Here are 1-2 brief analogies to describe Starbucks (SBUX):

• Starbucks is like the McDonald's of premium coffee.
• Starbucks is like the Apple Store for coffee.

• Coffee Beverages: A diverse selection of hot and cold espresso-based drinks, brewed coffees, and cold brews.
• Non-Coffee Beverages: Various hot and iced teas, refreshers, hot chocolate, and other specialty drinks.
• Food Items: An assortment of pastries, breakfast items, sandwiches, and other ready-to-eat meals and snacks.
• Packaged Coffee & Tea: Whole bean and ground coffee, along with tea bags and loose-leaf tea, for home consumption.
• Merchandise: Branded mugs, tumblers, and coffee-making accessories sold in their retail stores.
• Starbucks Rewards Program (Loyalty Service): A customer loyalty program offering personalized offers, mobile ordering, and free items.

Starbucks (SBUX) Major Customers

Starbucks (SBUX) primarily sells its products and services directly to individual consumers through its vast network of company-operated and licensed stores worldwide. While Starbucks does engage in some wholesale and licensing activities (e.g., selling packaged coffee to grocery stores or K-Cups), the overwhelming majority of its revenue is generated from direct sales to individuals.

Based on this direct-to-consumer model, here are three categories of customers that Starbucks serves:

• Routine Commuters & Regulars: This category encompasses individuals who integrate Starbucks into their daily or weekly routine. They often visit for their morning coffee on the way to work, during a lunch break, or as a consistent afternoon pick-me-up. These customers prioritize convenience, speed, and consistency, often utilizing the mobile app for ordering ahead and participating in the Starbucks Rewards loyalty program. They value the familiarity and reliability of their preferred beverages.
• Social & Experiential Seekers: These customers view Starbucks as a "third place" – a space away from home and work to socialize, relax, study, or conduct informal meetings. They are drawn by the comfortable ambiance, free Wi-Fi, and the opportunity to connect with others or enjoy a moment of solitude outside their usual environment. For this group, the overall experience and atmosphere of the cafe are as important as the coffee itself.
• Occasional Indulgers & Trend Explorers: This category includes customers who visit Starbucks less frequently, often for a treat, a special occasion, or to try seasonal and new menu items. They might be drawn by marketing campaigns for limited-time offers (like holiday drinks), unique flavor innovations, or the desire for a premium coffee experience when they choose to indulge. They may not be loyal daily customers but appreciate the perceived quality and variety that Starbucks offers for an occasional splurge.

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Brian Niccol, Chairman and Chief Executive Officer

Brian Niccol joined Starbucks as Chairman and Chief Executive Officer on September 9, 2024. He previously served as the Chief Executive Officer of Chipotle since March 2018, and Chairman since March 2020, where he more than doubled the business. Before Chipotle, Mr. Niccol was the Chief Executive of Taco Bell and held leadership roles at Pizza Hut, both divisions of Yum! Brands. He began his career in brand management at Procter and Gamble.

Cathy Smith, Executive Vice President, Chief Financial Officer

Cathy Smith is the new Chief Financial Officer at Starbucks, joining in March 2025. She brings extensive experience in retail, global operations, and turnaround success. Prior to Starbucks, she served as the CFO of Nordstrom since 2023 and has also held CFO roles at Target and Walmart International.

Brady Brewer, CEO, Starbucks International

Brady Brewer oversees teams across Asia Pacific, EMEA, Japan, and LAC, as well as the company's international licensed partners. He has over 20 years of experience with Starbucks, serving in various global, regional, and market-specific roles, including senior vice president in Starbucks Asia Pacific, chief operating officer of Starbucks Japan, and most recently as EVP, chief marketing officer.

Mike Grams, Executive Vice President, Chief Operating Officer

Mike Grams was appointed Executive Vice President, Chief Operating Officer, and in this role, he oversees global coffeehouse development and global supply chain. He was previously the EVP, North America Chief Stores Officer.

Meredith Sandland, Executive Vice President, Chief Development Officer

Meredith Sandland serves as the Executive Vice President, Chief Development Officer, reporting to the Chief Operating Officer.

The emergence of highly automated and AI-driven coffee establishments presents a clear emerging threat. These new competitors leverage robotic baristas and streamlined, smaller-footprint operations to offer coffee with potentially lower labor costs, increased speed, and consistent quality. While still in early stages of scaling, this model directly challenges Starbucks' traditional labor-intensive and real estate-heavy operational model, particularly in high-traffic urban areas where efficiency and speed are paramount. Should these automated concepts achieve significant scale and consumer adoption, they could erode Starbucks' market share by offering a comparable product experience at a potentially lower price point or with greater convenience.

Starbucks Corporation (SBUX) operates in several large addressable markets through its diverse product and service offerings. The main products and services include various coffee beverages, ready-to-drink (RTD) coffee products, an extensive food menu (primarily baked goods and other prepared items), and the overall cafe experience.

Starbucks (SBUX) is strategically positioning itself for future revenue growth over the next two to three years by focusing on several key drivers:

1. Accelerated International Expansion, particularly in China: Starbucks plans significant growth in its second-largest market, China. Through a new joint venture with Boyu Capital, expected to finalize in Q2 fiscal year 2026, the company aims to expand its store count from approximately 8,000 to as many as 20,000 over time. This partnership is designed to accelerate growth into smaller cities and new regions across China. The international segment, including China, has already shown strong transaction growth.

2. Product Innovation with a Focus on Cold Beverages and New Platforms: To combat recent sales slumps, Starbucks is introducing innovative beverage offerings, with a particular emphasis on cold beverages. New options like protein cold foam and coconut water cold brew are designed to reignite customer interest and boost revenue. The company also planned to launch three new beverage platforms targeted at the afternoon daypart and occasional customers, further diversifying its menu. Seasonal offerings continue to be strong sales drivers.

3. "Back to Starbucks" Strategy for Enhanced Customer Experience and Operational Efficiency: This comprehensive turnaround plan, initiated in late 2024 and continuing through 2025 and into 2026, aims to revitalize the core business. Key elements include prioritizing speed and service, optimizing staffing, and improving the overall coffeehouse atmosphere. Investments in technology, such as a new in-store prioritization algorithm, and initiatives like the Green Apron Service are being implemented to reduce wait times, enhance service speed, and improve customer satisfaction.

4. Growth of the Starbucks Rewards Program and Broader Customer Engagement: Expanding and leveraging its loyalty program is a crucial driver. Starbucks Rewards membership and customer spend have shown consistent growth. The company is also broadening its marketing efforts to attract a wider customer base beyond its existing Rewards members, particularly in key dayparts like the morning.

5. Strategic Store Growth and Optimization in Existing Markets: Beyond its aggressive expansion in China, Starbucks is also focused on disciplined growth and optimization within its established markets. The company is executing a program to "uplift" over 1,000 stores across North America by the end of calendar 2026, which includes renovations and the introduction of new store prototypes with lower build costs. This strategy aims to strengthen the overall store portfolio and re-establish Starbucks as a community coffeehouse.

Share Repurchases

• In the fall of 2021, Starbucks authorized $20 billion for dividends and share repurchases over a three-year period.
• The company's share repurchase program was suspended in April 2022 by Howard Schultz but subsequently resumed in fiscal Q1 2023.
• Starbucks repurchased approximately $4.013 billion in shares in 2022, $984.4 million in 2023, and $1.267 billion in 2024.

Share Issuance

• Starbucks has generally seen a decrease in its outstanding share count over the last several years, indicating that any share issuances have been offset by repurchases.

Outbound Investments

• In October 2024, Starbucks announced strategic investments in two new coffee innovation farms located in Guatemala and Costa Rica, with plans for future farm investments in Africa and Asia.

Capital Expenditures

• Capital expenditures were $1.47 billion in 2021, $1.841 billion in 2022, $2.334 billion in 2023, and $2.777 billion in 2024.
• Expected capital expenditures for fiscal year 2025 are $2.499 billion, with an anticipated average of $2.812 billion annually over the next five fiscal years.
• The primary focus of capital expenditures includes investments in existing U.S. stores for efficiency and capacity, accelerating new store growth and diversifying formats, enhancing technology for operational efficiency and customer experience, and improving the supply chain and "Greener Stores" initiatives.