Company Overview
Starbucks Corporation operates as a global roaster, marketer, and retailer of coffee through a network of stores offering coffee, tea, and other beverages, alongside roasted whole beans across three distinct segments: North America, International, and Channel Development. The company is classified within the Consumer Cyclical sector and specifically functions in the Restaurants industry, positioning it as a key player in discretionary consumer spending that fluctuates with economic cycles. As of the latest reported data, the enterprise holds a market capitalization of $98.90B and generates annual revenue of $37.70B, employing a workforce of 381,000 individuals globally. These valuation and revenue figures indicate that Starbucks maintains a massive scale, commanding a significant portion of the consumer discretionary market and establishing itself as a dominant force with substantial operational reach and brand recognition.
Financial Health
Starbucks reported a trailing twelve-month revenue of $37.70B with net income of $1.37B and EBITDA of $5.30B, where the substantial gap between revenue and net income highlights a rigorous cost structure involving high operating expenses, store overhead, and supply chain costs that absorb the majority of top-line growth. The company's free cash flow stands at -$1,439,387,520, which indicates a current period where capital expenditures or working capital requirements are outpacing cash generation, thereby limiting immediate financial flexibility for aggressive share buybacks or dividend increases without external financing. The gross margin is recorded at 22.2%, suggesting that the cost of goods sold consumes a significant portion of revenue, while the operating margin of 9.3% reflects the efficiency of core business operations before interest and taxes. Profit margins sit at 3.6%, demonstrating the final percentage of revenue that translates to bottom-line earnings for shareholders. In terms of liquidity and leverage, the company holds $3.60B in cash against $25.49B in debt, resulting in a debt-to-equity ratio marked as N/A due to specific reporting constraints, yet the absolute debt load is substantial relative to cash reserves. The current ratio is 1.05, indicating that the company's current assets barely exceed its current liabilities, which suggests a tight but manageable short-term liquidity position. Return on Equity is listed as N/A, while Return on Assets is 6.9%, providing a view of how effectively the company utilizes its asset base to generate earnings, though the absence of ROE data limits a full assessment of shareholder capital efficiency.
Valuation Assessment
The trailing twelve-month P/E ratio is 72.34, while the forward P/E is significantly lower at 29.39, implying that the market expects earnings to recover and grow substantially in the coming year to justify the current stock price relative to future expectations. The price-to-book ratio is reported as -11.79, a negative figure that often indicates market skepticism regarding the company's intangible asset valuation or accounting adjustments, suggesting the stock trades at a premium over book value in terms of market sentiment despite the negative multiple. The price-to-sales ratio stands at 2.62, and the EV/EBITDA multiple is 22.80, which are alternative valuation metrics suggesting that investors are willing to pay a high multiple for revenue and earnings power, reflecting confidence in brand loyalty and pricing power. Regarding trading range, the stock has a 52-week high of $104.82 and a 52-week low of $75.50; without the specific current share price, the exact percentage below the high cannot be calculated, but the spread between these extremes illustrates the volatility experienced over the past year. The beta value is 0.93, which indicates that the stock's price volatility is slightly lower than the broader market, suggesting it behaves as a relatively stable large-cap consumer stock that does not amplify market swings as aggressively as high-beta technology or cyclical sectors.
Growth & Income
Revenue growth over the trailing twelve months is 5.5%, while earnings growth is -62.5%, revealing that earnings are growing significantly slower than revenue due to a contraction in profitability rather than a lack of sales volume. The company reports a dividend yield of 2.9% with a payout ratio of 204.2%, which indicates that the current dividend is being paid from cash flows rather than current net income, a scenario that requires careful monitoring as it may not be sustainable if earnings do not improve to match the payout level. Given the negative earnings growth and high payout ratio, the company is currently prioritizing maintaining shareholder returns through dividends rather than reinvesting all earnings into immediate growth initiatives to repair profitability metrics. The overall growth and income profile presents a mixed picture characterized by steady top-line expansion in single digits but significant pressure on bottom-line earnings, paired with a dividend yield that exceeds typical market averages but relies on cash flow support rather than earnings coverage.