Starbucks Corp. (NASDAQ:SBUX)

The financial performance exhibits notable fluctuations across the observed periods in key profitability ratios. The gross profit margin initially increased significantly from 21.51% in 2020 to a peak of 28.87% in 2021, followed by a decline and stabilization around the mid to high twenties before dropping sharply to 22.77% in 2025. This indicates some variability in cost management or pricing power impacting the core profit from sales.

Operating profit margin shows a similar trajectory, rising markedly to 16.77% in 2021 from 6.64% in 2020, suggesting improved control over operating expenses or enhanced operational efficiency during that period. However, subsequent years evidence a downward trend, with margins decreasing to 7.9% by 2025, which may reflect increased operating costs or pressure on operating income.

Net profit margin follows a comparable pattern, increasing from 3.95% in 2020 to 14.45% in 2021, indicating a significant improvement in bottom-line profitability. This is followed by a gradual decrease to 4.99% in 2025, implying increased expenses, taxes, or other factors diminishing net income relative to revenue over time.

Return on assets (ROA) also reflects these patterns, rising from 3.16% in 2020 to a peak of 14.01% in 2023, demonstrating efficient use of assets to generate earnings. The decline to 5.8% in 2025 signals reduced asset profitability, possibly due to asset base growth outpacing net income or diminishing returns on assets.

Return on equity (ROE) data is not provided, limiting insights into shareholder return trends.

Summary

All profitability indicators reveal a strong improvement around 2021, followed by a period of declining margins through 2025. The company experienced peak operational and net profitability in the early years, with subsequent erosion potentially indicating rising costs, competitive pressures, or operational challenges. Asset efficiency also followed this pattern, peaking in 2023 before a notable decline.

The financial data reveals several notable trends over the examined periods.

Net Revenues

There is a consistent upward trend in net revenues from the initial period to the most recent. Starting at $23,518,000 thousand, net revenues increased steadily each year, reaching $37,184,400 thousand by the last period. This indicates sustained growth in the company's sales or service income over the years.

Gross Profit

Gross profit also shows an overall growth trend, increasing from $5,059,100 thousand to a peak of $9,846,200 thousand in the penultimate period. However, there is a slight decline in the most recent period to $8,467,300 thousand, which could suggest rising costs or other operational challenges affecting profitability at the gross level toward the end of the timeframe.

Gross Profit Margin

The gross profit margin exhibits variability over the periods. It started relatively low at 21.51%, increased sharply to a high of 28.87% in the second period, then fluctuated between approximately 22% and 27% afterward. The margin declined notably in the final period to 22.77%, indicating that while the company maintained growth in revenues, the efficiency in generating profit from those revenues has recently decreased. This could be due to increased costs, pricing pressures, or a change in product mix.

In summary, the company demonstrates strong revenue growth accompanied by increases in gross profit until the recent period where a decline is observed. The gross profit margin's fluctuations suggest variable cost control or pricing strategies impacting overall profitability despite the growth in sales.

Net Revenues

Over the observed periods, net revenues demonstrated a consistent upward trend, increasing from approximately 23.5 billion USD to nearly 37.2 billion USD. This steady growth indicates expanding business operations and increased sales volume or pricing power over time.

Operating Income

Operating income showed significant fluctuations despite overall growth in revenues. Starting from about 1.56 billion USD, it peaked near 4.87 billion USD in 2021, then declined irregularly in subsequent years, ending at roughly 2.94 billion USD. This oscillation suggests variability in operating efficiency, cost management, or other operational factors affecting profitability.

Operating Profit Margin

The operating profit margin closely mirrored operating income trends, exhibiting volatility throughout the timeline. It ascended sharply from 6.64% to a high of 16.77% in 2021, then moderated to a range between approximately 7.9% and 16.3% in following years. The decline to 7.9% by the latest period indicates margins have contracted despite revenue growth, potentially due to increased costs or pricing pressures.

Overall Insights

The data reveals a business experiencing robust revenue growth accompanied by inconsistent operating profitability. The declining operating profit margin in the most recent period, despite record net revenues, raises concerns about rising operational costs or reduced operational leverage. Further analysis could explore underlying causes such as changes in cost structure, competitive dynamics, or investment in growth initiatives impacting short-term profitability.

The financial data reveals several important trends related to profitability and revenue generation over the observed periods.

Net Earnings

Net earnings attributable to the company show significant fluctuations. There was a marked increase from 928.3 million USD in late 2020 to a peak of approximately 4.2 billion USD in 2021. Following this peak, net earnings generally declined over the course of the subsequent years, reaching around 1.85 billion USD by 2025. This downward trend after 2021 indicates challenges affecting profitability or possibly increased costs or investments impacting net income.

Net Revenues

Net revenues demonstrate a consistent upward trajectory throughout the entire period. Revenues grew steadily from 23.5 billion USD in 2020 to approximately 37.2 billion USD by 2025. This consistent revenue growth suggests ongoing expansion or increased sales volume, reflecting an overall positive trend in the company’s top-line performance.

Net Profit Margin

The net profit margin exhibited considerable variability. It increased sharply from 3.95% in 2020 to a high of 14.45% in 2021, indicating improved profitability efficiency during that year. However, margins declined in the following years, falling to under 5% by 2025. This decline, despite rising revenues, suggests that costs or expenses have increased at a faster rate, thereby compressing profit margins.

In summary, the company’s revenue growth is steady and robust, yet the net earnings and profit margins have experienced volatility and a general declining trend after 2021. This indicates that the company has faced increasing cost pressures or other financial challenges that have affected net profitability despite higher sales.

The analysis of the financial data reveals several notable trends regarding profitability and financial position over the observed periods.

Net Earnings Attributable to Starbucks (US$ in thousands)

The net earnings experienced significant fluctuations throughout the periods. Starting at 928,300 in 2020, there was a substantial increase to 4,199,300 in 2021. However, this was followed by a decline to 3,281,600 in 2022. In the subsequent years, net earnings showed some recovery with 4,124,500 in 2023 but trended downward again to 3,760,900 in 2024 and further dropped sharply to 1,856,400 in 2025. This volatility indicates variability in operational profitability and possibly reflects changes in market conditions, cost structures, or other external factors affecting earnings performance.

Shareholders’ Deficit (US$ in thousands)

The shareholders’ deficit, indicating the negative equity position, also displayed considerable variation over the periods. It improved from -7,805,100 in 2020 to -5,321,200 in 2021, suggesting a reduction in deficit and potentially stronger equity. However, this improvement was not sustained as the deficit increased sharply to -8,706,600 in 2022. The following years saw some reduction in the deficit to -7,994,800 in 2023 and -7,448,900 in 2024, but it worsened again to -8,096,600 in 2025. The persistent and fluctuating shareholders’ deficit may point to ongoing challenges in maintaining positive equity, possibly due to accumulated losses, dividend policies, or capital structure decisions.

Return on Equity (ROE, %)

No data was provided for return on equity, precluding direct analysis of this key profitability ratio. Given the negative shareholders’ equity position in all periods, calculating meaningful ROE figures might be complicated or misleading due to the negative denominator.

Overall, the financial data reflects a company experiencing operational earnings volatility alongside a consistently negative equity position. The fluctuating net earnings indicate challenges in maintaining stable profitability. Meanwhile, the shareholders’ deficit suggests that despite periods of improvement, the company continues to face considerable equity deficiencies, which could impact financial stability and investor confidence.

Net Earnings Attributable to Starbucks

The net earnings demonstrate notable fluctuations over the examined periods. After an initial value of approximately 928 million, earnings sharply increased in the following year, reaching over 4.1 billion. Subsequently, earnings decreased somewhat but remained above 3 billion until a significant decline occurs in the final recorded year, dropping to around 1.86 billion. This pattern indicates periods of strong profitability interspersed with downward adjustments, suggesting variability in operational or market conditions affecting profitability.

Total Assets

Total assets exhibit a generally increasing trend with some variability. Starting at just under 29.4 billion, the asset base grows to over 31.3 billion by the last two periods. There is a temporary decrease observed around the third year, but the overall trajectory indicates asset growth which might suggest expansions, investments, or acquisitions. This accumulation of assets over time provides a foundation for potential revenue generation, though it is not strictly correlated with net earnings trends.

Return on Assets (ROA)

ROA shows considerable volatility throughout the periods. Beginning at a modest 3.16%, the ratio peaks sharply at 14.01% in the fourth period before declining to 5.8% in the last period. The elevated ROA values in some years indicate efficient use of assets to generate earnings at those times, while the decline toward the end suggests a reduction in asset efficiency or diminished profitability relative to asset size.

Overall Analysis

The financial data reveals cyclical profitability with an upward trend in assets, but decreasing profitability and asset efficiency towards the latest period. The decline in net earnings combined with a lower ROA in the final year highlights potential challenges in maintaining profitability despite asset growth. These patterns may warrant further examination of the underlying causes such as market conditions, operational efficiency, or investment strategies.