Starbucks Corporation

Q3 performance: momentum + margin expansion (good) - Consolidated net revenues: $9.3B, -1% YoY (mainly due to China deconsolidation into a license/JV structure). - Global comps: +7.9%, sequential improvement (implies underlying demand improvement despite reported revenue dip). - Operating margin: 14.4%, +430 bps YoY; EPS: $0.85, +70% YoY. - North America leadership: U.S. comps +7.9% (transactions +4.2%, ticket +3.6%), Canada stronger; U.S. margin growth milestone (first time since Q1 FY24 North America operating margin grew YoY).

Back to Starbucks plan: operating execution driving comps and service (good/surprising) - Green Apron Service: now ~1 year live; framed as “operating foundation” with stronger routines, staffing, coaching, accountability. - Throughput/service gains: “Smart Queue” improved; achieved target service times across access points in Q3. - Food availability: ~99%, ~10 pts higher vs. a year ago. - Coffeehouse leadership stability: % enrolled 2+ years improved about 7 pts YoY in North America (management emphasized store leader stability correlates with store performance). - U.S. coffeehouse maturity: 2/3 of company-operated stores are at 4+ shots, +5 pts QoQ and +40 pts since last October. - Payoff sign: Pull-through seen as transactions + ticket both contributing, with refreshers also helping (reinforced as an innovation engine).

Brand + Rewards + menu innovation: demand durability (good) - Brand metrics: affinity, consideration, purchase intent at 5-year highs; customer connection improving significantly YoY. - Starbucks Rewards: 35.8M U.S. 90-day active members; new program launched ~4 months prior and already showing level-ups (Green→Gold→Reserve). - Value/engagement: “Free Mod Monday”—1 in 3 members who tried a new modification reordered it later. - Innovation highlights: refreshers delivering double-digit YoY revenue growth in the U.S.; S’mores LTO strongest summer coffee launch for several years (tracking particularly well with Gen Z).