STARBUCKS CORP

Note 18: Subsequent Event

On March 30, 2026, following completion of the second fiscal quarter of 2026, we closed the previously announced divestiture of 60% of our Starbucks retail operations in China to Boyu Capital, our joint venture partner, for total consideration of $3.1 billion. Starbucks retained a 40% interest in the joint venture and continues to own and license the Starbucks brand and intellectual property to the new entity. The partial divestiture resulted in the conversion of 7,991 company-operated stores to licensed stores within our International segment. We currently plan to use the proceeds for debt reduction, strengthening our balance sheet, and allowing us to execute our long-term growth strategy with greater financial flexibility. As of March 29, 2026, all assets and liabilities related to the retail operations in China were classified as held for sale within the Company’s Consolidated Balance Sheets. See Note 2, Acquisitions and Divestitures, for further discussion. While the Company is still evaluating the effects the transaction will have on its fiscal third quarter financial results, we anticipate recognizing a material pre-tax gain on the sale. Following the closing, we transitioned from recording revenues and expenses of the disposal group to recording our share of income from the joint venture, recognized as income from equity investees under the equity method of accounting, and recording revenues related to product sales and royalties. The disposal group was deconsolidated from our financial statements and will be reported as part of our licensed portfolio in the third quarter of fiscal 2026.