STARBUCKS CORP

Note 17: Restructuring and Impairments

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 the Company’s “Back to Starbucks” strategy, the following restructuring plans were approved.

Fiscal 2025 Restructuring Plans

In the second quarter of fiscal 2025, we announced a fiscal 2025 restructuring 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 an additional fiscal 2025 restructuring plan involving the closure of coffeehouses and the further transformation of our support organization. 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 quarter and three quarters ended June 28, 2026,20 and 247 stores, respectively, were closed, and approximately $10.0 million and $115.9 million, respectively, was recorded to restructuring and impairments on our consolidated statement of earnings related to our fiscal 2025 restructuring plans. 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.

During the quarter and three quarters ended June 29, 2025, we recognized pre-tax restructuring charges of $20.8 million and $137.0 million, respectively, primarily associated with partner severance costs. These costs were recorded to restructuring and impairments on our consolidated statement of earnings.

Fiscal 2026 Restructuring Plans

In the second quarter of fiscal 2026, management approved a fiscal 2026 restructuring plan to relocate certain functions of our support organization to an additional office in Nashville, Tennessee, with the intention to establish a more strategic presence in the Southeast region of the United States.

In the third quarter of fiscal 2026, we announced an additional fiscal 2026 restructuring plan focused on further transformation of our global support organization and non-retail facilities, as well as reducing the future operational complexity of our Starbucks Reserve and Roastery locations resulting in a reassessment and impairment of the associated asset group.

During the quarter and three quarters ended June 28, 2026, we recognized pre-tax restructuring charges of $292.6 million and $299.9 million, respectively, to restructuring and impairments on our consolidated statement of earnings related to our fiscal 2026 restructuring plans. This total consists of disposal and impairment of company-operated store assets primarily associated with the impairment of Starbucks Reserve and Roastery store locations, and employee severance, separation and other costs.

The tables below present the restructuring and impairment charges by fiscal year restructuring plans, reportable operating segment, and Corporate and Other (in millions):

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

(1)The operating lease liability balances for total stores under the fiscal 2025 and fiscal 2026 restructuring plans were $183.1 million and $6.9 million, respectively, as of June 28, 2026.

(2)The decrease was a result of divesting Starbucks retail operations in China during the third quarter of fiscal 2026 .

(3)“Other” primarily consists of updates to accrual estimates and adjustments for non-cash charges.

As of June 28, 2026, 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.

We anticipate completion of both the fiscal 2025 and fiscal 2026 restructuring plans and remaining store closures by the first half of fiscal 2027. The Company estimates that it will incur approximately $120 million and $110 million relating to the fiscal 2025 and fiscal 2026 restructuring plans, respectively, during the remainder of fiscal 2026 and first half of fiscal 2027, primarily related to accelerated ROU lease asset amortization in our North America operating segment, impairment charges, and partner severance costs in our International operating segment. The majority of the accrued liability balance as of June 28, 2026, relates to restructuring charges expected to be paid out by the end of fiscal year 2026.