after the peak, trending downward to 0.82 by late 2025, which may suggest a relative increase in interest expenses or changes in financial costs affecting operating income.

EBIT Margin

The EBIT margin experienced significant growth from an initial 5.6% in late 2020 to a peak near 20% by early 2022. This indicates marked improvement in operational profitability during this period. Following the peak, the margin consistently decreased quarter over quarter, falling to approximately 8.2% by late 2025. This trend points to increasing costs or decreasing operating efficiency over time.

Asset Turnover

Asset turnover ratios generally increased from 0.77 in late 2020 to a high of about 1.26 in early 2024, indicating increasing efficiency in asset utilization to generate revenue. However, after this peak, the ratio slightly declined and stabilized around 1.09 to 1.16 toward the end of the period, suggesting a modest reduction in asset efficiency but overall maintaining relatively strong turnover levels.

Financial Leverage and Return on Equity (ROE)

No data is available for financial leverage and ROE, hence no analysis can be provided for these metrics.

Net Profit Margin

The net profit margin exhibited a significant upward trend from the end of 2020 through early 2022, rising from 2.87% to a peak of approximately 14.47%. Following this peak, the margin showed a gradual decline through late 2023 and into 2024, stabilizing around the 11% range before experiencing a sharper decrease starting in the first quarter of 2025, dropping to 4.99% by the latest quarter. This pattern suggests an initial phase of improving profitability efficiency, followed by a period of contraction in margin rates, indicative of potential cost pressures or pricing challenges affecting overall profitability.

Asset Turnover

Asset turnover showed a consistent increase from 0.77 at the end of 2020 to a high of 1.26 in early 2024, indicating improved efficiency in using assets to generate revenue. Post this peak, the ratio experienced minor fluctuations but largely maintained an elevated level above 1.0. The ratio moderately declined starting in early 2025 but rebounded slightly by the latest quarter. This trend reflects ongoing enhancements in asset utilization over the longer term, albeit with some volatility in recent quarters.

Return on Assets (ROA)

The ROA mirrored the net profit margin trend, increasing markedly from 2.22% at the end of 2020 to a peak of 15.24% in early 2022. Subsequently, it declined steadily through 2023 and 2024, dropping to just 5.8% by the most recent quarter. This decline in ROA following its peak, despite relatively stable asset turnover, points to diminishing net profit contributions relative to the asset base, possibly driven by narrowing profit margins or increased operational costs.

Overall Analysis

The data reveal an initial period of marked financial improvement characterized by rising profitability and greater asset efficiency. However, after reaching peak performance between early 2022 and early 2024, there is a clear downward trend particularly in profitability ratios, suggesting emerging challenges that impact earnings despite sustained asset usage effectiveness. The combination of declining net profit margin and ROA alongside mostly stable asset turnover suggests that profitability constraints, rather than asset underutilization, are influencing performance in the most recent periods.

Tax Burden Ratio

The tax burden ratio has exhibited a gradual decline over the observed periods, starting from 0.80 and moving down to 0.74. This suggests a slight reduction in the proportion of earnings retained after taxes, indicating some increase in the tax expense relative to pre-tax earnings.

Interest Burden Ratio

The interest burden ratio showed a substantial improvement early on, rising from 0.64 to 0.92. After reaching this peak, it remained relatively stable between 0.88 and 0.91 before experiencing a modest decline towards the end, reaching 0.82. Overall, the trend indicates an initially improved but somewhat fluctuating ability to cover interest expenses from operating income.

EBIT Margin

There was a significant increase in EBIT margin from 5.6% to a peak of over 20%, reflecting improved operating profitability during the mid-period. However, after this peak, the margin steadily declined to 8.2% in the most recent quarter. This downward trend indicates reduced operating efficiency or higher operating costs impacting profit generation.

Asset Turnover Ratio

The asset turnover ratio consistently improved from 0.77 to a peak of 1.26, indicating enhanced efficiency in utilizing assets to generate sales. Despite small fluctuations in the later periods, the ratio remained above 1.0, which suggests sustained operational efficiency in asset use.

Return on Assets (ROA)

The return on assets increased markedly from 2.22% to a high of close to 15%, showing strong gains in asset profitability. Following this peak, ROA gradually fell to approximately 5.8%, reflecting decreasing returns from asset investments. This decline aligns with diminishing EBIT margins and the late-period dip in interest burden ratio, pointing toward some pressure on profitability despite stable asset utilization.

Tax Burden

The tax burden ratio has shown relative stability throughout the observed periods, remaining generally around 0.76 to 0.78 with a slight decline toward the end, reaching approximately 0.74. This indicates that the company’s effective tax rate has been fairly consistent with a minor downward trend in the later periods.

Interest Burden

The interest burden exhibits an upward trend from approximately 0.64 to around 0.92 early in the timeline, signifying improved operational earnings before interest expenses relative to earnings before taxes. However, this ratio begins a gradual decline starting around the latter periods, decreasing to about 0.82 by the final observation, which may suggest rising interest expenses or lower operating income coverage.

EBIT Margin

The EBIT margin experienced a strong positive trend from an initial 5.6% rising sharply to highs above 20% in several mid-range periods, reflecting improved operational profitability. After peaking, there is a noticeable downward trajectory starting roughly at the beginning of 2023, with margins gradually decreasing to 8.2% by the final period. This decline points to diminishing operational efficiency or increased costs impacting earnings before interest and taxes.

Net Profit Margin

The net profit margin follows a similar pattern to the EBIT margin, increasing substantially from 2.87% to over 14% in the mid-periods, then experiencing a gradual decline starting in early 2023. By the last periods, net margin decreases to just below 5%, indicating a reduction in profitability after accounting for interest, taxes, and other expenses. The overall trend suggests that despite earlier improvements, profitability pressures have increased more recently.