Summary of Starbucks 10k 2023

These are some of the basic notes after reading SBUX's 10k 2023. This is not detailed analysis but basic info based on the public filing. This focused more on fundamental analysis.

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• Operating in 86 markets. 
• Brands: Teavana, Ethos, Starbucks Reserve, Princi
• Employs ~381,000 people worldwide. ~228,000 in US (219,000 in store, others in corporate and similar roles), 153,000 outside US, ~3.6% stores are unionized. 
• Stores: 19,592
  • Company operated stores: 
    • N. America: 10,628
      • In US: 9,645
      • In Canada: 977
      • In Siren Retail: 6
    • In International: 8,964 
      • China: 6,804
      • Japan: 1,733
      • UK: 355
      • All Other: 67
      • Siren retail: 5
    • Accounts for 82% of total net revenue. 
  • Licensed stores:
    • In North America: 7,182
      • US: 6,701
      • Canda: 481
    • In International: 11,264
      • Korea: 1,870
      • Latin America: 1,649
      • UK: 911
      • Turkey: 676
      • Taiwan: 563
      • Thailand: 474
      • Philippines: 447
      • All Other: 4,093
    • Accounts for 13% of net revenue. 
    • Generally have lower gross margin but higher operating margin. 
    • Licensee is responsible for operating cost, capital investment
    • In certain international market uses traditional franchising model
• Revenue by product:
  • Beverages: 74%
  • Food: 22%
  • Other (packaged coffee, serve ware): 4%
• Buys coffee through fixed-price and price-to-be-fixed commitments, depending on situation. 
• Uses future contracts and collars hedge to hedge exposure to price of coffee
• For other than coffee, including pastry, utensils,  they have contracts with local and national manufacturers. 
• Farmer Support centers: Operates 10 farmer support centers like China Farmer Support Center in Yunnan Province 
• Seasonality: Generally second quarter typically has lower revenue and operating income. 
• Properties: 
  • York, PA:             1,957,000 sq ft for roasting, warehousing and distribution
  • Seattle, WA:        1,294,000 sq ft for Corporate Admin
  • Minden, NV:        1,080,000 sq ft for roasting, warehousing and distribution (Carson Valley)
  • Lebanon, TN:       680,000 sq ft for warehousing and distribution
  • Kunchan, China:  630,000 sq ft for roasting, warehousing and distribution
  • Kent, WA:             510,000 sq ft for roasting and distribution
  • Auburn, WA:         491,000 sq ft warehousing and distribution
  • Sanghai, China:    225,000 sq ft Corporate Admin
• Cash and investments: total of $4.2 mil, of that $2.5 mil were in foreign held subsidiaries
• Borrowing:
  • Revolving Credit: Has $3 bil five year unsecured revolving credit. Interest rate is higher of i) Funds rate +0.5%, ii)BOA Prime Rate  iii) Term DOFR +1%. Covenants, includes  minimum fixed charge coverage ratio. 
  • Commercial Paper: May issue unto $3.0 mil anytime, matures not exceeding 397 days. 
  • Credit Facilities Japan: 5 bil yen ($33.5 mil) of borrowing in Japanese credit facilities. 
• Finance Risk
  • Commodity Risk: Purchases primarily coffee, diary products, diesel, coca, sugar and other commodities.
  • Foreign Currency Exchange Risk: Enters into derivatives instruments to hedge portion of cash flow.