8-KFinancial EventsRegulation FDExhibits & Filings

STARBUCKS CORP 8-K Report, Exit or Disposal Costs (Sep 25, 2025)

Filed September 25, 2025For Securities:SBUX

Summary

Starbucks Corporation (SBUX) announced a significant restructuring plan as part of its "Back to Starbucks" strategy, aimed at revitalizing its coffeehouses and enhancing the customer experience. This plan includes the closure of coffeehouses that do not meet brand standards or have a clear path to profitability, as well as a transformation of its support organization. The company anticipates incurring approximately $1 billion in restructuring charges, with 90% of these expenses attributed to its North America business. A substantial portion of these charges are expected to impact fiscal year 2025. Investors should note that these charges are comprised of employee separation benefits, disposal and impairment of company-operated store assets, and lease-related costs, including accelerated amortization of ROU assets. While approximately $400 million are estimated to be non-cash charges (asset impairment and disposal), the remaining $600 million represent future cash expenditures. The majority of store closures are expected to be completed by the end of the current fiscal year. This strategic move signals a focus on optimizing the store portfolio and improving operational efficiency to drive future growth and profitability.

Key Highlights

  • 1Starbucks is implementing a restructuring plan under its "Back to Starbucks" strategy.
  • 2The plan involves closing underperforming coffeehouses and transforming the support organization.
  • 3Approximately $1 billion in restructuring charges are estimated, with 90% impacting North America.
  • 4The majority of store closures are expected by the end of the fiscal year.
  • 5Restructuring costs include $150M for employee separation, $400M for asset disposal/impairment, and $450M for lease costs.
  • 6Estimated charges include $400M non-cash (asset impairment/disposal) and $600M cash (employee separation, lease exit costs).
  • 7A significant portion of these charges will be recognized in fiscal year 2025.

Frequently Asked Questions

The primary goal of the "Back to Starbucks" strategy is to revitalize coffeehouses, enhance the customer experience, and build a stronger, more resilient company by optimizing its store portfolio and support organization.

The filing indicates that the company will close coffeehouses that do not meet criteria for brand consistency or financial performance, but it does not specify an exact number of stores. It does state that a majority of the store closures will be completed by the end of the fiscal year.

Starbucks estimates total restructuring charges of approximately $1 billion. This includes approximately $150 million for employee separation benefits, $400 million for asset disposal and impairment, and $450 million for lease-related costs.

Of the total estimated restructuring charges, approximately $400 million are non-cash charges related to asset impairment and disposal. The remaining approximately $600 million are expected to be future cash expenditures, primarily for employee separation benefits and lease exit costs.