STARBUCKS CORP

Note 17: Restructuring

In the fourth quarter of fiscal 2024, we announced our “Back to Starbucks” strategy, which was implemented with the goal to bring customers back to our stores and return to growth by revitalizing coffeehouses, enhancing the customer experience, and improving efficiency. As part of this strategy, during the second quarter of fiscal 2025, we further decided and announced our plan to restructure our support organization in an effort to operate more efficiently, increase accountability, reduce complexity, and drive better integration, which resulted in a reduction in our support partner workforce.

In the fourth quarter of fiscal 2025, we announced a restructuring plan involving the closure of coffeehouses and the further transformation of our support organization, as part of the Company’s “Back to Starbucks” strategy. We assessed our existing store portfolio with respect to both whether coffeehouses had a viable path to offering the physical environment consistent with the brand and a clear path to financial performance, and we closed, or plan to close, coffeehouses that did not meet these criteria.

During the first quarter of fiscal 2026,165 stores were closed and approximately $88.1 million was recorded to restructuring and impairments on our consolidated statement of earnings. This total consists of accelerated amortization of ROU lease assets and other lease exit costs, disposal and impairment of company-operated store assets, and employee severance, separation and other costs.

The table below presents the restructuring and impairment charges by reportable operating segment and Corporate and Other (in millions):

The table below presents the balance of liabilities related to the restructuring plan by major type of cost (in millions):

(1)The operating lease liability balance for total stores under the restructuring plan was $284.6 million as of December 28, 2025.

(2)The decrease was a result of Starbucks retail operations in China being classified as held for sale.

(3)“Other” primarily consists of updates to accrual estimates.

As of December 28, 2025, the majority of the remaining accrued employee separation costs are reflected in accrued payroll and benefits and the remaining accrued lease-related costs are reflected in the operating lease liability on the consolidated balance sheet.

The Company estimates that it will incur approximately $140 million during the remainder of fiscal 2026, primarily related to accelerated ROU lease asset amortization and other lease exit costs in our North America and International operating segments. We anticipate completion of the restructuring plan and remaining store closures within fiscal year 2026. The majority of the accrued liability balance as of December 28, 2025 relates to restructuring charges expected to be paid out by the end of fiscal year 2026.