Starbucks Corp. (SBUX) has rapidly grown into the world's dominant coffee shop-themed chain over five decades by roasting, marketing, and selling an ever-expanding assortment of specialty beverages, food and branded products. These products were sold through more than 32,000 stores in 83 markets around the world as of June 28, 2020. Beverages are the biggest revenue generator by product category. The Americas segment, dominated by U.S. sales, accounts for the vast majority of revenue for the Seattle-headquartered company.

While Starbucks dominates the U.S. market, it faces increasingly tough competition in international markets, including from U.K.-based Costa Coffee, a subsidiary of Coca-Cola Co. (KO); and China-based Luckin Coffee Inc. (LKNCY).

Key Takeaways

  • Starbucks sells beverages, food, and other items in 83 global markets.
  • The company gets the vast majority of sales from beverages and from its Americas segment, comprised of the U.S., Canada, and Latin America.
  • Starbucks is focusing on international expansion and new products for future growth.
  • The adverse impacts of the COVID-19 pandemic on Starbucks' operations reached a peak during its fiscal Q3.
  • Starbucks announced it will be closing up to 400 stores in the U.S. and up to 200 stores in Canada as part of its restructuring plans.

Starbucks' Financials

Starbucks, like many restaurants and retailers, has been severely affected by the impacts of the COVID-19 pandemic this year. The coffee chain posted a net loss of $678.1 million in Q3 of its 2020 fiscal year (FY), which ended June 28, 2020. That is a significant change from the $1.4 billion in net earnings posted in the same three-month period a year ago. The operating loss for the quarter was $703.9 million.

Net revenue for the quarter was $4.2 billion, down 38.1% from the same quarter a year ago. Broken down into product type, beverages sold within the company's operated stores were responsible for 62% of total revenue, while food sold in the company's stores comprised 15% of the total. The other 23% was generated by other revenue, including packaged and single-serve coffees and teas, royalty and licensing revenues, serveware, beverage-related ingredients, and ready-to-drink beverages.

Starbucks said that the most adverse impact of the pandemic occurred during the company's fiscal third quarter, as the number of store closures reached a peak. Most of the company's stores in its major markets have reopened, albeit with modified hours and operations.

Starbucks' Business Segments

Starbucks operates through three main business segments and breaks them down into revenue and operating income: Americas, International, and Channel Development. The company also provides data on non-reportable operating segments and unallocated expenses in a "Corporate and Other" category. Corporate and Other posted an operating loss of $337.2 million on net revenue of $19.7 million in Q3 FY 2020. These figures, as well as any negative amounts, were not used in the calculation of the segment percentage shares below nor in the pie charts above.


Starbucks' Americas segment comprises company-owned and licensed stores in North America, Canada, and Latin America. Americas accounts for about 67% of the company's total segment revenue. About 47% of all Starbucks stores are in the U.S. The Americas segment posted net revenue of $2.8 billion in Q3 FY 2020, falling 40.1% compared to the same quarter a year ago. The segment reported an operating loss of $404.9 million, a significant drop from the $1.0 billion of operating income posted in the year-ago quarter.


Starbucks' International segment includes company-owned and licensed store revenue and operating income in China, Japan, Asia Pacific, Europe, Middle East, and Africa. It comprises nearly 23% of total segment revenue. The segment posted $949.6 million in net revenue in Q3 FY 2020, a 40.1% decrease compared to the same three-month period a year ago. The International segment posted an operating loss of $86.0 million compared to operating income of $270.2 million in the year-ago quarter.

Channel Development

Starbucks' Channel Development segment includes branded roasted whole bean and ground coffees, including Seattle's Best Coffee; Starbucks and Teavana-branded single-serve products; ready-to-drink beverages such as Frappuccino, Doubleshot, Refreshers, and Teavana iced tea; and other branded products sold worldwide outside of company-operated and licensed stores. The Channel Development segment comprises about 11% of total segment revenue and was the only segment that earned positive operating income during the third quarter, accounting for 100% of the total for all three segments. Net revenue for the segment was $447.3 million, down 16.1% compared to the year-ago quarter. Operating income fell 31.7% to $124.2 million.

Starbucks' Recent Developments

In a plan to optimize its store portfolio in urban markets, Starbucks indicated in its Q3 FY 2020 financial results that it was planning to close up to 400 stores in the U.S. over the next 18 months and up to 200 stores in Canada over the next two years.

How Starbucks Reports Diversity & Inclusiveness

As part of our effort to improve the awareness of the importance of diversity in companies, we offer investors a glimpse into the transparency of Starbucks and its commitment to diversity, inclusiveness, and social responsibility. We examined the data Starbucks releases to show you how it reports the diversity of its board and workforce to help readers make educated purchasing and investing decisions.

Below is a table of potential diversity measurements. It shows whether Starbucks discloses its data about the diversity of its board of directors, C-Suite, general management, and employees overall, as is marked with a ✔. It also shows whether Starbucks breaks down those reports to reveal the diversity of itself by race, gender, ability, veteran status, and LGBTQ+ identity.

Starbucks Diversity & Inclusiveness Reporting
  Race Gender Ability Veteran Status Sexual Orientation
Board of Directors          
General Management ✔ (U.S. Only) ✔ (U.S. Only)      
Employees ✔ (U.S. Only) ✔ (U.S. Only)