Starbucks Corp. (NASDAQ:SBUX)

Net Operating Profit After Taxes (NOPAT)

The NOPAT experienced substantial fluctuations over the observed years. It reached a peak in the year ending October 3, 2021, with a significant increase to approximately 4.63 billion USD. Following this, it declined to about 3.73 billion USD in 2022, rebounded again close to 4.60 billion USD in 2023, and then showed a slight decrease in 2024 before sharply declining to approximately 2.45 billion USD by 2025. The trend indicates a volatile performance with notable peaks in 2021 and 2023, but a marked downturn by 2025.

Cost of Capital

The cost of capital remained relatively stable throughout the period, fluctuating narrowly between 12.76% and 13.31%. This slight variability does not suggest significant changes in the company’s risk profile or market conditions related to financing costs.

Invested Capital

Invested capital showed moderate variation over the timeline. There was an initial increase from 22.97 billion USD in 2020 to a peak around 23.68 billion USD in 2021. This was followed by a decrease to approximately 20.46 billion USD in 2022. Subsequently, the invested capital rose steadily to reach 24.01 billion USD by 2025, indicating incremental investments or asset accumulation after the dip in 2022.

Economic Profit

The economic profit exhibited a highly variable pattern correlating partially with NOPAT performance and invested capital changes. Initially, in 2020, the company reported a negative economic profit of about -1.46 billion USD, signaling value destruction. This turned positive in 2021 with about 1.49 billion USD and remained positive through 2024, indicating value creation during those years. However, despite substantial invested capital and stable cost of capital, economic profit sharply dropped to a negative 609 million USD in 2025, marking a return to value erosion in that latest year.

Summary of Trends and Insights

The financial data reflects a period of volatility in operational profitability with marked fluctuations in NOPAT and economic profit. While the cost of capital remained stable, invested capital experienced both contractions and expansions. The economic profit trajectory reveals that value creation was achieved predominantly between 2021 and 2024 but was lost again in 2025. The significant downturn in both NOPAT and economic profit in 2025, despite the highest invested capital during the period, suggests challenges in effectively generating returns on the capital employed in the most recent year.

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 analysis of the financial data over the indicated periods reveals several key trends related to economic profit, invested capital, and economic spread ratio.

Economic Profit

The economic profit shows considerable fluctuations over the examined years. Initially, there is a significant negative value, indicating a loss in economic value. From 2020 to 2021, there is a marked improvement, shifting from a substantial loss to a strong positive profit. This positive trend persists through 2022 and peaks in 2023. However, in the last recorded period of 2025, economic profit declines sharply and turns negative again. This suggests variability in the company's ability to generate returns exceeding its cost of capital over time.

Invested Capital

The invested capital shows a generally increasing trend with some variations. The value starts relatively high, with a slight increase in 2021, followed by a decline in 2022. From 2022 onwards, invested capital gradually rises again, reaching its highest point in the 2025 period. This upward trend in invested capital might indicate continued investment in the company's operations or expansion efforts despite fluctuations in economic profit.

Economic Spread Ratio

The economic spread ratio mirrors the pattern seen in economic profit, with negative values in 2020 and 2025 and positive values during the middle years. The spread ratio improves substantially from a negative percentage to around 6.29% in 2021, then slowly decreases but remains positive through 2024. The negative value in 2025 indicates a decrease in profitability relative to the cost of capital. This ratio's pattern highlights changes in the company’s efficiency in generating value over and above the cost incurred for capital employed.

Overall, the data illustrates an initial recovery phase and improved capital efficiency through 2023, followed by a decline in profitability and economic return on capital by the final period. The increases in invested capital despite this decline could imply ongoing capital expenditures or strategic investments that may affect future performance.

Adjusted Net Revenues

The adjusted net revenues have shown a consistent upward trend over the analyzed periods. Starting from approximately 23.56 billion US dollars, revenues increased each year, reaching about 37.05 billion US dollars by the final period. This steady growth indicates a positive sales performance and expansion over the years.

Economic Profit

The economic profit figures exhibit considerable fluctuation. Initially, there was a significant negative economic profit of approximately -1.46 billion US dollars. However, from the following period onwards, economic profit turned positive and remained so for several years, peaking at around 1.65 billion US dollars. In the latest period, economic profit fell sharply back into negative territory at approximately -610 million US dollars, suggesting challenges affecting profitability despite growing revenues.

Economic Profit Margin

The economic profit margin follows a pattern consistent with the economic profit values. It began negatively at -6.19%, shifted to positive margins around 5.13%, and after fluctuating within a range of approximately 1.65% to 4.6% in the subsequent years, it declined into a negative margin (-1.65%) in the final period. This indicates that profitability relative to revenues has weakened markedly in the most recent year evaluated.

Overall Analysis

Despite the steady increase in revenues, the company experienced volatility in profitability as reflected in economic profit and its margin. The reversal to negative economic profit and margin in the last year suggests that rising revenues have not translated into sustainable economic gains, potentially due to increased costs or other adverse financial factors. This pattern highlights the importance of monitoring profitability metrics alongside revenue growth to assess financial health comprehensively.