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Acquisitions and Divestitures | 9 Months Ended
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Jun. 28, 2026
Business Combination [Abstract] |
Acquisitions and Divestitures | Acquisitions and Divestitures Fiscal 2026 On March 30, 2026, we completed the divestiture of Starbucks retail operations in China (“the disposal group”), which marked a significant milestone in the Company’s long-term strategy to unlock sustainable, disciplined growth in China. Under the agreement, Boyu Capital acquired a 60% interest in Starbucks retail operations in China based on a cash-free, debt-free mutually agreed-upon total enterprise value of approximately $4 billion. The transaction was partially financed with debt issued by the newly formed joint venture and w e received total consideration with respect to the transaction of $3.1 billion, inclusive of our share of the debt proceeds. Starbucks retained a 40% interest of approximately $1.2 billion, accounted for under the equity method of accounting. Our carrying value of the retained investment includes the impact of debt raised by the joint venture in conjunction with the transaction. The Company derecognized net assets with a carrying value of $3.4 billion, and reclassified approximately $282.8 million of cumulative translation adjustment (“CTA”) losses and net investment hedge losses of $99.7 million from accumulated other comprehensive income into earnings. As a result, we recognized a pre-tax gain of $536.3 million, which was included in net gain resulting from divestiture of certain operations on our consolidated statements of earnings. Total incremental income tax expense associated with the divestiture gain is approximately $198.6 million, of which approximately $147.8 million was recognized in the third quarter of fiscal 2026, with the remainder expected to be recognized in the fourth quarter of fiscal 2026. The income tax expense is a component of the estimated annual effective tax rate and, accordingly, is recognized in proportion to year-to-date ordinary pre-tax income. We also recognized transaction costs of approximately $44.1 million and $73.8 million for the quarter and three quarters ended June 28, 2026, respectively. Upon completion of the divestiture, the disposal group was deconsolidated from our financial statements and 7,991 company-operated stores previously included in the disposal group were converted to licensed stores within our International segment. We will continue to own and license the Starbucks brand and intellectual property to the joint venture. 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 to, and royalty revenues from, the joint venture. For the third quarter of fiscal 2026, revenues generated from the joint venture were $52.5 million and related product and distribution costs were $18.5 million. Accounts receivable from the joint venture as of June 28, 2026, was $30.7 million, on our consolidated balance sheets, primarily related to product sales to, and royalty revenues from, the joint venture. As of June 28, 2026, the carrying value of this investment was $1.2 billion. Fiscal 2025 On October 14, 2024, we acquired a 100% ownership interest in 23.5 Degrees Topco Limited, a U.K. licensed business partner, to expand our portfolio of company-operated stores and enhance the coffeehouse experience for customers. The acquisition converted 113 licensed stores to company-operated stores within our International operating segment. The assets acquired and liabilities assumed are included in our International operating segment. Assets acquired primarily include operating lease ROU assets, intangible assets, goodwill, and property, plant and equipment. The intangible assets acquired as part of this transaction include reacquired licensee agreement rights, which will be amortized over the estimated useful life. In addition, we assumed various liabilities, primarily consisting of operating lease liabilities. The transaction was not material to our consolidated financial statements.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/205-20/tableOfContent Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent + Details
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