Starbucks Corp. (NASDAQ:SBUX)

Net Operating Profit After Taxes (NOPAT)

The net operating profit after taxes experienced significant fluctuation over the analyzed periods. It increased sharply from approximately 1.48 billion USD in 2020 to a peak of around 4.63 billion USD in 2021. This was followed by a decline to about 3.73 billion USD in 2022, a recovery to approximately 4.60 billion USD in 2023, and then a slight decrease to 4.41 billion USD in 2024. The latest figure for 2025 shows a notable drop to roughly 2.45 billion USD.

Cost of Capital

The cost of capital displayed minor variations, beginning at 12.82% in 2020 and rising slightly to a peak of 13.36% in 2023. This was followed by a gradual reduction to 13.10% in 2024 and further down to 12.80% in 2025, indicating a modest decrease in the company’s cost of financing in the most recent years.

Invested Capital

Invested capital values show a somewhat volatile but generally upward trend. Starting at about 22.97 billion USD in 2020, there was a slight increase to nearly 23.68 billion USD in 2021, followed by a decline to approximately 20.46 billion USD in 2022. Subsequently, invested capital rose again to 22.17 billion USD in 2023 and continued increasing to reach 24.01 billion USD by 2025, suggesting continued or growing investment activity.

Economic Profit

Economic profit exhibits considerable variability throughout the periods. It began with a negative value of about -1.47 billion USD in 2020, then turned positive to approximately 1.48 billion USD in 2021. Thereafter, it declined to around 1.02 billion USD in 2022 before increasing to a peak of 1.64 billion USD in 2023. A decrease followed to 1.33 billion USD in 2024 and then a steep drop back into negative territory at approximately -620 million USD in 2025. This suggests fluctuating returns over and above the cost of capital, with losses in the initial and latest years analyzed.

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.

Economic Profit Trends

There is a notable fluctuation in economic profit across the observed periods. Initially, the company experienced a significant economic loss in 2020, registering approximately -1.47 billion US dollars. However, a strong recovery occurred in 2021, with economic profit rising sharply to about 1.48 billion US dollars. Positive economic profit persisted through 2022, 2023, and 2024, albeit with some variability, peaking in 2023 at roughly 1.64 billion US dollars and then slightly decreasing in 2024. By 2025, economic profit reverted to a negative position, recording a loss of around 620 million US dollars.

Invested Capital Development

Invested capital demonstrated a general upward trajectory over the entire timeframe. Starting at approximately 22.97 billion US dollars in 2020, the invested capital increased moderately to about 23.68 billion US dollars in 2021. There was a temporary decline in 2022 to roughly 20.46 billion US dollars, followed by a recovery and subsequent growth, reaching a peak of about 24.01 billion US dollars in 2025. This pattern indicates strategic changes in capital deployment with some contraction in 2022 but overall escalation in resources committed to operations.

Economic Spread Ratio Behavior

The economic spread ratio mirrors the fluctuations seen in economic profit. The ratio transitioned from a negative figure of -6.39% in 2020 to a positive 6.25% in 2021, indicating an improvement in profitability relative to invested capital. It then declined slightly to 4.99% in 2022 before rising to a high of 7.4% in 2023. A decrease followed in 2024, with the ratio falling to 5.64%, and finally turning negative at -2.58% in 2025. This downward trend in the final year suggests challenges in generating returns above the cost of capital.

Overall Insights

The analysis reveals a period of recovery and growth in economic profit and profitability ratios from 2020 through 2023, correlated with increased invested capital after a dip in 2022. However, the return to negative economic profit and economic spread ratio by 2025 highlights potential concerns regarding efficiency or market conditions impacting value creation. The invested capital trend suggests continued investment, but the decreasing profitability metrics towards the end of the observed timeframe imply a need for strategic reassessment to restore positive economic value.

Adjusted Net Revenues

Adjusted net revenues demonstrated a consistent upward trajectory over the analyzed periods. Starting from approximately 23.56 billion USD, revenues grew steadily each year, reaching about 37.05 billion USD by the latest period. This reflects a strong growth trend in revenue generation over the time frame considered.

Economic Profit

The economic profit figures exhibit substantial fluctuation throughout the periods. Initially, there was a significant negative economic profit, indicating a loss situation. This shifted markedly the following year to a positive economic profit exceeding 1.4 billion USD, a trend that persisted for the next several years, with positive values ranging above 1 billion USD. However, in the most recent period analyzed, economic profit declined sharply into a negative value again, indicating a return to economic losses.

Economic Profit Margin

The economic profit margin mirrors the trends observed in economic profit. The margin started at a negative level, increased to positive margins in subsequent years, reaching above 5% before slightly declining in later years. In the final period, the margin once again turned negative, aligning with the observed downturn in economic profit. This pattern suggests variability in profitability efficiency relative to revenues.

Overall Analysis

The data indicates that while the company has managed to grow its adjusted net revenues steadily, its economic profit and profit margins have experienced volatility. The return to negative economic profit and margin in the latest period, despite higher revenues, may imply rising costs, increased investments, or other operational challenges impacting profitability. This suggests a need for further investigation into cost management and operational efficiency to restore positive economic returns.