STARBUCKS CORP
For the period ended Mar 29, 2026. Filed Apr 28, 2026.
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Mar 29, 2026 · Filed Apr 28, 2026
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Income Taxes
Note 13: Income Taxes
The effective tax rate for the quarter ended March 29, 2026, was 29.8% compared to 23.5% for the same period in fiscal 2025. The increase was primarily due to the impact of reorganizing certain entities in China (approximately 280 basis points), the $8 million discrete increase to the change in indefinite reinvestment assertions as a result of classifying the Starbucks retail operations in China as held for sale in the first quarter of fiscal 2026 (approximately 110 basis points), and the effect of higher pre-tax earnings and the proportionate impacts from certain permanent differences and discrete items.
The effective tax rate for the two quarters ended March 29, 2026, was 46.1% compared to 23.6% for the same period in fiscal 2025. The increase was primarily due to the $273 million discrete impact of changes in indefinite reinvestment assertions as a result of classifying Starbucks retail operations in China as held for sale in the first quarter of fiscal 2026 (approximately 1,830 basis points), lapping the discrete impact of a tax status change for a certain foreign entity in the first quarter of fiscal 2025 (approximately 200 basis points), and the impact of reorganizing certain entities in China (approximately 130 basis points).
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