Starbucks Corp. (NASDAQ:SBUX)

The analysis of the annual financial data reveals several significant trends related to operating profitability, invested capital, cost of capital, and economic profit over the observed periods.

Net Operating Profit After Taxes (NOPAT)

There is notable volatility in NOPAT figures over the years. Starting from approximately 1.48 billion USD in 2020, NOPAT surged dramatically to about 4.63 billion USD in 2021. It then decreased to around 3.73 billion USD in 2022, before increasing again to roughly 4.60 billion USD in 2023. The following year saw a slight reduction to approximately 4.41 billion USD, and in the most recent period, a considerable decline to about 2.45 billion USD is observed. This fluctuation indicates varying operational efficiency and profitability levels across the years, with the last period showing a significant downturn.

Cost of Capital

The cost of capital has remained relatively stable across the periods, fluctuating slightly within a range from 12.77% to 13.32%. The marginal changes suggest consistent financial market conditions or risk profile concerning the company's funding costs.

Invested Capital

Invested capital demonstrates some variation but generally reflects a stable to moderately increasing trend. It was approximately 22.97 billion USD in 2020, reaching a peak around 23.68 billion USD in 2021, decreasing to about 20.46 billion USD in 2022, and then increasing steadily to approximately 24.01 billion USD by the latest period in 2025. This indicates ongoing investment activity possibly in fixed assets, working capital, or other long-term resources, with a notable dip in 2022.

Economic Profit

Economic profit, which accounts for the cost of capital, shows significant fluctuations. It was negative in 2020 at approximately -1.46 billion USD, turning positive and increasing substantially to about 1.49 billion USD in 2021. It then declined to around 1.03 billion USD in 2022, improved slightly in 2023 to approximately 1.65 billion USD, and decreased again to 1.33 billion USD in 2024. The latest figure reflects a return to negative economic profit of about -612 million USD in 2025. This pattern suggests that the company generated value above its cost of capital during most periods except for the first and last years in the dataset, indicating challenges in sustaining economic profitability in the most recent period.

In summary, while the company has demonstrated strong NOPAT and generally positive economic profits in most years, the last year shows a marked decline in both operating profit and economic profit. Invested capital tends to increase over time, and the cost of capital remains steady. These dynamics suggest periods of operational success interspersed with challenges that impacted overall value creation most recently.

The financial data reveals notable fluctuations in Starbucks Corp.'s profitability over the examined periods. Both net earnings attributable to the company and net operating profit after taxes (NOPAT) demonstrate cyclical trends with periods of significant increases followed by declines.

Net Earnings Attributable to Starbucks

The net earnings show a strong increase from approximately 928 million US dollars in late 2020 to over 4.1 billion in early 2021. Following this peak, there is a decline to around 3.28 billion in late 2022, then a rebound to about 4.12 billion in early 2023. Subsequently, net earnings decrease again to approximately 3.76 billion and further decline to 1.86 billion by late 2025. This pattern suggests volatility in profitability with significant year-to-year variation.

Net Operating Profit After Taxes (NOPAT)

NOPAT trends closely parallel net earnings, starting at about 1.48 billion in 2020 and increasing sharply to over 4.62 billion in 2021. It then decreases to roughly 3.73 billion in 2022 before rising to nearly 4.60 billion in 2023. After this, NOPAT slightly declines to about 4.41 billion in 2024 and experiences a substantial drop to 2.45 billion by 2025. This indicates that operating efficiency and tax-related impacts also varied significantly over the time horizon, affecting profitability.

Overall, the data suggests that the company experienced pronounced growth in profitability around 2021 and 2023, but these gains were not consistently sustained into later periods. The declines toward 2025 could indicate emerging operational or market challenges impacting earnings and operating profit. This volatility warrants closer examination of underlying drivers such as cost management, revenue fluctuations, and external economic conditions influencing performance.

The analysis of the tax-related financial data displays variable trends in both income tax expense and cash operating taxes over the observed periods.

Income Tax Expense

The income tax expense demonstrates a fluctuating pattern with an initial value of 239,700 thousand US dollars, substantially rising to a peak of 1,157,600 thousand US dollars by the second period. This peak is followed by a decrease to 948,500 thousand US dollars, then an increase again to 1,277,200 thousand US dollars, maintaining a relatively high level in the next period at 1,207,300 thousand US dollars before declining sharply to 650,600 thousand US dollars in the latest period. Overall, the trend suggests volatility with a recent downward correction.

Cash Operating Taxes

Cash operating taxes show a broadly similar trend marked by significant increases and decreases. Starting at 405,721 thousand US dollars, this figure rises steeply to 1,427,074 thousand US dollars in the subsequent year, then declines to 1,074,728 thousand US dollars. Subsequently, there is a rise to a peak of 1,512,061 thousand US dollars, followed by a slight decrease to 1,412,248 thousand US dollars before dropping significantly to 858,305 thousand US dollars in the last recorded period. This pattern suggests notable fluctuations with peaks that generally coincide with the trends observed in income tax expenses.

The financial data over the span of six years reveals several key trends concerning debt, shareholders' equity, and invested capital.

Total Reported Debt & Leases

The total reported debt and leases initially decreased from approximately 24.82 billion USD in 2020 to around 23.61 billion USD in 2021, indicating a reduction in debt levels. However, from 2021 onward, there was a consistent upward trend, reaching approximately 26.61 billion USD by 2025. This suggests a gradual increase in borrowing or lease obligations over this period, possibly reflecting increased leverage or financing activities.

Shareholders’ Deficit

The shareholders’ deficit showed considerable fluctuation across the years. Starting with a deficit of about -7.81 billion USD in 2020, it improved significantly to approximately -5.32 billion USD in 2021. This improvement could indicate a reduction in accumulated losses or liabilities exceeding equity. However, the deficit then worsened to about -8.71 billion USD in 2022, before improving slightly in the subsequent years but remaining negative through 2025. The persistent negative shareholders’ equity highlights ongoing challenges in equity capitalization or retained earnings, signaling potential financial stress or large accumulations of losses.

Invested Capital

Invested capital showed an initial increase from 22.97 billion USD in 2020 to 23.68 billion USD in 2021, followed by a notable decline to approximately 20.46 billion USD in 2022. After 2022, invested capital steadily increased year over year, reaching around 24.01 billion USD in 2025. This pattern may reflect variations in total capital deployed in the business, possibly influenced by asset acquisitions, disposals, or changes in working capital management. The recovery and growth in invested capital post-2022 suggest renewed investment or improved operational capacity.

Overall, the company displayed a fluctuating financial structure with increasing debt levels in recent years alongside a persistent negative shareholders’ deficit, which raises concerns regarding financial stability. The invested capital trend indicates some volatility but a general recovery trend after 2022, potentially aligned with strategic investments or operational enhancements.

The financial data reveals several fluctuations in the economic performance of the company over the analyzed periods. There are noticeable changes in economic profit, invested capital, and the economic spread ratio, each indicating different aspects of financial health and operational efficiency.

Economic Profit Trends

The economic profit experienced significant volatility. Initially, it was deeply negative, registering a loss of approximately 1.46 billion USD in the first period. Following this, economic profit turned positive and peaked at about 1.65 billion USD around the fourth period. After this peak, there was a downward trend, culminating in substantial negative economic profit again in the last recorded period, with a loss of around 612 million USD. This pattern suggests that the company underwent periods of recovery and profitability but faced challenges in maintaining consistent positive returns.

Invested Capital Trends

Invested capital showed moderate variability but overall an increasing trend. It started at roughly 22.97 billion USD and exhibited some fluctuations, reaching around 20.46 billion USD in the middle of the period analyzed, before increasing again to approximately 24.01 billion USD at the end. This upward movement in invested capital suggests ongoing investments or asset accumulation, although it does not directly correlate with consistent positive economic profit, indicating that increased capital has not unilaterally translated into stronger economic profitability.

Economic Spread Ratio Trends

The economic spread ratio, reflecting the difference between the company’s return on invested capital and its cost of capital, also shifted considerably. It was initially negative, at -6.36%, indicating insufficient returns relative to capital costs. The ratio then turned positive and reached a maximum of 7.44%, reflecting periods where investments generated value over their costs. However, the final period showed a return to a negative spread of -2.55%, signifying that the recent investments or operations may not be yielding returns above their associated costs.

Overall, the data indicates cyclical profitability with periods of strong economic gains but also phases demonstrating impaired value generation. The mismatch between increasing invested capital and declining economic profit and spread in the final period suggests concerns regarding investment efficiency and potential challenges in operational execution or market conditions affecting returns. Continuous monitoring of these trends will be critical for strategic decision-making and managing financial performance moving forward.

The analysis of the annual financial data reveals several noteworthy trends in the company's economic profit, adjusted net revenues, and economic profit margin over the periods examined.

Economic Profit

The economic profit exhibited significant volatility during the analyzed period. Initially, it was negative at -1,461,102 thousand US dollars, indicating a loss. However, the following year saw a positive turnaround to 1,487,748 thousand US dollars. Subsequently, it declined to 1,027,584 thousand US dollars and then increased again to 1,648,577 thousand US dollars. The profit slightly decreased to 1,334,885 thousand US dollars in the next period before falling back into negative territory at -612,392 thousand US dollars in the final period. This pattern suggests fluctuations in the company's ability to generate economic profit, with challenges emerging in the latest period.

Adjusted Net Revenues

Adjusted net revenues consistently increased over the timeframe, rising from 23,559,600 thousand US dollars initially to 37,052,800 thousand US dollars by the end. This persistent growth reflects a steady expansion in revenue streams, suggesting increased sales or pricing power. The incremental increases every year demonstrate resilience and a capacity to grow despite varying profit outcomes.

Economic Profit Margin

The economic profit margin mirrored the volatile trend of economic profit. It started with a negative margin of -6.2%, indicating that the company did not create economic value relative to its revenues. In the following years, the margin improved significantly, reaching 5.12%, then slightly decreasing to 3.2%, rebounding to 4.6%, and dropping moderately to 3.7%. However, the margin turned negative again at -1.65% in the last period. This fluctuation highlights variability in profitability efficiency and cost management relative to revenues across years.

Overall, the consistent growth in adjusted net revenues juxtaposed with the volatility in economic profit and margin suggests the company faced intermittent challenges affecting profitability despite expanding its revenue base. The negative economic profit and margin in the most recent period could indicate increased costs, investments, or other financial pressures that outpaced revenue growth, warranting further examination of operational efficiency and expense control in future assessments.