Starbucks Corp. (NASDAQ:SBUX)

Gross Profit Margin

The gross profit margin experienced a notable decrease in the year ending September 27, 2020, dropping to 21.51% from 28.25% the previous year. Following this decline, the margin rebounded to near previous levels at 28.87% in 2021 but showed some variability afterward, decreasing to 25.96% in 2022, then increasing slightly to 27.37% in 2023, and marginally declining to 26.84% by 2024. The initial sharp drop and subsequent fluctuations suggest pressures on cost control or pricing strategies during and after 2020.

Operating Profit Margin

The operating profit margin mirrored a similar trend, with a significant fall from 15.38% in 2019 to 6.64% in 2020. Recovery occurred in 2021, reaching 16.77%, followed by a gradual decline to 14.32% in 2022, a modest increase to 16.32% in 2023, and a subsequent decrease to 14.95% in 2024. These shifts indicate ongoing challenges in operating efficiency or increased expenses impacting operating profitability during this period.

Net Profit Margin

The net profit margin also declined substantially in 2020, dropping to 3.95% from 13.58% in 2019. It rebounded to 14.45% in 2021 but then experienced declines in the next years to 10.18% in 2022, 11.46% in 2023, and 10.4% in 2024. The pattern suggests that despite recovery efforts, net profitability remained under pressure compared to pre-2020 levels, possibly reflecting increased costs, taxes, or financing expenses.

Return on Equity (ROE)

Return on equity data is missing for all periods, precluding trend analysis or conclusions regarding shareholder returns from equity during these years.

Return on Assets (ROA)

Return on assets followed a sharp decline in 2020, decreasing from 18.73% in 2019 to 3.16%. A partial recovery ensued, with ROA increasing to 13.38% in 2021, then fluctuating moderately at 11.73% in 2022, rising to 14.01% in 2023, and declining slightly to 12% in 2024. This indicates the company's ability to generate income from assets was significantly impaired in 2020 but has been gradually improving, although not reaching the levels observed in 2019.

Net Revenues Trend

Net revenues displayed a decline from 26,508,600 thousand US dollars in 2019 to 23,518,000 thousand US dollars in 2020. Subsequently, there was a steady increase year-over-year, reaching 36,176,200 thousand US dollars by 2024. This indicates a recovery and growth phase following the initial drop in 2020.

Gross Profit Dynamics

Gross profit followed a similar pattern to net revenues. It decreased sharply from 7,488,100 thousand US dollars in 2019 to 5,059,100 thousand US dollars in 2020. Afterwards, gross profit grew steadily, peaking at 9,846,200 thousand US dollars in 2023 before slightly declining to 9,709,100 thousand US dollars in 2024. Despite this minor decrease, the overall trend is positive, showing improvement compared to the low point in 2020.

Gross Profit Margin Analysis

Gross profit margin exhibited notable volatility during the period. It decreased significantly from 28.25% in 2019 to 21.51% in 2020, corresponding with the drop in gross profit and revenues. The margin then recovered to 28.87% in 2021. However, it declined again in the following years, settling at 26.84% in 2024. Although the margin did not return to its initial highest level, it remained relatively stable above 25% after 2021.

Overall Observations

The financial trends indicate that the company experienced a significant downturn in 2020, likely due to external factors impacting revenues and profitability. Following this period, there was a consistent recovery and growth in net revenues and gross profit. While gross profit margin showed some fluctuations, it stabilized at a moderate level post-2021. The minor decrease in gross profit in 2024 against a slight increase in net revenues could warrant further analysis to understand cost or pricing factors influencing profitability.

Net Revenues

The net revenues show a decline from 26,508,600 thousand US dollars in 2019 to 23,518,000 thousand US dollars in 2020, indicating a decrease likely influenced by external factors during that period. Subsequently, the revenues recover and increase steadily through 2021 to 2024, reaching 36,176,200 thousand US dollars. This represents a strong upward trend after the initial drop, reflecting growth and expansion over the latter years.

Operating Income

Operating income displays a sharp reduction from 4,077,900 thousand US dollars in 2019 to 1,561,700 thousand US dollars in 2020, paralleling the revenue decline observed in the same year. However, there is a significant rebound in 2021, with operating income rising to 4,872,100 thousand US dollars followed by fluctuations in subsequent years, reaching 5,408,800 thousand US dollars in 2024. Although the 2024 figure is somewhat lower than 2023, the overall trend after 2020 is positive, indicating improved profitability after the initial downturn.

Operating Profit Margin

The operating profit margin drops considerably from 15.38% in 2019 to 6.64% in 2020, which coincides with the reduced operating income and revenues in that year. The margin recovers strongly in 2021 to 16.77%, surpassing the 2019 level, followed by a decline to 14.32% in 2022. Subsequently, it rises again to 16.32% in 2023 before slightly decreasing to 14.95% in 2024. Despite some volatility, the margin remains above 14% from 2021 onward, suggesting overall effective cost management and operational efficiency recovery post-2020.

Overall Observations

The data reveals a pronounced impact on financial performance in 2020, with declines in revenue, operating income, and profit margin likely reflecting adverse conditions during that period. From 2021 onward, there is a clear recovery and growth trajectory characterized by increasing revenues and improved profitability metrics. Operating profit margin variability indicates some fluctuations in cost controls or pricing strategies but generally maintains a healthy level above 14%. The company demonstrates resilience and improved financial health in the latter years analyzed.

Net earnings attributable to Starbucks

The net earnings showed significant fluctuation over the years. Starting at approximately 3.6 billion USD in 2019, there was a sharp decline to around 928 million USD in 2020, likely influenced by external adverse factors during that period. Subsequently, earnings rebounded strongly in 2021 to approximately 4.2 billion USD, surpassing the 2019 level. However, in 2022, earnings declined again to about 3.3 billion USD. The upward trend resumed in 2023 with earnings rising to approximately 4.1 billion USD, followed by a moderate decrease to roughly 3.8 billion USD in 2024. Overall, net earnings have demonstrated volatility but remain robust above the 2019 baseline across most years, except for 2020 and 2024 where lower figures were observed.

Net revenues

Net revenues exhibited a general upward trend across the examined periods. Beginning at approximately 26.5 billion USD in 2019, revenues decreased in 2020 to around 23.5 billion USD, consistent with the dip observed in net earnings. Thereafter, revenues steadily increased each year, reaching roughly 29.1 billion USD in 2021, 32.3 billion USD in 2022, 36.0 billion USD in 2023, and slightly higher at 36.2 billion USD in 2024. This steady revenue growth suggests a recovery and expansion of the business, notwithstanding the 2020 downturn.

Net profit margin

The net profit margin percentage closely mirrors the fluctuations seen in net earnings. It declined sharply from 13.58% in 2019 to 3.95% in 2020, indicating a significant reduction in profitability relative to sales. The margin rebounded substantially to 14.45% in 2021, the highest level in the period analyzed. Thereafter, it declined to 10.18% in 2022, increased to 11.46% in 2023, and then fell again to 10.4% in 2024. Despite some variability, the margin remained above 10% in the recent three years, implying a restoration of profitability after the 2020 dip but not reaching the peak margin of 2021.

The financial data presents notable fluctuations in net earnings attributable to Starbucks across the periods analyzed. Initially, net earnings were at 3,599,200 thousand USD in 2019, followed by a steep decline to 928,300 thousand USD in 2020. This significant reduction could be indicative of extraordinary challenges or market conditions impacting profitability during that year. Subsequently, a recovery is observed in 2021, with net earnings rising sharply to 4,199,300 thousand USD, followed by a slight decline in 2022 to 3,281,600 thousand USD. The upward trend resumes in 2023, reaching 4,124,500 thousand USD, before a modest decrease again in 2024 to 3,760,900 thousand USD.

Regarding shareholders’ deficit, the figures reflect a persistent negative equity situation throughout the periods. The deficit was -6,232,200 thousand USD in 2019, deepening further to -7,805,100 thousand USD in 2020, implying increased liabilities or reductions in equity during that time. A noticeable improvement occurs in 2021, where the deficit narrows to -5,321,200 thousand USD. Nevertheless, the shareholders' deficit worsens again in 2022 to -8,706,600 thousand USD and remains at elevated negative levels in 2023 and 2024, recorded at -7,994,800 thousand USD and -7,448,900 thousand USD respectively.

The trends suggest volatility in both profitability and equity position, with the company experiencing significant disruption in 2020 as reflected in earnings and shareholders’ deficit. While net earnings demonstrate recovery and growth following 2020, the shareholders’ deficit remains substantially negative and volatile, indicating ongoing structural financial challenges or strategic factors affecting equity.

Net Earnings Trend

Marked reduction in 2020 followed by recovery and moderate fluctuations through 2024.

Shareholders’ Deficit Trend

Consistently negative with deepening deficit in 2020 and 2022, partial improvement in 2021, but overall negative trend remains.

Financial Stability Insight

Despite restoring earnings after 2020, the sustained shareholders’ deficit highlights continued financial strain or capital structure issues.

Net Earnings Attributable to Starbucks

The net earnings exhibited notable fluctuations over the observed periods. Initially, earnings were strong at approximately 3.6 billion USD in 2019, followed by a sharp decline to around 928 million USD in 2020. This drop corresponds with a substantial external disruptive event impacting performance. Subsequently, earnings rebounded significantly to over 4.1 billion USD in 2021, then experienced some volatility with a decrease to 3.28 billion USD in 2022, a recovery to 4.12 billion USD in 2023, and a slight decline again to 3.76 billion USD in 2024. Overall, the trend shows resilience with recovery phases after the initial decline.

Total Assets

Total assets expanded dramatically from about 19.2 billion USD in 2019 to nearly 29.4 billion USD in 2020, representing a substantial increase. Assets continued to grow modestly to 31.4 billion USD in 2021 before decreasing slightly to 28.0 billion USD in 2022. Thereafter, assets rose again to approximately 29.4 billion USD in 2023 and further increased to 31.3 billion USD in 2024. The general trend suggests steady growth in asset base despite some intermediate contractions.

Return on Assets (ROA)

ROA shows significant volatility, dropping sharply from 18.73% in 2019 to 3.16% in 2020, aligning with the net earnings decline. This was followed by a recovery to 13.38% in 2021. ROA then showed a gradual overall downward trend, with values of 11.73% in 2022, a slight rise to 14.01% in 2023, and a decrease to 12.0% in 2024. The trend indicates a recovery in asset profitability post-2020 but with some variability and a slight decline in the most recent year.