STARBUCKS CORP

Previous wording

Certain statements contained herein are “forward-looking” statements within the meaning of applicable securities laws and regulations. Generally, these statements can be identified by the use of words such as “aim,” “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “feel,” “forecast,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “will,” “would,” and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. By their nature, forward-looking statements involve risks, uncertainties, and other factors (many beyond our control) that could cause our actual results to differ materially from our historical experience or from our current expectations or projections. Our forward-looking statements, and the risks and uncertainties related thereto, include, but are not limited to, those described under the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of our most recently filed 10-K and 10-Q and in other filings with the SEC, as well as:

Current wording

Certain statements contained herein are “forward-looking” statements within the meaning of applicable securities laws and regulations. Generally, these statements can be identified by the use of words such as “aim,” “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “feel,” “forecast,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “will,” “would,” and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. By their nature, forward-looking statements involve risks, uncertainties, and other factors (many beyond our control) that could cause our actual results to differ materially from our historical experience or from our current expectations or projections. Our forward-looking statements, and the risks and uncertainties related thereto, include, but are not limited to, those described under the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of our most recently filed 10-K and 10-Q and in other reports we file with the SEC, as well as, among others:

Previous wording

•our ability to preserve, grow, and leverage our brands, including the risk of negative responses by consumers (such as boycotts or negative publicity campaigns) or governmental actors (such as retaliatory legislative treatment) who object to certain actions taken or not taken by the Company, which responses could adversely affect our brand value;

Current wording

• our ability to preserve, grow, and leverage our brands, including the risk of negative responses by consumers (such as boycotts or negative publicity campaigns), governmental actors (such as retaliatory legislative treatment), or other third parties who object to certain actions taken or not taken by the Company, whose responses could adversely affect our brand value;

Previous wording

•the costs associated with, and the successful execution and effects of, our existing and any future business opportunities, expansions, initiatives, strategies, investments, and plans, including our Triple Shot Reinvention with Two Pumps Plan (“Reinvention”);

Current wording

• the costs and risks associated with, and the successful execution and effects of, our existing and any future business opportunities, expansions, initiatives, strategies, investments, and plans, including our“Back to Starbucks” plan;

Previous wording

•the acceptance of the Company’s products and changes in consumer preferences, consumption, or spending behavior and our ability to anticipate or react to them; shifts in demographic or health and wellness trends; or unfavorable consumer reaction to new products, platforms, reformulations, or other innovations;

Current wording

• changes in consumer preferences, demand, consumption, or spending behavior, including due to shifts in demographic or health and wellness trends, reduction in discretionary spending and price increases, and our ability to anticipate or react to these changes;

Previous wording

•the potential negative effects of incidents involving food or beverage-borne illnesses, tampering, adulteration, contamination, or mislabeling;

Current wording

• the potential negative effects of reported incidents involving food- or beverage-borne illnesses, tampering, adulteration, contamination, or mislabeling;

Previous wording

•our anticipated operating expenses, including our anticipated total capital expenditures;

Current wording

• our anticipated cash requirements and operating expenses, including our anticipated total capital expenditures;

Previous wording

•inherent risks of operating a global business including geopolitical instability, local labor policies and conditions, including labor strikes and work stoppages, protectionist trade policies, or economic or trade sanctions, and compliance with local trade practices and other regulations;

Current wording

• inherent risks of operating a global business, including changing conditions in our markets, local factors affecting store openings, protectionist trade or foreign investment policies, economic or trade sanctions, compliance with local laws and other regulations, and local labor policies and conditions, including labor strikes and work stoppages;

Previous wording

•the impact of adverse weather conditions or natural disasters;

Current wording

• the potential impact on our supply chain and operations of adverse weather conditions, natural disasters, or significant increases in logistics costs;

Previous wording

•unfavorable global or regional economic conditions and related economic slowdowns or recessions, low consumer confidence, high unemployment, weak credit or capital markets, budget deficits, burdensome government debt, austerity measures, higher interest rates, higher taxes, political instability, higher inflation, or deflation;

Current wording

• the impact of unfavorable global or regional economic conditions and related economic slowdowns or recessions, low consumer confidence, high unemployment, weak credit or capital markets, budget deficits, burdensome government debt, austerity measures, higher interest rates, higher taxes, international trade disputes, government restrictions, geopolitical instability, higher inflation, or deflation;

Previous wording

•the impact of substantial competition from new entrants, consolidations by competitors, and other competitive activities, such as pricing actions (including price reductions, promotions, discounting, couponing, or free goods), marketing, category expansion, product introductions, or entry or expansion in our geographic markets;

Current wording

• the impact of, and our ability to respond to, substantial competition from new entrants, consolidations by competitors, and other competitive activities, such as pricing actions (including price reductions, promotions, discounting, couponing, or free goods), marketing, category expansion, product introductions, or entry or expansion in our geographic markets;

Previous wording

•the impact of significant legal disputes and proceedings, or government investigations.

Current wording

• the impact or likelihood of significant legal disputes and proceedings or government investigations;

Previous wording

•potential negative effects of a material breach, failure, or corruption of our information technology systems or those of our direct and indirect business partners, suppliers, or third-party providers, or failure to comply with data protection laws;

Current wording

• potential negative effects of, and our ability to respond to, a material failure, inadequacy, or interruption of our information technology systems or those of our third-party business partners or service providers, or failure to comply with data protection laws; and

Previous wording

This information should be read in conjunction with the unaudited consolidated financial statements and the notes included in Item 1 of Part I of this 10-Q and the audited consolidated financial statements and notes, and Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), contained in the 10-K filed with the SEC on November 17, 2023.

Current wording

This information should be read in conjunction with the unaudited consolidated financial statements and the notes included in Item 1 of Part I of this 10-Q and the audited consolidated financial statements and notes, and Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), contained in the 10-K.

Previous wording

Starbucks is the premier roaster, marketer, and retailer of specialty coffee in the world, operating in 86 markets. As of June 30, 2024, Starbucks had more than 39,400 company-operated and licensed stores, an increase of 6% from the prior year. Additionally, we sell a variety of consumer-packaged goods, primarily through the Global Coffee Alliance established with Nestlé and other partnerships and joint ventures.

Current wording

Starbucks is the premier roaster, marketer, and retailer of specialty coffee globally, with a presence in 88 markets worldwide. As of December 29, 2024, Starbucks had more than 40,500 company-operated and licensed stores, an increase of 5% from the prior year. Additionally, we sell a variety of consumer-packaged goods, primarily through the Global Coffee Alliance established with Nestlé and other partnerships and joint ventures.

Previous wording

We believe our financial results and long-term growth model will continue to be driven by new store openings, comparable store sales growth, and operating margin management, underpinned by disciplined capital allocation. We believe these key operating metrics are useful to investors because management uses these metrics to assess the growth of our business and the effectiveness of our marketing and operational strategies. Throughout this MD&A, we commonly discuss the following key operating metrics:

Current wording

We believe our financial results and long-term growth model will continue to be driven by new store openings, comparable store sales, and operating margin management, underpinned by disciplined capital allocation. We believe these key operating metrics are useful to investors because management uses these metrics to assess the growth of our business and the effectiveness of our marketing and operational strategies. Throughout this MD&A, we commonly discuss the following key operating metrics:

Previous wording

Comparable store sales growth represents the percentage change in sales in one period from the same prior year period for company-operated stores open for 13 months or longer and excludes the impact of foreign currency translation. We analyze comparable store sales growth on a constant currency basis as this helps identify underlying business trends, without distortion from the effects of currency movements. Stores that are temporarily closed or operating at reduced hours remain in comparable store sales while stores identified for permanent closure have been removed.

Current wording

Comparable store sales represents the percentage change in sales in one period from the same prior year period for company-operated stores open for 13 months or longer and excludes the impact of foreign currency translation. We analyze comparable store sales on a constant currency basis as this helps identify underlying business trends, without distortion from the effects of currency movements. Stores that are temporarily closed or operating at reduced hours remain in comparable store sales while stores identified for permanent closure have been removed.

Previous wording

Starbucks results for the third quarter of fiscal 2024 reflect progress against our action plans to drive traffic to our stores and realized in-store and out-of-store efficiencies, which helped partially offset the impact of continued broader headwinds in a challenging global operating environment, including softening consumer sentiment, a pervasive inflationary environment, and disruptions due to multiple international conflicts. During the third quarter of fiscal 2024, consolidated net revenues decreased 1% to $9.1 billion compared to $9.2 billion in the third quarter of fiscal 2023, primarily driven by a decline in global comparable store sales and unfavorable foreign currency fluctuations, partially offset by incremental revenues from net new company-operated store openings over the past 12 months. During the quarter ended June 30, 2024, our global comparable store sales declined 3%, primarily driven by a 2% decline in the U.S. market and a 7% decline internationally. Consolidated operating margin decreased 60 basis points from the prior year to 16.7%, primarily driven by increased promotional activity, increased investments in store partner wages and benefits, and deleverage, partially offset by strategic pricing and in-store operational efficiencies. Further, our efficiency focus extended beyond our stores, and we realized meaningful out-of-store efficiencies during the quarter, largely within our supply chain.

Current wording

Starbucks results for the first quarter of fiscal 2025 reflect early progress toward our “Back to Starbucks” plan, as we focused on strategic actions, targeted investments, and operational efficiencies to drive gradual top-line improvements. During the first quarter of fiscal 2025, consolidated net revenues were flat compared to the first quarter of fiscal 2024, primarily driven by a decline in global comparable store sales and lower product and equipment sales to our licensees, partially offset by incremental revenues from net new company-operated store openings over the past 12 months. During the quarter ended December 29, 2024, our global comparable store sales declined 4%, primarily driven by a 4% decline in the U.S. market and a 4% decline internationally. Specific to the U.S. market, the decrease in comparable store sales was driven by an 8% decrease in comparable transactions, partially offset by a 4% increase in average ticket, primarily due to annualization of pricing, attach, and fewer discounts. These drivers more than offset mix shift into lower priced beverages, and the removal of the extra charge for non-dairy milk customizations. Consolidated operating margin contracted 390 basis points from the prior year to 11.9%, primarily driven by deleverage, investments in support of “Back to Starbucks,” including store partner wages, benefits, and hours, and the removal of the extra charge for non-dairy milk customizations. The contraction was partially offset by the annualization of pricing and supply chain efficiencies.

Previous wording

Product and distribution costs as a percentage of total net revenues decreased 110 basis points for the third quarter of fiscal 2024, primarily due to a reduction in supply chain costs (approximately 80 basis points).

Current wording

Product and distribution costs as a percentage of total net revenues decreased 80 basis points for the first quarter of fiscal 2025, primarily due to supply chain efficiencies (approximately 70 basis points).

Previous wording

Store operating expenses as a percentage of total net revenues increased 80 basis points for the first three quarters of fiscal 2024. Store operating expenses as a percentage of company-operated stores revenue increased 60 basis points, primarily due to increased investments in store partner wages and benefits (approximately 170 basis points) and increased promotional activity (approximately 80 basis points), partially offset by in-store operational efficiencies (approximately 190 basis points).

Current wording

Store operating expenses as a percentage of total net revenues increased 380 basis points for the first quarter of fiscal 2025. Store operating expenses as a percentage of company-operated stores revenue increased 430 basis points, primarily due to deleverage (approximately 260 basis points) and investments in support of “Back to Starbucks,” including store partner wages, benefits, and hours (approximately 190 basis points).

Previous wording

Depreciation and amortization expenses as a percentage of total net revenues increased 50 basis points, primarily due to deleverage.

Current wording

Depreciation and amortization expenses as a percentage of total net revenues increased 40 basis points, primarily due to deleverage.

Previous wording

Income from equity investees increased $19 million, primarily due to higher income from our North American Coffee Partnership joint venture.

Current wording

Income from equity investees decreased $9 million, primarily due to higher costs in our North American Coffee Partnership joint venture income.

Previous wording

The combination of these changes resulted in an overall decrease in operating margin of 60 basis points for the third quarter of fiscal 2024.

Current wording

The combination of these changes resulted in an overall decrease in operating margin of 390 basis points for the first quarter of fiscal 2025.

Previous wording

Interest income and other, net increased $45 million and interest expense increased $15 million, both primarily due to higher interest rates in the current year.

Current wording

Interest income and other, net, decreased $6 million, primarily due to higher foreign currency exchange losses and lower interest rates in the current year.

Previous wording

The effective tax rate for the quarter ended June 30, 2024 was 24.8% compared to 22.0% for the same period in fiscal 2023. The increase was primarily due to lapping the release of valuation allowances recorded against certain deferred tax assets of an international jurisdiction in the prior year (approximately 300 basis points).

Current wording

The effective tax rate for the quarter ended December 29, 2024 was 23.6% compared to 25.7% for the same period in fiscal 2024. The decrease was primarily due to the discrete impact of a tax status change for a certain foreign entity (approximately 300 basis points).

Previous wording

North America total net revenues for the first three quarters of fiscal 2024 increased $648 million, or 3%, primarily driven by net new company-operated store growth of 5%, or 488 stores, over the past 12 months ($584 million) and higher product and equipment sales to, and royalty revenues from, our licensees ($82 million). This growth was partially offset by a decline in comparable store sales ($29 million) driven by a 4% decrease in comparable transactions, partially offset by a 4% increase in average ticket, primarily due to annualization of pricing.

Current wording

North America total net revenues for the first quarter of fiscal 2025 decreased $49 million, or 1%, primarily due to a net 4% decrease in comparable store sales ($234 million), driven by an 8% decrease in comparable transactions, partially offset by a 4% increase in average ticket, primarily due to annualization of pricing, attach, and fewer discounts. These drivers more than offset mix shift into lower priced beverages, and the removal of the extra charge for non-dairy milk customizations. Also contributing to the decrease were lower product sales to, and royalty revenues from, our licensees ($35 million). These decreases were partially offset by net new company-operated store growth of 5%, or 527 stores, over the past 12 months ($230 million).

Previous wording

Channel Development total net revenues for the first three quarters of fiscal 2024 decreased $103 million, or 7%, primarily due to a decline in revenue in the Global Coffee Alliance ($99 million) following the sale of our Seattle’s Best Coffee brand to Nestlé in the second quarter of fiscal 2023 as well as product SKU optimization, and lower revenue in our global ready-to-drink business ($12 million).

Current wording

Channel Development total net revenues for the first quarter of fiscal 2025 decreased $12 million, or 3%, primarily due to a decline in revenue in the Global Coffee Alliance ($7 million) from product SKU optimization and lower revenue in our global ready-to-drink business ($3 million).

Previous wording

Channel Development operating income for the third quarter of fiscal 2024 increased 13% to $235 million, compared to $208 million in the third quarter of fiscal 2023. Operating margin increased 740 basis points to 53.7%, primarily driven by mix shift (approximately 350 basis points), lower product costs related to the Global Coffee Alliance (approximately 270 basis points), and strength in our North American Coffee Partnership joint venture income (approximately 90 basis points).

Current wording

Channel Development operating income for the first quarter of fiscal 2025 decreased 1% to $208 million, compared to $210 million in the first quarter of fiscal 2024. Operating margin expanded 90 basis points to 47.7%, primarily driven by mix shift (approximately 180 basis points), and lower product costs related to the Global Coffee Alliance (approximately 80 basis points), partially offset by higher costs in our North American Coffee Partnership joint venture income (approximately 170 basis points).

Previous wording

Our cash and investments were $3.7 billion as of June 30, 2024 and $4.2 billion as of October 1, 2023. We actively manage our cash and investments in order to internally fund operating needs, make scheduled interest and principal payments on our borrowings, fund acquisitions, and return cash to shareholders through common stock cash dividend payments and share repurchases. Our investment portfolio primarily includes highly liquid available-for-sale securities, including corporate debt securities, government treasury securities (domestic and foreign), and commercial paper, as well as principal-protected structured deposits. As of June 30, 2024, approximately $2.0 billion of cash and short-term investments were held in foreign subsidiaries.

Current wording

Our cash and investments were $4.2 billion as of December 29, 2024 and $3.8 billion as of September 29, 2024. We actively manage our cash and investments in order to internally fund operating needs, make scheduled interest and principal payments on our borrowings, fund acquisitions, and return cash to shareholders through common stock cash dividend payments and share repurchases. Our investment portfolio primarily includes highly liquid available-for-sale securities, including corporate debt securities and government treasury securities (domestic and foreign), as well as principal-protected structured deposits. As of December 29, 2024, approximately $2.1 billion of cash and short-term investments were held in foreign subsidiaries.

Previous wording

Under our commercial paper program, we may issue unsecured commercial paper notes up to a maximum aggregate amount outstanding at any time of $3.0 billion, with individual maturities that may vary but not exceed 397 days from the date of issue. Amounts outstanding under the commercial paper program are required to be backstopped by available commitments under our 2021 credit facility. The proceeds from borrowings under our commercial paper program may be used for working capital needs, capital expenditures, and other corporate purposes, including, but not limited to, business expansion, payment of cash dividends on our common stock, and share repurchases. No amounts were outstanding under our commercial paper program as of June 30, 2024 and October 1, 2023. Our total available contractual borrowing capacity for general corporate purposes was $3.0 billion as of the end of our third quarter of fiscal 2024.

Current wording

Under our commercial paper program, we may issue unsecured commercial paper notes up to a maximum aggregate amount outstanding at any time of $3.0 billion, with individual maturities that may vary but not exceed 397 days from the date of issue. Amounts outstanding under the commercial paper program are required to be backstopped by available commitments under our 2021 credit facility. The proceeds from borrowings under our commercial paper program may be used for working capital needs, capital expenditures, and other corporate purposes, including, but not limited to, business expansion, payment of cash dividends on our common stock, and share repurchases. We had no borrowings outstanding under our commercial paper program as of December 29, 2024 and September 29, 2024. Our total available contractual borrowing capacity for general corporate purposes was $3.0 billion as of the end of our first quarter of fiscal 2025.

Previous wording

•A ¥5.0 billion, or $31.1 million, credit facility is currently set to mature on December 30, 2024. Borrowings under this credit facility are subject to terms defined within the facility and will bear interest at a variable rate based on TIBOR plus an applicable margin of 0.400%.

Current wording

•A ¥5.0 billion, or $31.6 million, credit facility is currently set to mature on December 30, 2025. Borrowings under this credit facility are subject to terms defined within the facility and will bear interest at a variable rate based on TIBOR plus an applicable margin of 0.400%.

Previous wording

•A ¥10.0 billion, or $62.2 million, credit facility is currently set to mature on March 27, 2025. Borrowings under this credit facility are subject to terms defined within the facility and will bear interest at a variable rate based on TIBOR plus an applicable margin of 0.300%.

Current wording

•A ¥10.0 billion, or $63.3 million, credit facility is currently set to mature on March 27, 2025. Borrowings under this credit facility are subject to terms defined within the facility and will bear interest at a variable rate based on TIBOR plus an applicable margin of 0.300%.

Previous wording

As of June 30, 2024, we had ¥2.0 billion, or $12.4 million, of borrowings outstanding under these credit facilities. As of October 1, 2023, we had ¥5.0 billion, or $33.5 million, of borrowings outstanding under these credit facilities.

Current wording

As of December 29, 2024 and September 29, 2024, we had no borrowings outstanding under these credit facilities.

Previous wording

We regularly review our cash positions and our determination of partial indefinite reinvestment of foreign earnings. In the event we determine that all or another portion of such foreign earnings are no longer indefinitely reinvested, we may be subject to additional foreign withholding taxes, which could be material. Any foreign earnings that are not indefinitely reinvested may be repatriated at management’s discretion. In anticipation of repatriation of current year earnings of certain foreign subsidiaries, we accrued approximately $16 million for foreign withholding taxes during the first three quarters of fiscal year 2024.

Current wording

We regularly review our cash positions and our determination of partial indefinite reinvestment of foreign earnings. In the event we determine that all or another portion of such foreign earnings are no longer indefinitely reinvested, we may be subject to additional foreign withholding taxes, which could be material. Any foreign earnings that are not indefinitely reinvested may be repatriated at management’s discretion.

Previous wording

During the third quarter of fiscal 2024, our Board of Directors approved a quarterly cash dividend to shareholders of $0.57 per share to be paid on August 30, 2024 to shareholders of record as of the close of business on August 16, 2024.

Current wording

During the first quarter of fiscal 2025, our Board of Directors approved a quarterly cash dividend to shareholders of $0.61 per share to be paid on February 28, 2025 to shareholders of record as of the close of business on February 14, 2025.

Previous wording

During the three quarters ended June 30, 2024, we repurchased 12.8 million shares of common stock for $1,250.1 million on the open market. As of June 30, 2024, 29.8 million shares remained available for repurchase under current authorizations.

Current wording

During the quarter ended December 29, 2024, we made no common stock share repurchases. As of December 29, 2024, 29.8 million shares remained available for repurchase under current authorizations.

Previous wording

Other than normal operating expenses, cash requirements for the remainder of fiscal 2024 are expected to consist primarily of capital expenditures for investments in our new and existing stores, our supply chain, and corporate facilities. Total capital expenditures for fiscal 2024 are expected to be approximately $3.0 billion.

Current wording

Other than normal operating expenses, cash requirements for the remainder of fiscal 2025 are expected to consist primarily of capital expenditures for investments in our new and existing stores, our supply chain, and corporate facilities. Total capital expenditures for fiscal 2025 are expected to be reasonably consistent with fiscal 2024.

Previous wording

In the MD&A included in the 10-K, we disclosed that we had $33.9 billion of current and long-term material cash requirements as of October 1, 2023. There have been no material changes to our material cash requirements during the period covered by this 10-Q outside of the normal course of our business.

Current wording

In the MD&A included in the 10-K, we disclosed that we had $35.6 billion of current and long-term material cash requirements as of September 29, 2024. There have been no material changes to our material cash requirements during the period covered by this 10-Q outside of the normal course of our business.

Previous wording

Net cash used in investing activities totaled $1.8 billion for the first three quarters of fiscal 2024, compared to $1.4 billion for the same period in fiscal 2023. The change was primarily due to an increase in capital expenditures, purchases of investments, and lapping the proceeds from sale of assets from the prior year sale of Seattle’s Best Coffee brand to Nestlé, partially offset by an increase in maturities and calls of investments.

Current wording

Net cash used in investing activities totaled $855 million for the first quarter of fiscal 2025, compared to $569 million for the same period in fiscal 2024. The change was primarily due to the acquisition of 23.5 Degrees Topco Limited, a net decrease of $166 million in maturities and calls of investments, primarily structured deposit investments, and a net increase of $97 million in capital expenditures. These cash uses were partially offset by a net decrease of $151 million in purchases of investments, primarily structured deposit investments.

Previous wording

Net cash used in financing activities for the first three quarters of fiscal 2024 totaled $3.1 billion, compared to $2.1 billion for the same period in fiscal 2023. The change was primarily due to an increase in repayments of debt and an increase in share repurchase activities, partially offset by net proceeds from issuances of debt.

Current wording

Net cash used in financing activities for the first quarter of fiscal 2025 totaled $755 million, compared to $2.4 billion for the same period in fiscal 2024. The change was primarily due to no current year share repurchases of our common stock and no current year repayments of long-term debt compared to repurchases and repayments in the prior year. These cash uses were partially offset by a decrease of $300 million in proceeds from issuances of commercial paper.

Previous wording

Commodity price risk represents our primary market risk, generated by our purchases of green coffee and dairy products, among other items. We purchase, roast, and sell high-quality arabica coffee and related products, and risk arises from the price volatility of green coffee. In addition to coffee, we also purchase significant amounts of dairy products to support the needs of our company-operated stores. The price and availability of these commodities directly impact our results of operations, and we expect commodity prices, particularly coffee, to impact future results of operations. For additional details, see Product Supply in Part 1, Item 1 of the 10-K, as well as Risk Factors in Part I, Item 1A of the 10-K.

Current wording

Commodity price risk represents our primary market risk, generated by our purchases of green coffee and dairy products, among other items. We purchase, roast, and sell high-quality arabica coffee and related products, and risk arises from the price volatility of green coffee. In addition to coffee, we also purchase significant amounts of dairy products to support the needs of our company-operated stores. The price and availability of these commodities, including recent sustained increases in green coffee prices, directly impact our results of operations, and we expect commodity prices, particularly coffee, to continue to impact future results of operations. For additional details, see Product Supply in Part 1, Item 1 of the 10-K, as well as Risk Factors in Part I, Item 1A of the 10-K.