Starbucks Corporation

Strong Q3 execution; margin & EPS leap (good) - Consolidated net revenues: $9.3B, down 1% YoY (mainly accounting impact from China deconsolidation to a licensing/joint-venture structure). - Global comps: +7.9%, sequentially improving vs. Q2; transaction growth >4% (ticket growth supplemented the comp). - Operating margin: 14.4%, +430 bps YoY (second consecutive quarter of margin expansion). - EPS: $0.85, +70% YoY (step toward “earnings recovery”). - North America led: U.S. comps +7.9%; Canada comps stronger; international company-operated comps +5.7% with Japan and the U.K. cited.

“Back to Starbucks” operating model showing measurable progress (good / standout) - Green Apron Service (1-year anniversary in August) is framed as the operating foundation: ownership/accountability returned to store leaders; tools/hours/standards/coaching improved. - Throughput/service improvements: Smart Queue targeting faster, more accurate ordering; target service times hit across access points even with transaction growth. - Food availability: ~99%, ~10 points better vs. 1 year ago. - Store readiness/ranking: simplified “Grow” system shows 2/3 of company stores at 4+ shots, up >5 points QoQ and >40 points since launch. - Leader stability: North America Coffee House leaders enrolled 2+ years up ~7 pts YoY (management stability linked to store performance). - Incentives: launched Best of Starbucks Reward for Green Apron partners (up to $300/quarter tied to performance).

Brand & demand momentum—especially summer refreshers & Starbucks Rewards (good) - Brand metrics: affinity/consideration/purchase intent at 5-year highs; “customer connection” improved significantly YoY. - Starbucks Rewards (U.S.): 35.8M 90-day active members; program launched 4 months ago and is already seeing level-ups (Green→Gold→Reserve). - Rewards driving behavior: Free Mod Monday—1 in 3 members who tried a new modification reordered later. - Innovation strength: Refreshers delivered double-digit YoY revenue growth in the U.S.; customizable energy refreshers (e.g., Blue Coconut, Mango) expanded occasions. - Sizable opportunity in “afternoon daypart”: management reiterated strategy to win morning and build afternoon; early indications of routinization via refresher + food occasions.