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1、Table of ContentsUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,DC 20549FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the Quarterly Period Ended April 2,2023OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE
2、 ACT OF 1934For the transition period from to .Commission File Number:000-20322Starbucks Corporation(Exact Name of Registrant as Specified in its Charter)Washington91-1325671(State or Other Jurisdiction ofIncorporation or Organization)(IRS EmployerIdentification No.)2401 Utah Avenue South,Seattle,Wa
3、shington 98134(Address of principal executive offices)(206)447-1575(Registrants Telephone Number,including Area Code)Securities registered pursuant to Section 12(b)of the Act:TitleTrading SymbolName of each exchange on which registeredCommon Stock,par value$0.001 per shareSBUXNasdaq Global Select Ma
4、rketIndicate by check mark whether the registrant:(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 duringthe preceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such
5、filing requirements forthe past 90 days.Yes x No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period tha
6、t the registrant was required to submit suchfiles).Yes x No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,smaller reporting company,or anemerging growth company.See the definitions of“large accelerated filer,”“accelerated file
7、r,”“smaller reporting company”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large accelerated filerxAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth companyIf an emerging growth company,indicate by check mark if the registrant has elected not to use the
8、extended transition period for complying with any new orrevised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act):Yes No x Indicate the number of shares o
9、utstanding of each of the issuers classes of common stock,as of the latest practicable date.Shares Outstanding as of April 26,20231,146.4 millionTable of ContentsSTARBUCKS CORPORATIONFORM 10-QFor the Quarterly Period Ended April 2,2023Table of Contents PART I.FINANCIAL INFORMATIONItem 1Financial Sta
10、tements(Unaudited)3Consolidated Statements of Earnings3Consolidated Statements of Comprehensive Income4Consolidated Balance Sheets5Consolidated Statements of Cash Flows6Consolidated Statements of Equity7Index for Notes to Consolidated Financial Statements9Notes to Consolidated Financial Statements10
11、Item 2Managements Discussion and Analysis of Financial Condition and Results of Operations27Item 3Quantitative and Qualitative Disclosures About Market Risk40Item 4Controls and Procedures40PART II.OTHER INFORMATIONItem 1Legal Proceedings41Item 1ARisk Factors41Item 2Unregistered Sales of Equity Secur
12、ities and Use of Proceeds41Item 3Defaults Upon Senior Securities41Item 4Mine Safety Disclosures41Item 5Other Information41Item 6Exhibits42Signatures43 Table of ContentsPART I FINANCIAL INFORMATIONItem 1.Financial StatementsSTARBUCKS CORPORATIONCONSOLIDATED STATEMENTS OF EARNINGS(in millions,except p
13、er share data)(unaudited)Quarter EndedTwo Quarters EndedApr 2,2023Apr 3,2022Apr 2,2023Apr 3,2022Net revenues:Company-operated stores$7,142.3$6,276.7$14,225.7$12,999.1 Licensed stores1,069.5 849.5 2,189.0 1,700.3 Other508.0 509.4 1,019.1 986.6 Total net revenues8,719.8 7,635.6 17,433.8 15,686.0 Produ
14、ct and distribution costs2,801.7 2,465.8 5,611.9 4,992.7 Store operating expenses3,636.0 3,314.7 7,301.3 6,714.6 Other operating expenses126.2 101.7 255.4 203.4 Depreciation and amortization expenses341.9 367.7 669.0 733.8 General and administrative expenses620.4 481.5 1,201.3 1,007.3 Restructuring
15、and impairments8.8 4.4 14.7(3.1)Total operating expenses7,535.0 6,735.8 15,053.6 13,648.7 Income from equity investees51.4 49.1 109.2 89.4 Gain from sale of assets91.3 91.3 Operating income1,327.5 948.9 2,580.7 2,126.7 Interest income and other,net18.4 46.3 30.0 46.2 Interest expense(136.3)(119.1)(2
16、66.0)(234.4)Earnings before income taxes1,209.6 876.1 2,344.7 1,938.5 Income tax expense301.3 201.1 581.1 447.4 Net earnings including noncontrolling interests908.3 675.0 1,763.6 1,491.1 Net earnings attributable to noncontrolling interests0.0 0.5 0.0 0.7 Net earnings attributable to Starbucks$908.3
17、$674.5$1,763.6$1,490.4 Earnings per share-basic$0.79$0.59$1.54$1.29 Earnings per share-diluted$0.79$0.58$1.53$1.28 Weighted average shares outstanding:Basic1,148.5 1,149.2 1,148.4 1,159.4 Diluted1,152.7 1,153.9 1,152.8 1,165.2 See Notes to Consolidated Financial Statements.3Table of ContentsSTARBUCK
18、S CORPORATIONCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(in millions,unaudited)Quarter EndedTwo Quarters EndedApr 2,2023Apr 3,2022Apr 2,2023Apr 3,2022Net earnings including noncontrolling interests$908.3$675.0$1,763.6$1,491.1 Other comprehensive income/(loss),net of tax:Unrealized holding gains/
19、(losses)on available-for-sale debt securities3.6(10.5)5.6(13.9)Tax(expense)/benefit(0.8)2.6(1.3)3.4 Unrealized gains/(losses)on cash flow hedging instruments(1.2)67.1(181.9)155.8 Tax(expense)/benefit0.1(14.2)29.6(26.0)Unrealized gains/(losses)on net investment hedging instruments(2.7)38.1(67.3)79.6
20、Tax(expense)/benefit0.7(9.6)17.0(20.1)Translation adjustment and other74.7(38.5)283.6(24.3)Tax(expense)/benefit Reclassification adjustment for net(gains)/losses realized in netearnings for available-for-sale debt securities,hedging instruments,and translation adjustment(66.6)(34.2)(165.0)(50.3)Tax
21、expense/(benefit)9.5 6.0 21.3 8.9 Other comprehensive income/(loss)17.3 6.8(58.4)113.1 Comprehensive income including noncontrolling interests925.6 681.8 1,705.2 1,604.2 Comprehensive income attributable to noncontrolling interests 0.5 0.7 Comprehensive income attributable to Starbucks$925.6$681.3$1
22、,705.2$1,603.5 See Notes to Consolidated Financial Statements.4Table of ContentsSTARBUCKS CORPORATIONCONSOLIDATED BALANCE SHEETS(in millions,except per share data)(unaudited)Apr 2,2023Oct 2,2022ASSETSCurrent assets:Cash and cash equivalents$3,071.8$2,818.4 Short-term investments379.4 364.5 Accounts
23、receivable,net1,185.8 1,175.5 Inventories2,000.6 2,176.6 Prepaid expenses and other current assets408.6 483.7 Total current assets7,046.2 7,018.7 Long-term investments251.2 279.1 Equity investments360.5 311.2 Property,plant and equipment,net6,818.6 6,560.5 Operating lease,right-of-use asset8,251.6 8
24、,015.6 Deferred income taxes,net1,811.1 1,799.7 Other long-term assets526.7 554.2 Other intangible assets130.8 155.9 Goodwill3,412.3 3,283.5 TOTAL ASSETS$28,609.0$27,978.4 LIABILITIES AND SHAREHOLDERS EQUITY/(DEFICIT)Current liabilities:Accounts payable$1,434.0$1,441.4 Accrued liabilities1,970.0 2,1
25、37.1 Accrued payroll and benefits710.9 761.7 Current portion of operating lease liability1,269.5 1,245.7 Stored value card liability and current portion of deferred revenue1,795.9 1,641.9 Short-term debt52.8 175.0 Current portion of long-term debt1,888.7 1,749.0 Total current liabilities9,121.8 9,15
26、1.8 Long-term debt13,544.8 13,119.9 Operating lease liability7,753.5 7,515.2 Deferred revenue6,200.2 6,279.7 Other long-term liabilities488.1 610.5 Total liabilities37,108.4 36,677.1 Shareholders deficit:Common stock($0.001 par value)authorized,2,400.0 shares;issued and outstanding,1,147.0 and 1,147
27、.9shares,respectively1.1 1.1 Additional paid-in capital38.2 205.3 Retained deficit(8,024.6)(8,449.8)Accumulated other comprehensive income/(loss)(521.6)(463.2)Total shareholders deficit(8,506.9)(8,706.6)Noncontrolling interests7.5 7.9 Total deficit(8,499.4)(8,698.7)TOTAL LIABILITIES AND SHAREHOLDERS
28、 EQUITY/(DEFICIT)$28,609.0$27,978.4 See Notes to Consolidated Financial Statements.5Table of ContentsSTARBUCKS CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWS(in millions,unaudited)Two Quarters EndedApr 2,2023Apr 3,2022OPERATING ACTIVITIES:Net earnings including noncontrolling interests$1,763.6$1,4
29、91.1 Adjustments to reconcile net earnings to net cash provided by operating activities:Depreciation and amortization709.3 777.7 Deferred income taxes,net2.6 28.4 Income earned from equity method investees(109.9)(118.7)Distributions received from equity method investees88.0 100.8 Gain on sale of ass
30、ets(91.3)Stock-based compensation159.3 149.2 Non-cash lease costs584.7 670.7 Loss on retirement and impairment of assets75.6 77.3 Other22.6(17.9)Cash provided by/(used in)changes in operating assets and liabilities:Accounts receivable26.2(62.1)Inventories194.6(324.9)Accounts payable(51.2)133.0 Defer
31、red revenue54.0 110.2 Operating lease liability(621.8)(766.3)Other operating assets and liabilities(445.5)(215.7)Net cash provided by operating activities2,360.8 2,032.8 INVESTING ACTIVITIES:Purchases of investments(247.7)(67.5)Sales of investments1.9 72.6 Maturities and calls of investments270.0 55
32、.7 Additions to property,plant and equipment(1,002.0)(871.9)Proceeds from sale of assets110.0 Other(39.2)(69.8)Net cash used in investing activities(907.0)(880.9)FINANCING ACTIVITIES:Net(payments)/proceeds from issuance of commercial paper(175.0)Net proceeds from issuance of short-term debt52.8 17.4
33、 Repayments of short-term debt(12.6)Net proceeds from issuance of long-term debt1,497.8 1,498.1 Repayments of long-term debt(1,000.0)Proceeds from issuance of common stock129.8 56.3 Cash dividends paid(1,217.4)(1,139.2)Repurchase of common stock(479.3)(3,997.5)Minimum tax withholdings on share-based
34、 awards(81.4)(122.1)Other(10.7)(9.2)Net cash provided by/(used in)financing activities(1,283.4)(3,708.8)Effect of exchange rate changes on cash and cash equivalents83.0 14.6 Net increase/(decrease)in cash and cash equivalents253.4(2,542.3)CASH AND CASH EQUIVALENTS:Beginning of period2,818.4 6,455.7
35、End of period$3,071.8$3,913.4 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid during the period for:Interest,net of capitalized interest$250.4$236.0 Income taxes$636.8$783.2 See Notes to Consolidated Financial Statements.6Table of ContentsSTARBUCKS CORPORATIONCONSOLIDATED STATEMENTS OF EQ
36、UITYFor the Quarter Ended April 2,2023 and April 3,2022(in millions,except per share data,unaudited)Common StockAdditionalPaid-inCapitalRetainedEarnings/(Deficit)AccumulatedOtherComprehensiveIncome/(Loss)ShareholdersEquity/(Deficit)NoncontrollingInterestsTotal SharesAmountBalance,January 1,20231,148
37、.5$1.1$67.2$(8,203.2)$(538.9)$(8,673.8)$7.9$(8,665.9)Net earnings 908.3 908.3 908.3 Other comprehensive loss 17.3 17.3 17.3 Stock-based compensation expense 75.0 75.0 75.0 Exercise of stock options/vesting ofRSUs1.3 68.2 68.2 68.2 Sale of common stock0.2 13.3 13.3 13.3 Repurchase of common stock(3.0
38、)(182.5)(121.5)(304.0)(304.0)Cash dividends declared,$0.53 pershare (608.2)(608.2)(608.2)Purchase of noncontrolling interests(3.0)(3.0)(0.4)(3.4)Balance,April 2,20231,147.0$1.1$38.2$(8,024.6)$(521.6)$(8,506.9)$7.5$(8,499.4)Balance,January 2,20221,151.6$1.2$41.1$(8,753.0)$253.5$(8,457.2)$6.9$(8,450.3
39、)Net earnings 674.5 674.5 0.5 675.0 Other comprehensive income 6.8 6.8 6.8 Stock-based compensation expense 54.4 54.4 54.4 Exercise of stock options/vesting ofRSUs0.4(0.1)(4.4)(4.5)(4.5)Sale of common stock0.1 11.0 11.0 11.0 Repurchase of common stock(5.2)(61.0)(431.1)(492.1)(492.1)Cash dividends de
40、clared,$0.49 pershare (560.9)(560.9)(560.9)Net distributions to noncontrollinginterests (0.6)(0.6)Balance,April 3,20221,146.9$1.1$41.1$(9,070.5)$260.3$(8,768.0)$6.8$(8,761.2)See Notes to Consolidated Financial Statements.7Table of ContentsSTARBUCKS CORPORATIONCONSOLIDATED STATEMENTS OF EQUITYFor the
41、 Two Quarters Ended April 2,2023 and April 3,2022(in millions,except per share data,unaudited)Common StockAdditionalPaid-inCapitalRetainedEarnings/(Deficit)AccumulatedOtherComprehensiveIncome/(Loss)ShareholdersEquity/(Deficit)NoncontrollingInterestsTotal SharesAmountBalance,October 2,20221,147.9$1.1
42、$205.3$(8,449.8)$(463.2)$(8,706.6)$7.9$(8,698.7)Net earnings 1,763.6 1,763.6 1,763.6 Other comprehensive loss (58.4)(58.4)(58.4)Stock-based compensation expense 161.4 161.4 161.4 Exercise of stock options/vesting ofRSUs3.7 23.5 23.5 23.5 Sale of common stock0.3 24.9 24.9 24.9 Repurchase of common st
43、ock(4.9)(373.9)(121.5)(495.4)(495.4)Cash dividends declared,$1.06 pershare (1,216.9)(1,216.9)(1,216.9)Purchase of noncontrolling interests(3.0)(3.0)(0.4)(3.4)Balance,April 2,20231,147.0$1.1$38.2$(8,024.6)$(521.6)$(8,506.9)$7.5$(8,499.4)Balance,October 3,20211,180.0$1.2$846.1$(6,315.7)$147.2$(5,321.2
44、)$6.7$(5,314.5)Net earnings 1,490.4 1,490.4 0.7 1,491.1 Other comprehensive income 113.1 113.1 113.1 Stock-based compensation expense 151.5 151.5 151.5 Exercise of stock options/vesting ofRSUs3.0(0.1)(88.5)(88.6)(88.6)Sale of common stock0.2 22.8 22.8 22.8 Repurchase of common stock(36.3)(890.8)(3,1
45、22.2)(4,013.0)(4,013.0)Cash dividends declared,$0.98 pershare (1,123.0)(1,123.0)(1,123.0)Net distributions to noncontrollinginterests (0.6)(0.6)Balance,April 3,20221,146.9$1.1$41.1$(9,070.5)$260.3$(8,768.0)$6.8$(8,761.2)See Notes to Consolidated Financial Statements.8Table of ContentsSTARBUCKS CORPO
46、RATIONINDEX FOR NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNote 1Summary of Significant Accounting Policies and Estimates10Note 2Acquisitions,Divestitures and Strategic Alliance10Note 3Derivative Financial Instruments11Note 4Fair Value Measurements15Note 5Inventories17Note 6Supplemental Balance Sheet
47、 and Statement of Earnings Information17Note 7Other Intangible Assets and Goodwill18Note 8Debt19Note 9Leases21Note 10Deferred Revenue22Note 11Equity23Note 12Employee Stock Plans24Note 13Earnings per Share25Note 14Commitments and Contingencies25Note 15Segment Reporting259Table of ContentsSTARBUCKS CO
48、RPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(unaudited)Note 1:Summary of Significant Accounting Policies and EstimatesFinancial Statement PreparationThe unaudited consolidated financial statements as of April 2,2023,and for the quarters and two quarters ended April 2,2023 and April 3,2022,hav
49、e beenprepared by Starbucks Corporation under the rules and regulations of the Securities and Exchange Commission(“SEC”).In the opinion of management,thefinancial information for the quarters and two quarters ended April 2,2023 and April 3,2022 reflects all adjustments and accruals,which are of a no
50、rmalrecurring nature,necessary for a fair presentation of the financial position,results of operations and cash flows for the interim periods.In this Quarterly Reporton Form 10-Q(“10-Q”),Starbucks Corporation is referred to as“Starbucks,”the“Company,”“we,”“us”or“our.”Segment information is prepared
51、on the same basis that our management reviews financial information for operational decision-making purposes.Certain prior period information on the consolidated statements of cash flows have been reclassified to conform to the current presentation.The financial information as of October 2,2022 is d
52、erived from our audited consolidated financial statements and notes for the fiscal year ended October 2,2022(“fiscal 2022”)included in Item 8 in the Fiscal 2022 Annual Report on Form 10-K(“10-K”).The information included in this 10-Q should be read inconjunction with the footnotes and managements di
53、scussion and analysis of the consolidated financial statements in the 10-K.The results of operations for the quarter and two quarters ended April 2,2023 are not necessarily indicative of the results of operations that may be achieved forthe entire fiscal year ending October 1,2023(“fiscal 2023”).The
54、 novel coronavirus,known as the global COVID-19 pandemic,was first identified in December 2019 before spreading to markets where we have company-operated or licensed stores.We have since established the necessary protocols to operate safely,and in many of our markets,our businesses demonstratedpower
55、ful momentum beyond recovery from the COVID-19 pandemic.During the quarter ended April 2,2023,our China market began recovering frompandemic-related business interruptions in previous quarters that had suppressed customer mobility.We continue to monitor the COVID-19 pandemic and itseffect on our bus
56、iness and results of operations;however,we cannot predict the duration,scope or severity of the COVID-19 pandemic or its future impact onour business,results of operations,cash flows and financial condition.RestructuringIn fiscal 2022,we announced our plan in the U.S.market to increase efficiency wh
57、ile elevating the partner and customer experience(the“Reinvention Plan”).We believe the company-operated market investments in partner wages and trainings have increased retention and productivity while the acceleration ofpurpose-built store concepts and innovations in technologies will provide addi
58、tional convenience and connection with our customers.As a result of therestructuring efforts in connection with the Reinvention Plan,we recorded an immaterial charge on our consolidated statements of earnings during the quarterand two quarters ended April 2,2023.Future restructuring and impairment c
59、osts attributable to our Reinvention Plan are not expected to be material.As of April 2,2023 and October 2,2022,there were no material restructuring-related accrued liabilities on our consolidated balance sheets.Recently Adopted Accounting PronouncementsIn the first quarter of fiscal 2022,we adopted
60、 the Financial Accounting Standards Board(“FASB”)issued guidance related to reference rate reform.Thepronouncement provides temporary optional expedients and exceptions to the current guidance on contract modifications and hedge accounting to ease thefinancial reporting burden related to the expecte
61、d market transition from the London Interbank Offered Rate(“LIBOR”)and other interbank offered rates toalternative reference rates.The guidance was effective upon issuance and generally can be applied to applicable contract modifications through December 31,2024.The adoption of the new guidance did
62、not have a material impact on our financial statements.Note 2:Acquisitions,Divestitures and Strategic AllianceFiscal 2023On January 13,2023,we sold the assets,primarily consisting of intellectual properties associated with the Seattles Best Coffee brand,to Nestl for$110.0million.The transaction resu
63、lted in a pre-tax gain of$91.3 million,which was included in gain from sale of assets on our consolidated statements of earnings.Results from Seattles Best Coffee operations prior to the sale are reported in our Channel Development operating segment.10Table of ContentsFiscal 2022In the fourth quarte
64、r of fiscal 2022,we sold our Evolution Fresh brand and business to Bolthouse Farms.This transaction did not have a material impact on ourconsolidated financial statements.Note 3:Derivative Financial InstrumentsInterest RatesFrom time to time,we enter into designated cash flow hedges to manage the va
65、riability in cash flows due to changes in benchmark interest rates.We enter intointerest rate swap agreements and treasury locks,which are synthetic forward sales of U.S.Treasury securities settled in cash based upon the differencebetween an agreed-upon treasury rate and the prevailing treasury rate
66、 at settlement.These agreements are cash settled at the time of the pricing of the relateddebt.Each derivative agreements gain or loss is recorded in accumulated other comprehensive income(“AOCI”)and is subsequently reclassified to interestexpense over the life of the related debt.To hedge the expos
67、ure to changes in the fair value of our fixed-rate debt,we enter into interest rate swap agreements,which are designated as fair value hedges.The changes in fair values of these derivative instruments and the offsetting changes in fair values of the underlying hedged debt due to changes in the relev
68、antbenchmark interest rates are recorded in interest expense.Refer to Note 8,Debt,for additional information on our long-term debt.Foreign CurrencyTo reduce cash flow volatility from foreign currency fluctuations,we enter into forward and swap contracts to hedge portions of cash flows of anticipated
69、intercompany royalty payments,inventory purchases,and intercompany borrowing and lending activities.The resulting gains and losses from these derivativesare recorded in AOCI and subsequently reclassified to revenue,product and distribution costs,or interest income and other,net,respectively,when the
70、 hedgedexposures affect net earnings.From time to time,we may enter into financial instruments,including,but not limited to,forward and swap contracts or foreign currency-denominated debt,tohedge the currency exposure of our net investments in certain international operations.The resulting gains and
71、 losses from these derivatives are recorded inAOCI and are subsequently reclassified to net earnings when the hedged net investment is either sold or substantially liquidated.Foreign currency forward and swap contracts not designated as hedging instruments are used to mitigate the foreign exchange r
72、isk of certain other balancesheet items.Gains and losses from these derivatives are largely offset by the financial impact of translating foreign currency-denominated payables andreceivables,and these gains and losses are recorded in interest income and other,net.CommoditiesDepending on market condi
73、tions,we may enter into coffee forward contracts,futures contracts and collars to hedge anticipated cash flows under our price-to-be-fixed green coffee contracts,which are described further in Note 5,Inventories,or our longer-dated forecasted coffee demand where underlying fixed priceand price-to-be
74、-fixed contracts are not yet available.The resulting gains and losses are recorded in AOCI and are subsequently reclassified to product anddistribution costs when the hedged exposure affects net earnings.Depending on market conditions,we may also enter into dairy forward contracts and futures contra
75、cts to hedge a portion of anticipated cash flows under ourdairy purchase contracts and our forecasted dairy demand.The resulting gains or losses are recorded in AOCI and are subsequently reclassified to product anddistribution costs when the hedged exposure affects net earnings.Cash flow hedges rela
76、ted to anticipated transactions are designated and documented at the inception of each hedge.Cash flows from hedging transactions areclassified in the same categories as the cash flows from the respective hedged items.For de-designated cash flow hedges in which the underlying transactionsare no long
77、er probable of occurring,the related accumulated derivative gains or losses are recognized in interest income and other,net on our consolidatedstatements of earnings.These derivatives may be accounted for prospectively as non-designated derivatives until maturity,re-designated to new hedgingrelation
78、ships or terminated early.We continue to believe transactions related to our other designated cash flow hedges are probable to occur.To mitigate the price uncertainty of a portion of our future purchases,including diesel fuel and other commodities,we enter into swap contracts,futures andcollars that
79、 are not designated as hedging instruments.The resulting gains and losses are recorded in interest income and other,net to help offset pricefluctuations on our beverage,food,packaging and transportation costs,which are included in product and distribution costs on our consolidated statements ofearni
80、ngs.11Table of ContentsGains and losses on derivative contracts and foreign currency-denominated debt designated as hedging instruments included in AOCI and expected to bereclassified into earnings within 12 months,net of tax(in millions):Net Gains/(Losses)Included in AOCINet Gains/(Losses)Expectedt
81、o be Reclassified from AOCIinto Earnings within 12MonthsOutstanding Contract/DebtRemaining Maturity(Months)Apr 2,2023Oct 2,2022Cash Flow Hedges:Coffee$(89.8)$153.9$(87.7)4Cross-currency swaps(1.3)(1.9)20Dairy(3.4)(2.6)(3.4)10Foreign currency-other11.7 55.3 11.7 33Interest rates(5.3)(5.8)0.2 0Net Inv
82、estment Hedges:Cross-currency swaps46.7 67.3 108Foreign currency16.1 16.1 0Foreign currency debt86.8 125.7 1212Table of ContentsPre-tax gains and losses on derivative contracts and foreign currency-denominated long-term debt designated as hedging instruments recognized in othercomprehensive income(“
83、OCI”)and reclassifications from AOCI to earnings(in millions):Quarter EndedGains/(Losses)Recognized inOCI Before ReclassificationsGains/(Losses)Reclassified fromAOCI to EarningsLocation of gain/(loss)Apr 2,2023Apr 3,2022Apr 2,2023Apr 3,2022Cash Flow Hedges:Coffee$(0.5)$24.0$59.9$17.8 Product and dis
84、tribution costsCross-currency swaps(2.5)4.9(3.0)(0.8)Interest expense(0.1)9.4 Interest income and other,netDairy(2.3)3.4(3.3)2.9 Product and distribution costsForeign currency-other3.8 0.7 4.0 2.4 Licensed stores revenue2.2(0.3)Product and distribution costsInterest rates0.3 34.1 0.2(0.5)Interest ex
85、penseNet Investment Hedges:Cross-currency swaps(1.1)(2.1)7.0 3.5 Interest expenseForeign currency debt(1.6)40.2 Two Quarters EndedGains/(Losses)Recognized inOCI Before ReclassificationsGains/(Losses)Reclassified fromAOCI to EarningsLocation of gain/(loss)Apr 2,2023Apr 3,2022Apr 2,2023Apr 3,2022Cash
86、Flow Hedges:Coffee$(119.9)$95.5$156.6$24.3 Product and distribution costsCross-currency swaps(14.2)9.4(5.7)(1.6)Interest expense(9.2)16.3 Interest income and other,netDairy(5.9)8.0(4.8)2.5 Product and distribution costsForeign currency-other(42.2)7.6 11.9 4.5 Licensed stores revenue4.4(1.7)Product a
87、nd distribution costs0.2 Interest income and other,netInterest rates0.3 35.3(0.3)(0.9)Interest expenseNet Investment Hedges:Cross-currency swaps(15.1)14.2 12.3 6.9 Interest expenseForeign currency debt(52.2)65.4 Pre-tax gains and losses on non-designated derivatives and designated fair value hedging
88、 instruments and the related fair value hedged item recognized inearnings(in millions):Gains/(Losses)Recognized in EarningsLocation of gain/(loss)recognized in earningsQuarter EndedTwo Quarters Ended Apr 2,2023Apr 3,2022Apr 2,2023Apr 3,2022Non-Designated Derivatives:DairyInterest income and other,ne
89、t$0.1$0.1 Foreign currency-otherInterest income and other,net1.6 11.6(10.0)21.8 CoffeeInterest income and other,net 6.2(5.5)9.3 Diesel fuel and other commoditiesInterest income and other,net(1.7)0.7(1.9)0.7 Fair Value Hedges:Interest rate swapInterest expense4.7(21.3)3.1(26.1)Long-term debt(hedged i
90、tem)Interest expense(12.1)24.8(15.4)33.0 13Table of ContentsNotional amounts of outstanding derivative contracts(in millions):Apr 2,2023Oct 2,2022Coffee$186$649 Cross-currency swaps1,108 741 Dairy77 94 Diesel fuel and other commodities25 33 Foreign currency-other1,194 1,269 Interest rate swaps1,100
91、1,100 Fair value of outstanding derivative contracts(in millions)including the location of the asset and/or liability on the consolidated balance sheets:Derivative AssetsBalance Sheet LocationApr 2,2023Oct 2,2022Designated Derivative Instruments:Cross-currency swapsOther long-term assets$81.9$115.4
92、DairyPrepaid expenses and other current assets0.1 0.5 Foreign currency-otherPrepaid expenses and other current assets19.9 39.9 Other long-term assets10.9 33.5 Non-designated Derivative Instruments:Diesel fuel and other commoditiesPrepaid expenses and other current assets0.1 0.4 Foreign currencyPrepa
93、id expenses and other current assets4.1 34.3 Other long-term assets 7.3 Derivative LiabilitiesBalance Sheet LocationApr 2,2023Oct 2,2022Designated Derivative Instruments:Cross-currency swapsOther long-term liabilities$8.8$DairyAccrued liabilities1.8 2.9 Foreign currency-otherAccrued liabilities7.9 0
94、.3 Other long-term liabilities8.1 Interest rate swapsAccrued liabilities10.0 12.0 Other long-term liabilities25.9 34.0 Non-designated Derivative Instruments:Diesel fuel and other commoditiesAccrued liabilities1.3 Foreign currencyAccrued liabilities1.6 5.8 The following amounts were recorded on the c
95、onsolidated balance sheets related to fixed-to-floating interest rate swaps designated in fair value hedgingrelationships(in millions):Carrying amount of hedged itemCumulative amount of fair value hedging adjustmentincluded in the carrying amountApr 2,2023Oct 2,2022Apr 2,2023Oct 2,2022Location on th
96、e balance sheetLong-term debt$1,063.1$1,047.7$(36.9)$(52.3)Additional disclosures related to cash flow gains and losses included in AOCI,as well as subsequent reclassifications to earnings,are included in Note 11,Equity.14Table of ContentsNote 4:Fair Value MeasurementsAssets and liabilities measured
97、 at fair value on a recurring basis(in millions):Fair Value Measurements at Reporting Date Using Balance atApril 2,2023Quoted Prices in ActiveMarkets for Identical Assets(Level 1)Significant OtherObservable Inputs(Level 2)Significant Unobservable Inputs(Level 3)Assets:Cash and cash equivalents$3,071
98、.8$3,071.8$Short-term investments:Available-for-sale debt securitiesCommercial paper0.1 0.1 Corporate debt securities53.2 53.2 U.S.government treasury securities5.4 5.4 Foreign government obligations3.8 3.8 Mortgage and other asset-backedsecurities0.7 0.7 Total available-for-sale debt securities63.2
99、 5.4 57.8 Structured deposits248.4 248.4 Marketable equity securities67.8 67.8 Total short-term investments379.4 73.2 306.2 Prepaid expenses and other current assets:Derivative assets24.2 24.2 Long-term investments:Available-for-sale debt securitiesCorporate debt securities101.0 101.0 Mortgage and o
100、ther asset-backedsecurities50.7 50.7 State and local government obligations1.3 1.3 U.S.government treasury securities98.2 98.2 Total long-term investments251.2 98.2 153.0 Other long-term assets:Derivative assets92.8 92.8 Total assets$3,819.4$3,243.2$576.2$Liabilities:Accrued liabilities:Derivative l
101、iabilities$22.6$22.6$Other long-term liabilities:Derivative liabilities42.8 42.8 Total liabilities$65.4$65.4$15Table of Contents Fair Value Measurements at Reporting Date Using Balance atOctober 2,2022Quoted Prices in ActiveMarkets for Identical Assets(Level 1)Significant OtherObservable Inputs(Leve
102、l 2)SignificantUnobservable Inputs(Level 3)Assets:Cash and cash equivalents$2,818.4$2,797.3$21.1$Short-term investments:Available-for-sale debt securitiesCorporate debt securities22.4 22.4 U.S.government treasury securities9.3 9.3 Total available-for-sale debt securities31.7 9.3 22.4 Structured depo
103、sits275.1 275.1 Marketable equity securities57.7 57.7 Total short-term investments364.5 67.0 297.5 Prepaid expenses and other current assets:Derivative assets75.1 75.1 Long-term investments:Available-for-sale debt securitiesCorporate debt securities134.7 134.7 Foreign government obligations3.8 3.8 M
104、ortgage and other asset-backedsecurities56.5 56.5 State and local government obligations1.3 1.3 U.S.government treasury securities82.8 82.8 Total long-term investments279.1 82.8 196.3 Other long-term assets:Derivative assets156.2 156.2 Total assets$3,693.3$2,947.1$746.2$Liabilities:Accrued liabiliti
105、es:Derivative liabilities$21.0$21.0$Other long-term liabilities:Derivative liabilities34.0 34.0 Total liabilities$55.0$55.0$There were no material transfers between levels and there was no significant activity within Level 3 instruments during the periods presented.The fair valuesof any financial in
106、struments presented above exclude the impact of netting assets and liabilities when a legally enforceable master netting agreement exists.Gross unrealized holding gains and losses on available-for-sale debt securities,structured deposits and marketable equity securities were not material as ofApril
107、2,2023 and October 2,2022.Assets and Liabilities Measured at Fair Value on a Nonrecurring BasisAssets and liabilities recognized or disclosed at fair value on the consolidated financial statements on a nonrecurring basis include items such as property,plantand equipment,ROU assets,goodwill and other
108、 intangible assets and other assets.These assets are measured at fair value if determined to be impaired.16Table of ContentsThe estimated fair value of our long-term debt based on the quoted market price(Level 2)is included at Note 8,Debt.There were no material fair valueadjustments during the two q
109、uarters ended April 2,2023 and April 3,2022.Note 5:Inventories(in millions):Apr 2,2023Oct 2,2022Coffee:Unroasted$944.2$1,018.6 Roasted279.4 310.3 Other merchandise held for sale376.1 430.9 Packaging and other supplies400.9 416.8 Total$2,000.6$2,176.6 Other merchandise held for sale includes,among ot
110、her items,serveware,food and tea.Inventory levels vary due to seasonality,commodity market supply andprice fluctuations.As of April 2,2023,we had committed to purchasing green coffee totaling$408.4 million under fixed-price contracts and an estimated$828.3 million underprice-to-be-fixed contracts.A
111、portion of our price-to-be-fixed contracts are effectively fixed through the use of futures.See Note 3,Derivative FinancialInstruments,for further discussion.Price-to-be-fixed contracts are purchase commitments whereby the quality,quantity,delivery period and other negotiatedterms are agreed upon,bu
112、t the date,and therefore the price,at which the base“C”coffee commodity price component will be fixed has not yet beenestablished.For most contracts,either Starbucks or the seller has the option to“fix”the base“C”coffee commodity price prior to the delivery date.For othercontracts,Starbucks and the
113、seller may agree upon pricing parameters determined by the base“C”coffee commodity price.Until prices are fixed,we estimatethe total cost of these purchase commitments.We believe,based on established relationships with our suppliers and continuous monitoring,the risk of non-delivery on these purchas
114、e commitments is remote.Note 6:Supplemental Balance Sheet and Statement of Earnings Information(in millions):Property,Plant and Equipment,netApr 2,2023Oct 2,2022Land$46.1$46.1 Buildings567.3 555.4 Leasehold improvements9,578.2 9,066.8 Store equipment3,179.2 3,018.2 Roasting equipment816.3 838.5 Furn
115、iture,fixtures and other1,609.4 1,526.1 Work in progress654.4 558.7 Property,plant and equipment,gross16,450.9 15,609.8 Accumulated depreciation(9,632.3)(9,049.3)Property,plant and equipment,net$6,818.6$6,560.5 Accrued LiabilitiesApr 2,2023Oct 2,2022Accrued occupancy costs$82.8$84.6 Accrued dividend
116、s payable607.8 608.3 Accrued capital and other operating expenditures686.3 878.1 Self-insurance reserves248.7 232.3 Income taxes payable150.6 139.2 Accrued business taxes193.8 194.6 Total accrued liabilities$1,970.0$2,137.1 17Table of ContentsStore Operating ExpensesQuarter EndedTwo Quarters EndedAp
117、r 2,2023Apr 3,2022Apr 2,2023Apr 3,2022Wages and benefits$2,174.3$2,018.3$4,389.9$4,029.0 Occupancy costs703.4 664.9 1,374.9 1,330.2 Other expenses758.3 631.5 1,536.5 1,355.4 Total store operating expenses$3,636.0$3,314.7$7,301.3$6,714.6 Note 7:Other Intangible Assets and GoodwillIndefinite-Lived Int
118、angible Assets(in millions)Apr 2,2023Oct 2,2022Trade names,trademarks and patents$79.7$97.5 Finite-Lived Intangible AssetsApr 2,2023Oct 2,2022(in millions)Gross CarryingAmountAccumulatedAmortizationNet CarryingAmountGross CarryingAmountAccumulatedAmortizationNet CarryingAmountAcquired and reacquired
119、 rights$1,025.9$(1,025.9)$990.0$(990.0)$Acquired trade secrets and processes27.6(27.6)27.6(27.3)0.3 Trade names,trademarks and patents130.9(82.6)48.3 124.6(69.6)55.0 Licensing agreements18.4(15.6)2.8 19.3(16.2)3.1 Other finite-lived intangible assets21.3(21.3)20.6(20.6)Total finite-lived intangible
120、assets$1,224.1$(1,173.0)$51.1$1,182.1$(1,123.7)$58.4 Amortization expense for finite-lived intangible assets was$5.3 million and$10.9 million for the quarter and two quarters ended April 2,2023,respectivelyand$49.2 million and$99.4 million for the quarter and two quarters ended April 3,2022,respecti
121、vely.Estimated future amortization expense as of April 2,2023(in millions):Fiscal YearTotal2023(excluding the two quarters ended April 2,2023)$10.3 202420.5 202514.5 20261.8 20271.5 Thereafter2.5 Total estimated future amortization expense$51.1 GoodwillChanges in the carrying amount of goodwill by r
122、eportable operating segment(in millions):North AmericaInternationalChannel DevelopmentCorporate and OtherTotalGoodwill balance at October 2,2022$491.1$2,756.7$34.7$1.0$3,283.5 Other0.3 128.5 128.8 Goodwill balance at April 2,2023$491.4$2,885.2$34.7$1.0$3,412.3“Other”consists of changes in the goodwi
123、ll balance resulting from foreign currency translation.(1)(1)18Table of ContentsNote 8:DebtRevolving Credit FacilityOur$3.0 billion unsecured five-year revolving credit facility(the“2021 credit facility”),of which$150 million may be used for issuances of letters of credit,iscurrently set to mature o
124、n September 16,2026.The 2021 credit facility is available for working capital,capital expenditures and other corporate purposes,including acquisitions and share repurchases.We have the option,subject to negotiation and agreement with the related banks,to increase the maximumcommitment amount by an a
125、dditional$1.0 billion.Borrowings under the 2021 credit facility bear interest at a variable rate based on LIBOR,and,for U.S.dollar-denominated loans under certain circumstances,a Base Rate(as defined in the 2021 credit facility),in each case plus an applicable margin.The applicable margin is based o
126、n the Companys long-term creditratings assigned by the Moodys and Standard&Poors rating agencies.The 2021 credit facility contains alternative interest rate provisions specifying ratecalculations to be used at such time LIBOR ceases to be available as a benchmark due to reference rate reform.The“Bas
127、e Rate”is the highest of(i)the FederalFunds Rate(as defined in the 2021 credit facility)plus 0.500%,(ii)Bank of Americas prime rate,and(iii)the Eurocurrency Rate(as defined in the 2021 creditfacility)plus 1.000%.On April 17,2023,Starbucks amended the 2021 credit facility to replace LIBOR with Term S
128、OFR(Secured Overnight Financing Rate)as a successor rate.Allother material terms and conditions of the 2021 credit facility were unchanged.Borrowings under the amended 2021 credit facility will bear interest at avariable rate based on Term SOFR,and,for U.S.dollar-denominated loans under certain circ
129、umstances,a Base Rate(as defined in the 2021 credit facility),ineach case plus an applicable margin.The applicable margin is based on the Companys long-term credit ratings assigned by the Moodys and Standard&Poors rating agencies.The“Base Rate”is the highest of(i)the Federal Funds Rate(as defined in
130、 the 2021 credit facility)plus 0.500%,(ii)Bank of Americasprime rate,and(iii)Term SOFR plus 1.000%.Term SOFR means the forward-looking SOFR term rate administrated by the Chicago Mercantile Exchange plusa SOFR Adjustment of 0.100%.The 2021 credit facility contains provisions requiring us to maintain
131、 compliance with certain covenants,including a minimum fixed charge coverage ratio,which measures our ability to cover financing expenses.As of April 2,2023,we were in compliance with all applicable covenants.No amounts wereoutstanding under our 2021 credit facility as of April 2,2023 or October 2,2
132、022.Short-term DebtUnder our commercial paper program,we may issue unsecured commercial paper notes up to a maximum aggregate amount outstanding at any time of$3.0billion,with individual maturities that may vary but not exceed 397 days from the date of issue.Amounts outstanding under the commercial
133、paper program arerequired to be backstopped by available commitments under our 2021 credit facility.The proceeds from borrowings under our commercial paper program maybe used for working capital needs,capital expenditures and other corporate purposes,including,but not limited to,business expansion,p
134、ayment of cashdividends on our common stock and share repurchases.As of April 2,2023,we had no borrowings outstanding under the program.As of October 2,2022,wehad$175.0 million in borrowings outstanding under this program.Additionally,we hold the following Japanese yen-denominated credit facilities
135、that are available for working capital needs and capital expenditures within ourJapanese market:A 5 billion,or$37.7 million,credit facility is currently set to mature on January 4,2024.Borrowings under this credit facility are subject to termsdefined within the facility and will bear interest at a v
136、ariable rate based on Tokyo Interbank Offered Rate(TIBOR)plus an applicable margin of0.400%.A 10 billion,or$75.4 million,credit facility is currently set to mature on March 27,2024.Borrowings under this credit facility are subject to termsdefined within the facility and will bear interest at a varia
137、ble rate based on TIBOR plus an applicable margin of 0.300%.As of April 2,2023,we had 7 billion,or$52.8 million,of borrowings outstanding under these credit facilities.As of October 2,2022,we had no borrowingsoutstanding under these credit facilities.19Table of ContentsLong-term DebtComponents of lo
138、ng-term debt including the associated interest rates and related estimated fair values by calendar maturity(in millions,except interest rates):Apr 2,2023Oct 2,2022Stated Interest RateEffective InterestRateIssuanceAmountEstimated FairValueAmountEstimated FairValueMarch 2023 notes$1,000.0$996.5 3.100%
139、3.107%October 2023 notes750.0 746.4 750.0 744.8 3.850%2.859%February 2024 notes500.0 497.0 500.0 497.3 5.147%5.378%March 2024 notes640.6 643.3 588.4 584.7 0.372%0.462%August 2025 notes1,250.0 1,230.2 1,250.0 1,209.6 3.800%3.721%February 2026 notes1,000.0 1,008.8 4.750%4.788%June 2026 notes500.0 469.
140、2 500.0 458.3 2.450%2.511%March 2027 notes500.0 455.1 500.0 437.9 2.000%2.058%March 2028 notes600.0 578.0 600.0 554.8 3.500%3.529%November 2028 notes750.0 731.6 750.0 704.7 4.000%3.958%August 2029 notes1,000.0 947.8 1,000.0 900.3 3.550%3.840%March 2030 notes750.0 647.3 750.0 607.7 2.250%3.084%Novemb
141、er 2030 notes1,250.0 1,087.3 1,250.0 1,017.9 2.550%2.582%February 2032 notes1,000.0 889.3 1,000.0 827.1 3.000%3.155%February 2033 notes500.0 508.8 4.800%3.798%June 2045 notes350.0 310.3 350.0 281.5 4.300%4.348%December 2047 notes500.0 403.7 500.0 369.6 3.750%3.765%November 2048 notes1,000.0 905.5 1,
142、000.0 824.6 4.500%4.504%August 2049 notes1,000.0 904.8 1,000.0 817.8 4.450%4.447%March 2050 notes500.0 374.2 500.0 342.0 3.350%3.362%November 2050 notes1,250.0 974.1 1,250.0 874.9 3.500%3.528%Total15,590.6 14,312.7 15,038.4 13,052.0 Aggregate debt issuance costs andunamortized premium/(discount),net
143、(120.2)(117.2)Hedge accounting fair value adjustment(36.9)(52.3)Total$15,433.5$14,868.9 Includes the effects of the amortization of any premium or discount and any gain or loss upon settlement of related treasury locks or forward-startinginterest rate swaps utilized to hedge interest rate risk prior
144、 to the debt issuance.Amount includes the change in fair value due to changes in benchmark interest rates related to hedging our October 2023 notes and$350 million of ourAugust 2029 notes.Refer to Note 3,Derivative Financial Instruments,for additional information on our interest rate swaps designate
145、d as fair value hedges.Floating rate notes which bear interest at a rate equal to Compounded SOFR(as defined in the February 2024 notes)plus 0.420%,resulting in a statedinterest rate of 5.147%at April 2,2023.Japanese yen-denominated long-term debt.(1)(2)(3)(4)(2)(2)(1)(2)(3)(4)20Table of ContentsThe
146、 following table summarizes our long-term debt maturities as of April 2,2023 by fiscal year(in millions):Fiscal YearTotal2023$750.0 20241,140.6 20251,250.0 20261,500.0 2027500.0 Thereafter10,450.0 Total$15,590.6 Note 9:LeasesThe components of lease costs(in millions):Quarter EndedTwo Quarters EndedA
147、pr 2,2023Apr 3,2022Apr 2,2023Apr 3,2022Operating lease costs$401.7$393.4$786.5$779.5 Variable lease costs253.9 235.8 489.2 465.6 Short-term lease costs7.0 7.1 14.0 14.2 Total lease costs$662.6$636.3$1,289.7$1,259.3 Includes immaterial amounts of sublease income and rent concessions.The following tab
148、le includes supplemental information(in millions):Two Quarters EndedApr 2,2023Apr 3,2022Cash paid related to operating lease liabilities$819.0$845.5 Operating lease liabilities arising from obtaining ROU assets828.0 710.6 Apr 2,2023Apr 3,2022Weighted-average remaining operating lease term8.5 years8.
149、5 yearsWeighted-average operating lease discount rate2.9%2.5%Finance lease assets are recorded in property,plant and equipment,net with the corresponding lease liabilities included in accrued liabilities and other long-term liabilities on the consolidated balance sheet.There were no material finance
150、 leases as of April 2,2023 and October 2,2022.Minimum future maturities of operating lease liabilities(in millions):Fiscal YearTotal2023(excluding the two quarters ended April 2,2023)$771.8 20241,522.4 20251,432.2 20261,279.2 20271,090.0 Thereafter4,183.1 Total lease payments10,278.7 Less imputed in
151、terest(1,255.7)Total$9,023.0 As of April 2,2023,we have entered into operating leases that have not yet commenced of$1.3 billion,primarily related to real estate leases.These leases willcommence between fiscal year 2023 and fiscal year 2029 with lease terms ranging from three to twenty years.(1)(1)2
152、1Table of ContentsNote 10:Deferred RevenueOur deferred revenue primarily consists of the prepaid royalty from Nestl,for which we have continuing performance obligations to support the Global CoffeeAlliance,our unredeemed stored value card liability and unredeemed loyalty points(“Stars”)associated wi
153、th our loyalty program.As of April 2,2023,the current and long-term deferred revenue related to Nestl was$177.0 million and$6.1 billion,respectively.As of October 2,2022,thecurrent and long-term deferred revenue related to the Nestl up-front payment was$177.0 million and$6.2 billion,respectively.Dur
154、ing the quarter and twoquarters ended April 2,2023,we recognized$44.1 million and$88.2 million of prepaid royalty revenue related to Nestl.During the quarter and two quartersended April 3,2022,we recognized$44.2 million and$88.4 million of prepaid royalty revenue related to Nestl.Changes in our defe
155、rred revenue balance related to our stored value cards and loyalty program(in millions):Quarter Ended April 2,2023TotalStored value cards and loyalty program at January 1,2023$2,025.6 Revenue deferred-card activations,card reloads and Stars earned3,416.0 Revenue recognized-card and Stars redemptions
156、 and breakage(3,778.4)Other1.3 Stored value cards and loyalty program at April 2,2023$1,664.5 Quarter Ended April 3,2022TotalStored value cards and loyalty program at January 2,2022$1,952.5 Revenue deferred-card activations,card reloads and Stars earned3,124.0 Revenue recognized-card and Stars redem
157、ptions and breakage(3,426.3)Other(5.0)Stored value cards and loyalty program at April 3,2022$1,645.2 Two Quarters Ended April 2,2023TotalStored value cards and loyalty program at October 2,2022$1,503.0 Revenue deferred-card activations,card reloads and Stars earned7,639.4 Revenue recognized-card and
158、 Stars redemptions and breakage(7,492.5)Other14.6 Stored value cards and loyalty program at April 2,2023$1,664.5 Two Quarters Ended April 3,2022TotalStored value cards and loyalty program at October 3,2021$1,448.5 Revenue deferred-card activations,card reloads and Stars earned7,041.5 Revenue recogni
159、zed-card and Stars redemptions and breakage(6,837.1)Other(7.7)Stored value cards and loyalty program at April 3,2022$1,645.2“Other”primarily consists of changes in the stored value cards and loyalty program balances resulting from foreign currency translation.As of April 2,2023 and April 3,2022,appr
160、oximately$1.6 billion and$1.5 billion of these amounts were current,respectively.(1)(2)(1)(2)(1)(2)(1)(2)(1)(2)22Table of ContentsNote 11:EquityChanges in AOCI by component,net of tax(in millions):Quarter Ended Available-for-SaleDebt Securities Cash Flow Hedges Net InvestmentHedgesTranslationAdjustm
161、ent andOtherTotalApril 2,2023Net gains/(losses)in AOCI,beginning of period$(13.9)$(34.9)$156.8$(646.9)$(538.9)Net gains/(losses)recognized in OCI beforereclassifications2.8(1.1)(2.0)74.7 74.4 Net(gains)/losses reclassified from AOCI to earnings0.2(52.1)(5.2)(57.1)Other comprehensive income/(loss)att
162、ributable toStarbucks3.0(53.2)(7.2)74.7 17.3 Net gains/(losses)in AOCI,end of period$(10.9)$(88.1)$149.6$(572.2)$(521.6)April 3,2022Net gains/(losses)in AOCI,beginning of period$(1.2)$224.6$77.1$(47.0)$253.5 Net gains/(losses)recognized in OCI beforereclassifications(7.9)52.9 28.5(38.5)35.0 Net(gain
163、s)/losses reclassified from AOCI to earnings0.1(25.8)(2.6)0.1(28.2)Other comprehensive income/(loss)attributable toStarbucks(7.8)27.1 25.9(38.4)6.8 Net gains/(losses)in AOCI,end of period$(9.0)$251.7$103.0$(85.4)$260.3 Two Quarters EndedAvailable-for-SaleDebt SecuritiesCash Flow HedgesNet Investment
164、HedgesTranslationAdjustment andOtherTotalApril 2,2023Net gains/(losses)in AOCI,beginning of period$(15.5)$199.0$209.1$(855.8)$(463.2)Net gains/(losses)recognized in OCI beforereclassifications4.3(152.3)(50.3)283.6 85.3 Net(gains)/losses reclassified from AOCI to earnings0.3(134.8)(9.2)(143.7)Other c
165、omprehensive income/(loss)attributable toStarbucks4.6(287.1)(59.5)283.6(58.4)Net gains/(losses)in AOCI,end of period$(10.9)$(88.1)$149.6$(572.2)$(521.6)April 3,2022Net gains/(losses)in AOCI,beginning of period$1.5$158.3$48.6$(61.2)$147.2 Net gains/(losses)recognized in OCI beforereclassifications(10
166、.5)129.8 59.5(24.3)154.5 Net(gains)/losses reclassified from AOCI to earnings(36.4)(5.1)0.1(41.4)Other comprehensive income/(loss)attributable toStarbucks(10.5)93.4 54.4(24.2)113.1 Net gains/(losses)in AOCI,end of period$(9.0)$251.7$103.0$(85.4)$260.3 23Table of ContentsImpact of reclassifications f
167、rom AOCI on the consolidated statements of earnings(in millions):Quarter EndedAOCIComponentsAmounts Reclassified from AOCIAffected Line Item inthe Statements of EarningsApr 2,2023Apr 3,2022Gains/(losses)on available-for-sale debt securities$(0.3)$(0.2)Interest income and other,netGains/(losses)on ca
168、sh flow hedges59.9 30.9 Please refer to Note 3,Derivative Financial Instrumentsfor additional information.Gains/(losses)on net investment hedges7.0 3.5 Interest expense66.6 34.2 Total before tax(9.5)(6.0)Tax expense$57.1$28.2 Net of taxTwo Quarters EndedAOCIComponentsAmounts Reclassified from AOCIAf
169、fected Line Item inthe Statements of EarningsApr 2,2023Apr 3,2022Gains/(losses)on available-for-sale debt securities$(0.4)$Interest income and other,netGains/(losses)on cash flow hedges153.1 43.4 Please refer to Note 3,Derivative Financial Instrumentsfor additional information.Gains/(losses)on net i
170、nvestment hedges12.3 6.9 Interest expense165.0 50.3 Total before tax(21.3)(8.9)Tax expense$143.7$41.4 Net of taxIn addition to 2.4 billion shares of authorized common stock with$0.001 par value per share,the Company has authorized 7.5 million shares of preferred stock,none of which was outstanding a
171、s of April 2,2023.During the two quarters ended April 2,2023 and April 3,2022,we repurchased 4.9 million and 36.3 million shares of common stock for$495.3 million and$4,013.0 million,respectively.As of April 2,2023,47.7 million shares remained available for repurchase under current authorizations.Du
172、ring the second quarter of fiscal 2023,our Board of Directors approved a quarterly cash dividend to shareholders of$0.53 per share to be paid on May 26,2023 to shareholders of record as of the close of business on May 12,2023.Note 12:Employee Stock PlansAs of April 2,2023,there were 92.3 million sha
173、res of common stock available for issuance pursuant to future equity-based compensation awards and 10.5million shares available for issuance under our employee stock purchase plan.Stock-based compensation expense recognized in the consolidated statements of earnings(in millions):Quarter EndedTwo Qua
174、rters Ended Apr 2,2023Apr 3,2022Apr 2,2023Apr 3,2022Restricted Stock Units(“RSUs”)$74.1$54.1$159.2$149.8 Options0.0(0.6)0.1(0.5)Total stock-based compensation expense$74.1$53.5$159.3$149.3 Stock option and RSU transactions from October 2,2022 through April 2,2023(in millions):Stock OptionsRSUsOption
175、s outstanding/Nonvested RSUs,October 2,20224.1 7.0 Granted 4.1 Options exercised/RSUs vested(1.9)(2.7)Forfeited/expired(0.6)Options outstanding/Nonvested RSUs,April 2,20232.2 7.8 Total unrecognized stock-based compensation expense,net of estimated forfeitures,as of April 2,2023$278.5 24Table of Cont
176、entsNote 13:Earnings per ShareCalculation of net earnings per common share(“EPS”)basic and diluted(in millions,except EPS):Quarter EndedTwo Quarters EndedApr 2,2023Apr 3,2022Apr 2,2023Apr 3,2022Net earnings attributable to Starbucks$908.3$674.5$1,763.6$1,490.4 Weighted average common shares outstand
177、ing(for basiccalculation)1,148.5 1,149.2 1,148.4 1,159.4 Dilutive effect of outstanding common stock options andRSUs4.2 4.7 4.4 5.8 Weighted average common and common equivalent sharesoutstanding(for diluted calculation)1,152.7 1,153.9 1,152.8 1,165.2 EPS basic$0.79$0.59$1.54$1.29 EPS diluted$0.79$0
178、.58$1.53$1.28 Potential dilutive shares consist of the incremental common shares issuable upon the exercise of outstanding stock options(both vested and non-vested)andunvested RSUs,calculated using the treasury stock method.The calculation of dilutive shares outstanding excludes anti-dilutive stock
179、options or unvestedRSUs,which were immaterial in the periods presented.Note 14:Commitments and ContingenciesLegal ProceedingsIn 2010 and 2011,an organization named Council for Education and Research on Toxics(“Plaintiff”)filed lawsuits in the Superior Court of the State ofCalifornia,County of Los An
180、geles,against the Company and other companies who manufacture,package,distribute or sell brewed coffee.The suits were laterconsolidated into a single action.Plaintiff alleged that the Company and the other defendants failed to provide warnings for their coffee products of exposure tothe chemical acr
181、ylamide as required under California Health and Safety Code section 25249.5,the California Safe Drinking Water and Toxic Enforcement Actof 1986,better known as Proposition 65.In 2020,the trial court granted defendants motion for summary judgment,which was affirmed by the CaliforniaCourt of Appeal.Th
182、e California Supreme Court denied Plaintiffs petition for review on February 15,2023,concluding the matter.Starbucks is involved in various other legal proceedings arising in the ordinary course of business,including certain employment litigation cases that have beencertified as class or collective
183、actions,but is not currently a party to any legal proceeding that management believes could have a material adverse effect on ourconsolidated financial position,results of operations or cash flows.Note 15:Segment ReportingSegment information is prepared on the same basis that our chief executive off
184、icer,who is our chief operating decision maker,manages the segments,evaluatesfinancial results and makes key operating decisions.Consolidated revenue mix by product type(in millions):Quarter EndedTwo Quarters EndedApr 2,2023Apr 3,2022Apr 2,2023Apr 3,2022Beverage$5,226.9 60%$4,599.0 60%$10,401.4 60%$
185、9,497.4 60%Food1,590.9 18%1,364.3 18%3,157.0 18%2,798.9 18%Other1,902.0 22%1,672.3 22%3,875.4 22%3,389.7 22%Total$8,719.8 100%$7,635.6 100%$17,433.8 100%$15,686.0 100%Beverage represents sales within our company-operated stores.Food includes sales within our company-operated stores.Other primarily c
186、onsists of packaged and single-serve coffees and teas,royalty and licensing revenues,beverage-related ingredients,serveware and ready-to-drink beverages,among other items.(1)(2)(3)(1)(2)(3)25Table of ContentsThe tables below present financial information for our reportable operating segments and Cor
187、porate and Other segment(in millions):Quarter EndedNorth AmericaInternationalChannelDevelopmentCorporate andOtherTotalApril 2,2023Total net revenues$6,380.6$1,854.8$480.7$3.7$8,719.8 Depreciation and amortization expenses226.3 86.3 0.0 29.3 341.9 Income from equity investees 0.8 50.6 51.4 Operating
188、income/(loss)1,217.9 314.7 262.1(467.2)1,327.5 April 3,2022Total net revenues$5,445.7$1,702.4$463.1$24.4$7,635.6 Depreciation and amortization expenses202.0 133.4 32.3 367.7 Income from equity investees 0.6 48.5 49.1 Operating income/(loss)931.5 180.7 197.9(361.2)948.9 Two Quarters EndedNorth Americ
189、aInternationalChannelDevelopmentCorporate andOtherTotalApril 2,2023Total net revenues$12,931.8$3,534.9$958.9$8.2$17,433.8 Depreciation and amortization expenses443.1 167.7 0.1 58.1 669.0 Income from equity investees 1.2 108.0 109.2 Operating income/(loss)2,430.4 555.1 488.4(893.2)2,580.7 April 3,202
190、2Total net revenues$11,178.0$3,578.4$880.1$49.5$15,686.0 Depreciation and amortization expenses402.1 266.5 65.2 733.8 Income from equity investees 1.3 88.1 89.4 Operating income/(loss)2,014.6 480.3 381.1(749.3)2,126.7 26Table of ContentsItem 2.Managements Discussion and Analysis of Financial Conditi
191、on and Results of OperationsCAUTIONARY STATEMENT PURSUANT TO THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995Certain statements contained herein are“forward-looking”statements within the meaning of applicable securities laws and regulations.Generally,thesestatements can be identified by the use
192、of words such as“aim,”“anticipate,”“believe,”“continue,”“could,”“estimate,”“expect,”“feel,”“forecast,”“intend,”“may,”“outlook,”“plan,”“potential,”“predict,”“project,”“seek,”“should,”“will,”“would,”and similar expressions intended to identifyforward-looking statements,although not all forward-looking
193、 statements contain these identifying words.These statements include statements relating to trendsin,or expectations relating to,the effects of our existing and any future initiatives,strategies,investments and plans,including our Reinvention Plan,as well astrends in,or expectations regarding,our fi
194、nancial results and long-term growth model and drivers;our operations in the U.S.and China;our environmental,social and governance efforts;our partners;economic and consumer trends,including the impact of inflationary pressures;impact of foreign currencytranslation;strategic pricing actions;the conv
195、ersion of certain market operations to fully licensed models;our plans for streamlining our operations,including store openings,closures and changes in store formats and models;the success of our licensing relationship with Nestl,of our consumer packagedgoods and foodservice business and its effects
196、 on our Channel Development segment results;tax rates;business opportunities,expansions and new initiatives,including Starbucks Odyssey;strategic acquisitions;our dividends programs;commodity costs and our mitigation strategies;our liquidity,cash flow fromoperations,investments,borrowing capacity an
197、d use of proceeds;continuing compliance with our covenants under our credit facilities and commercial paperprogram;repatriation of cash to the U.S.;the likelihood of the issuance of additional debt and the applicable interest rate;the continuing impact of theCOVID-19 pandemic or other public health
198、events on our financial results;our ceo transition;our share repurchase program;our use of cash and cashrequirements;the expected effects of new accounting pronouncements and the estimated impact of changes in U.S.tax law,including on tax rates,investmentsfunded by these changes and potential outcom
199、es;and effects of legal proceedings.Such statements are based on currently available operating,financial andcompetitive information and are subject to various risks and uncertainties.Actual future results and trends may differ materially depending on a variety offactors,including,but not limited to:
200、the continuing impact of COVID-19 on our business;regulatory measures or voluntary actions that may be put in place tolimit the spread of COVID-19,including restrictions on business operations or social distancing requirements,and the duration and efficacy of suchrestrictions;the resurgence of COVID
201、-19 infections and the circulation of novel variants of COVID-19;fluctuations in U.S.and international economies andcurrencies;our ability to preserve,grow and leverage our brands;the ability of our business partners and third-party providers to fulfill their responsibilitiesand commitments;potentia
202、l negative effects of incidents involving food or beverage-borne illnesses,tampering,adulteration,contamination or mislabeling;potential negative effects of material breaches of our information technology systems to the extent we experience a material breach;material failures of ourinformation techn
203、ology systems;costs associated with,and the successful execution of,the Companys initiatives and plans;new initiatives and plans orrevisions to existing initiatives or plans;our ability to obtain financing on acceptable terms;the acceptance of the Companys products by our customers,evolving consumer
204、 preferences and tastes and changes in consumer spending behavior;partner investments,changes in the availability and cost of laborincluding any union organizing efforts and our responses to such efforts;failure to attract or retain key executive or employee talent or successfully transitionexecutiv
205、es;significant increased logistics costs;inflationary pressures;the impact of competition;inherent risks of operating a global business including anypotential negative effects stemming from the Russian invasion of Ukraine;the prices and availability of coffee,dairy and other raw materials;the effect
206、 oflegal proceedings;and the effects of changes in tax laws and related guidance and regulations that may be implemented,including the Inflation Reduction Actof 2022 and other risks detailed in our filings with the SEC,including in the Risk Factors”and“Managements Discussion and Analysis of Financia
207、lCondition and Results of Operations”sections of the companys most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings.A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances,and those future events or circumstances may not
208、occur.You should not place undue reliance on the forward-looking statements,which speak only as of the date of this report.We are under no obligation to update oralter any forward-looking statements,whether as a result of new information,future events or otherwise.This information should be read in
209、conjunction with the consolidated financial statements and the notes included in Item 1 of Part I of this 10-Q and the auditedconsolidated financial statements and notes,and Managements Discussion and Analysis of Financial Condition and Results of Operations(“MD&A”),contained in the 10-K filed with
210、the SEC on November 18,2022.Introduction and OverviewStarbucks is the premier roaster,marketer and retailer of specialty coffee in the world,operating in 84 markets.As of April 2,2023,Starbucks had more than36,600 company-operated and licensed stores,an increase of 6%from the prior year.Additionally
211、,we sell a variety of consumer-packaged goods,primarilythrough the Global Coffee Alliance established with Nestl and other partnerships and joint ventures.27Table of ContentsWe have three reportable operating segments:1)North America,which is inclusive of the U.S.and Canada,2)International,which is
212、inclusive of China,Japan,Asia Pacific,Europe,Middle East,Africa,Latin America and the Caribbean;and 3)Channel Development.Non-reportable operating segments and unallocatedcorporate expenses are reported within Corporate and Other.We believe our financial results and long-term growth model will conti
213、nue to be driven by new store openings,comparable store sales growth and operatingmargin management,underpinned by disciplined capital allocation.We believe these key operating metrics are useful to investors because management usesthese metrics to assess the growth of our business and the effective
214、ness of our marketing and operational strategies.Throughout this MD&A,we commonlydiscuss the following key operating metrics:New store openings and store countComparable store sales growthOperating marginComparable store sales growth represents the percentage change in sales in one period from the s
215、ame prior year period for company-operated stores open for13 months or longer and exclude the impact of foreign currency translation.We analyze comparable store sales growth on a constant currency basis as thishelps identify underlying business trends,without distortion from the effects of currency
216、movements.Stores that are temporarily closed or operating at reducedhours due to the COVID-19 pandemic remain in comparable store sales while stores identified for permanent closure have been removed.Our fiscal year ends on the Sunday closest to September 30.Fiscal 2023 and 2022 included 52 weeks.Al
217、l references to store counts,including data for newstore openings,are reported net of store closures,unless otherwise noted.Starbucks results for the second quarter of fiscal 2023 demonstrate the overall strength of our brand.Consolidated net revenues increased 14%to$8.7 billion inthe second quarter
218、 of fiscal 2023 compared to$7.6 billion in the second quarter of fiscal 2022,primarily driven by strength in our U.S.business and growth inour international licensed markets and the beginning of a recovery from COVID-19 pandemic-related business interruptions in China.During the quarter endedApril 2
219、,2023,our global comparable store sales grew 11%,primarily driven by 12%growth in the U.S.market and 7%growth internationally,as evidenced bythe strength of the Starbucks brand in global markets.Consolidated operating margin increased 280 basis points from the prior year to 15.2%,primarily drivenby
220、sales leverage,pricing,productivity improvement and the gain from sale of our Seattles Best Coffee brand.These were partially offset by previously-committed investments in labor,including enhancements in retail store partner wages and benefits,increased general and administrative costs related to ou
221、rReinvention Plan and higher supply chain costs driven by inflationary pressures.We anticipate continued recovery in China,coupled with sales leverage,pricing and productivity gains from the Reinvention Plan,will position us to meet ourexpected financial results in the remainder of the fiscal year.A
222、bsent significant and prolonged COVID-19 relapses or global economic disruptions,we believeour strategy will result in sustainable and profitable growth over the long-term.Results of Operations(in millions)Revenues Quarter EndedTwo Quarters EndedApr 2,2023Apr 3,2022$Change%ChangeApr 2,2023Apr 3,2022
223、$Change%ChangeCompany-operated stores$7,142.3$6,276.7$865.6 13.8%$14,225.7$12,999.1$1,226.6 9.4%Licensed stores1,069.5 849.5 220.0 25.9 2,189.0 1,700.3 488.7 28.7 Other508.0 509.4(1.4)(0.3)1,019.1 986.6 32.5 3.3 Total net revenues$8,719.8$7,635.6$1,084.2 14.2%$17,433.8$15,686.0$1,747.8 11.1%For the
224、quarter ended April 2,2023 compared with the quarter ended April 3,2022Total net revenues for the second quarter of fiscal 2023 increased$1.1 billion,primarily due to higher revenues from company-operated stores($866 million).The growth of company-operated stores revenue was driven by an 11%increase
225、 in comparable store sales($669 million),attributable to a 6%increase incomparable transactions and a 4%increase in average ticket.Also contributing was incremental revenues from 1,114 net new Starbucks company-operatedstores,or a 6%increase,over the past 12 months($312 million).Partially offsetting
226、 these increases was unfavorable foreign currency translation($163million).Licensed stores revenue increased$220 million contributing to the increase in total net revenues,driven by higher product and equipment sales to and royaltyrevenues from our licensees($233 million).Partially offsetting this i
227、ncrease was unfavorable foreign currency translation($21 million).28Table of ContentsFor the two quarters ended April 2,2023 compared with the two quarters ended April 3,2022Total net revenues for the first two quarters of fiscal 2023 increased$1.7 billion,primarily due to higher revenues from compa
228、ny-operated stores($1.2 billion).The growth of company-operated stores revenue was driven by a 8%increase in comparable store sales($1.0 billion)attributed to a 6%increase in averageticket and a 2%increase in transactions.Also contributing to the increase were incremental revenues from 1,114 net new
229、 Starbuckscompany-operated stores,or a 6%increase,over the past 12 months($571 million).Partially offsetting these increases was unfavorable foreign currency translation($388 million).Licensed stores revenue increased$489 million contributing to the increase in total net revenues,driven by higher pr
230、oduct and equipment sales to and royaltyrevenues from our licensees($532 million).Partially offsetting this increase was unfavorable foreign currency translation($57 million).Other revenues increased$33 million,primarily due to higher product sales and royalty revenue in the Global Coffee Alliance($
231、63 million),partially offset bythe absence of revenues from the Evolution Fresh business following its sale in the fourth quarter of fiscal 2022($37 million).Operating Expenses Quarter EndedTwo Quarters EndedApr 2,2023Apr 3,2022$ChangeApr 2,2023Apr 3,2022Apr 2,2023Apr 3,2022$ChangeApr 2,2023Apr 3,20
232、22As a%ofTotal Net RevenuesAs a%ofTotal Net RevenuesProduct and distributioncosts$2,801.7$2,465.8$335.9 32.1%32.3%$5,611.9$4,992.7$619.2 32.2%31.8%Store operating expenses3,636.0 3,314.7 321.3 41.7 43.4 7,301.3 6,714.6 586.7 41.9 42.8 Other operating expenses126.2 101.7 24.5 1.4 1.3 255.4 203.4 52.0
233、 1.5 1.3 Depreciation andamortization expenses341.9 367.7(25.8)3.9 4.8 669.0 733.8(64.8)3.8 4.7 General andadministrative expenses620.4 481.5 138.9 7.1 6.3 1,201.3 1,007.3 194.0 6.9 6.4 Restructuring andimpairments8.8 4.4 4.4 0.1 0.1 14.7(3.1)17.8 0.1 0.0 Total operating expenses7,535.0 6,735.8 799.
234、2 86.4 88.2%15,053.6 13,648.7 1,404.9 86.3 87.0 Income from equityinvestees51.4 49.1 2.3 0.6 0.6 109.2 89.4 19.8 0.6 0.6 Gain from sale of assets91.3 91.3 1.0 nm91.3 91.3 0.5 nmOperating income1,327.5 948.9 378.6 15.2 12.4%2,580.7 2,126.7 454.0 14.8 13.6 Store operating expenses as a%of company-oper
235、ated stores revenue50.9%52.8%51.3%51.7%For the quarter ended April 2,2023 compared with the quarter ended April 3,2022Product and distribution costs as a percentage of total net revenues decreased 20 basis points for the second quarter of fiscal 2023,primarily due to pricing(approximately 120 basis
236、points),partially offset by higher supply chain costs driven by inflationary pressures(approximately 100 basis points).Store operating expenses as a percentage of total net revenues decreased 170 basis points for the second quarter of fiscal 2023.Store operating expenses as apercentage of company-op
237、erated stores revenue decreased 190 basis points,primarily due to sales leverage(approximately 260 basis points),pricing(approximately 160 basis points)and productivity improvement(approximately 160 basis points).These were partially offset by previously-committedinvestments in labor,including enhan
238、cements in retail store partner wages and benefits(approximately 340 basis points).Other operating expenses increased$25 million for the second quarter of fiscal 2023,primarily due to higher support costs for our growing licensed markets($9 million)and strategic investments in technology and other i
239、nitiatives($6 million).29Table of ContentsDepreciation and amortization expenses as a percentage of total net revenues decreased 90 basis points,primarily due to lapping amortization expenses ofacquisition-related intangibles assets that are now fully amortized.General and administrative expenses in
240、creased$139 million,primarily due to incremental investments in technology($36 million),higher performance-basedcompensation($30 million),increased support costs of strategic initiatives including the Reinvention Plan($18 million),a donation to the StarbucksFoundation($15 million)and higher partner
241、wages and benefits($13 million).Gain from sale of assets includes the sale of our Seattles Best Coffee brand to Nestl in the second quarter of fiscal 2023.The combination of these changes resulted in an overall increase in operating margin of 280 basis points for the second quarter of fiscal 2023.Fo
242、r the two quarters ended April 2,2023 compared with the two quarters ended April 3,2022Product and distribution costs as a percentage of total net revenues increased 40 basis points for the first two quarters of fiscal 2023,primarily due to highersupply chain costs driven by inflationary pressures(a
243、pproximately 130 basis points)and business mix shift(approximately 60 basis points),partially offset bypricing(approximately 160 basis points).Store operating expenses as a percentage of total net revenues decreased 90 basis points for the first two quarters of fiscal 2023.Store operating expenses a
244、s apercentage of company-operated stores revenue decreased 40 basis points,primarily due to pricing(approximately 210 basis points),sales leverage(approximately 120 basis points)and productivity improvement(approximately 110 basis points).These were partially offset by previously-committedinvestment
245、s in labor,including enhancements in retail store partner wages and benefits(approximately 340 basis points).Other operating expenses increased$52 million for the first two quarters of fiscal 2023,primarily due to higher support costs for our growing licensed markets($17 million)and strategic invest
246、ments in technology and other initiatives($13 million).Depreciation and amortization expenses as a percentage of total net revenues decreased 90 basis points,primarily due to lapping amortization expenses ofacquisition-related intangibles assets that are now fully amortized.General and administrativ
247、e expenses increased$194 million,primarily due to incremental investments in technology($64 million),increased support costs toaddress labor market conditions and leadership training($28 million),higher performance-based compensation($24 million),increased support costs ofstrategic initiatives inclu
248、ding the Reinvention Plan($24 million)and higher partner wages and benefits($20 million).Income from equity investees increased$20 million,primarily due to higher income from our North American Coffee Partnership joint venture.Gain from sale of assets includes the sale of our Seattles Best Coffee br
249、and to Nestl in the second quarter of fiscal 2023.The combination of these changes resulted in an overall increase in operating margin of 120 basis points for the first two quarters of fiscal 2023.30Table of ContentsOther Income and Expenses Quarter EndedTwo Quarters EndedApr 2,2023Apr 3,2022$Change
250、Apr 2,2023Apr 3,2022Apr 2,2023Apr 3,2022$ChangeApr 2,2023Apr 3,2022As a%of TotalNet RevenuesAs a%of TotalNet RevenuesOperating income$1,327.5$948.9$378.6 15.2%12.4%$2,580.7$2,126.7$454.0 14.8%13.6%Interest income and other,net18.4 46.3(27.9)0.2 0.6 30.0 46.2(16.2)0.2 0.3 Interest expense(136.3)(119.
251、1)(17.2)(1.6)(1.6)(266.0)(234.4)(31.6)(1.5)(1.5)Earnings before incometaxes1,209.6 876.1 333.5 13.9 11.5 2,344.7 1,938.5 406.2 13.4 12.4 Income tax expense301.3 201.1 100.2 3.5 2.6 581.1 447.4 133.7 3.3 2.9 Net earnings includingnoncontrolling interests908.3 675.0 233.3 10.4 8.8 1,763.6 1,491.1 272.
252、5 10.1 9.5 Net earningsattributable tononcontrolling interests 0.5(0.5)0.7(0.7)Net earningsattributable toStarbucks$908.3$674.5$233.8 10.4%8.8%$1,763.6$1,490.4$273.2 10.1%9.5%Effective tax rate includingnoncontrolling interests24.9%23.0%24.8%23.1%For the quarter ended April 2,2023 compared with the
253、quarter ended April 3,2022Interest income and other,net decreased$28 million,primarily due to lapping higher investment gains in the prior year.Interest expense increased$17 million,primarily due to additional interest incurred on floating rate debt.The effective tax rate for the quarter ended April
254、 2,2023 was 24.9%compared to 23.0%for the same period in fiscal 2022.The increase was primarily due tolapping a beneficial return-to-provision adjustment recorded related to the divestiture of certain joint venture operations(approximately 260 basis points).For the two quarters ended April 2,2023 co
255、mpared with the two quarters ended April 3,2022Interest income and other,net decreased$16 million,primarily due to lapping higher investment gains in the prior year.Interest expense increased$32 million,primarily due to additional interest incurred on floating rate debt.The effective tax rate for th
256、e first two quarters ended April 2,2023 was 24.8%compared to 23.1%for the same period in fiscal 2022.The increase wasprimarily due to lapping a beneficial return-to-provision adjustment recorded related to the divestiture of certain joint venture operations(approximately 120basis points)and a decrea
257、se in stock-based compensation excess tax benefits(approximately 80 basis points).31Table of ContentsSegment InformationResults of operations by segment(in millions):North America Quarter EndedTwo Quarters EndedApr 2,2023Apr 3,2022$ChangeApr 2,2023Apr 3,2022Apr 2,2023Apr 3,2022$ChangeApr 2,2023Apr 3
258、,2022As a%of North AmericaTotal Net RevenuesAs a%of North AmericaTotal Net RevenuesNet revenues:Company-operatedstores$5,742.7$4,936.3$806.4 90.0%90.6%$11,613.2$10,150.4$1,462.8 89.8%90.8%Licensed stores637.4 507.0 130.4 10.0 9.3 1,317.4 1,022.9 294.5 10.2 9.2 Other0.5 2.4(1.9)0.0 0.0 1.2 4.7(3.5)0.
259、0 0.0 Total net revenues6,380.6 5,445.7 934.9 100.0 100.0 12,931.8 11,178.0 1,753.8 100.0 100.0 Product and distributioncosts1,821.7 1,564.0 257.7 28.6 28.7 3,739.3 3,193.4 545.9 28.9 28.6 Store operating expenses2,951.6 2,625.4 326.2 46.3 48.2 5,983.0 5,327.7 655.3 46.3 47.7 Other operating expense
260、s63.4 47.1 16.3 1.0 0.9 128.9 95.3 33.6 1.0 0.9 Depreciation andamortization expenses226.3 202.0 24.3 3.5 3.7 443.1 402.1 41.0 3.4 3.6 General andadministrative expenses91.2 71.3 19.9 1.4 1.3 193.5 148.0 45.5 1.5 1.3 Restructuring andimpairments8.5 4.4 4.1 0.1 0.1 13.6(3.1)16.7 0.1 0.0 Total operati
261、ng expenses5,162.7 4,514.2 648.5 80.9 82.9 10,501.4 9,163.4 1,338.0 81.2 82.0 Operating income$1,217.9$931.5$286.4 19.1%17.1%$2,430.4$2,014.6$415.8 18.8%18.0%Store operating expenses as a%ofcompany-operated stores revenue51.4%53.2%51.5%52.5%For the quarter ended April 2,2023 compared with the quarte
262、r ended April 3,2022RevenuesNorth America total net revenues for the second quarter of fiscal 2023 increased$935 million,or 17%,primarily due to a 12%increase in comparable storesales($584 million)driven by a 6%increase in transactions and a 5%increase in average ticket.Also contributing to these in
263、creases were the performance ofnet new company-operated store openings over the past 12 months($205 million)and higher product and equipment sales to and royalty revenues from ourlicensees($122 million).Operating MarginNorth America operating income for the second quarter of fiscal 2023 increased 31
264、%to$1.2 billion,compared to$0.9 billion in the second quarter of fiscal2022.Operating margin increased 200 basis points to 19.1%,primarily due to pricing(approximately 320 basis points)and sales leverage(approximately 270basis points).Also contributing were productivity improvement(approximately 170
265、 basis points)and lower COVID-19 pandemic related catastrophe pay forstore partners(approximately 120 basis points).These increases were partially offset by previously-committed investments in labor,including enhancements inretail store partner wages and benefits(approximately 360 basis points)and i
266、nflationary pressures on commodities and our supply chain(approximately 120basis points).32Table of ContentsFor the two quarters ended April 2,2023 compared with the two quarters ended April 3,2022RevenuesNorth America total net revenues for the first two quarters of fiscal 2023 increased$1.8 billio
267、n,or 16%,primarily due to a 11%increase in comparable storesales($1.1 billion)driven by a 7%increase in average ticket and a 4%increase in transactions.Also contributing to these increases were net new company-operated store openings over the past 12 months($388 million)and higher product and equipm
268、ent sales to and royalty revenues from our licensees($282million).Operating MarginNorth America operating income for the first two quarters of fiscal 2023 increased 21%to$2.4 billion,compared to$2.0 billion for the same period in fiscal2022.Operating margin increased 80 basis points to 18.8%,primari
269、ly due to pricing(approximately 420 basis points)and sales leverage(approximately 230basis points).Also contributing was productivity improvement(approximately 120 basis points).These increases were partially offset by previously-committedinvestments in labor,including enhancements in retail store p
270、artner wages and benefits(approximately 380 basis points)and inflationary pressures oncommodities and our supply chain(approximately 170 basis points).International Quarter EndedTwo Quarters Ended Apr 2,2023Apr 3,2022$ChangeApr 2,2023Apr 3,2022Apr 2,2023Apr 3,2022$ChangeApr 2,2023Apr 3,2022As a%of I
271、nternationalTotal Net RevenuesAs a%of InternationalTotal Net RevenuesNet revenues:Company-operatedstores$1,399.6$1,340.4$59.2 75.5%78.7%$2,612.5$2,848.7$(236.2)73.9%79.6%Licensed stores432.1 342.5 89.6 23.3 20.1 871.6 677.4 194.2 24.7 18.9 Other23.1 19.5 3.6 1.2 1.1 50.8 52.3(1.5)1.4 1.5 Total net r
272、evenues1,854.8 1,702.4 152.4 100.0 100.0 3,534.9 3,578.4(43.5)100.0 100.0 Product and distributioncosts632.9 580.5 52.4 34.1 34.1 1,226.5 1,196.4 30.1 34.7 33.4 Store operating expenses684.4 689.3(4.9)36.9 40.5 1,318.3 1,386.9(68.6)37.3 38.8 Other operating expenses49.9 39.5 10.4 2.7 2.3 100.6 78.7
273、21.9 2.8 2.2 Depreciation andamortization expenses86.3 133.4(47.1)4.7 7.8 167.7 266.5(98.8)4.7 7.4 General andadministrative expenses87.4 79.6 7.8 4.7 4.7 167.9 170.9(3.0)4.7 4.8 Total operating expenses1,540.9 1,522.3 18.6 83.1 89.4 2,981.0 3,099.4(118.4)84.3 86.6 Income from equityinvestees0.8 0.6
274、 0.2 1.2 1.3(0.1)Operating income$314.7$180.7$134.0 17.0%10.6%$555.1$480.3$74.8 15.7%13.4%Store operating expenses as a%of company-operated stores revenue48.9%51.4%50.5%48.7%For the quarter ended April 2,2023 compared with the quarter ended April 3,2022RevenuesInternational total net revenues for th
275、e second quarter of fiscal 2023 increased$152 million,or 9%,primarily due to higher product and equipment sales to androyalty revenues from our licensees($111 million),721 net new company-operated store openings,or a 10%increase,over the past 12 months($107 million).Also contributing was a 7%increas
276、e in comparable store sales($85 million),driven by a 7%increase in customer transactions,primarily attributable tobusiness recovery from COVID-19 pandemic related disruptions in China.These increases were partially offset by unfavorable foreign currency translation($163 million).33Table of ContentsO
277、perating MarginInternational operating income for the second quarter of fiscal 2023 increased 74%to$315 million,compared to$181 million in the second quarter of fiscal2022.Operating margin increased 640 basis points to 17.0%,primarily due to sales leverage(approximately 470 basis points)and lapping
278、amortizationexpenses of acquisition-related intangibles assets that are now fully amortized(approximately 250 basis points).These decreases were partially offset by higherpartner wages and benefits(approximately 100 basis points).For the two quarters ended April 2,2023 compared with the two quarters
279、 ended April 3,2022RevenuesInternational total net revenues for the first two quarters of fiscal 2023 decreased$44 million,or 1%,primarily due to unfavorable foreign currency translation($399 million),as well as a 3%decline in comparable store sales($85 million),driven by a 3%decrease in customer tr
280、ansactions primarily due to COVID-19pandemic related disruptions in China during the first quarter of fiscal 2023.These were partially offset by higher product and equipment sales to and royaltyrevenues from our licensees($250 million),as well as 721 net new company-operated store openings,or a 10%i
281、ncrease,over the past 12 months($183million).Operating MarginInternational operating income for the first two quarters of fiscal 2023 increased 16%to$555 million,compared to$480 million for the same period in fiscal2022.Operating margin increased 230 basis points to 15.7%,primarily due to lapping am
282、ortization expenses of acquisition-related intangibles assets that arenow fully amortized(approximately 240 basis points)and sales leverage across markets outside of China(approximately 190 basis points).These increaseswere partially offset by sales deleverage related to COVID-19 pandemic related im
283、pacts in our China market during the first quarter of fiscal 2023(approximately 160 basis points)and higher partner wages and benefits(approximately 100 basis points).34Table of ContentsChannel Development Quarter EndedTwo Quarters Ended Apr 2,2023Apr 3,2022$ChangeApr 2,2023Apr 3,2022Apr 2,2023Apr 3
284、,2022$ChangeApr 2,2023Apr 3,2022As a%of ChannelDevelopmentTotal Net RevenuesAs a%of ChannelDevelopmentTotal Net RevenuesNet revenues$480.7$463.1$17.6$958.9$880.1$78.8 Product and distribution costs345.6 300.5 45.1 71.9%64.9%639.8 559.3 80.5 66.7%63.5%Other operating expenses12.8 10.7 2.1 2.7 2.3 25.
285、8 22.0 3.8 2.7 2.5 General and administrativeexpenses2.1 2.5(0.4)0.4 0.5 4.1 5.8(1.7)0.4 0.7 Total operating expenses360.5 313.7 46.8 75.0 67.7 669.8 587.1 82.7 69.9 66.7 Income from equity investees50.6 48.5 2.1 10.5 10.5 108.0 88.1 19.9 11.3 10.0 Gain from sale of assets91.3 91.3 19.0 nm91.3 91.3
286、9.5%nmOperating income$262.1$197.9$64.2 54.5%42.7%$488.4$381.1$107.3 50.9%43.3%For the quarter ended April 2,2023 compared with the quarter ended April 3,2022RevenuesChannel Development total net revenues for the second quarter of fiscal 2023 increased$18 million,or 4%,primarily due to higher Global
287、 Coffee Allianceproduct sales and royalty revenue($20 million).Operating MarginChannel Development operating income for the second quarter of fiscal 2023 increased 32%to$262 million,compared to$198 million in the second quarterof fiscal 2022.Operating margin increased 1,180 basis points to 54.5%,pri
288、marily due to the gain from sale of our Seattles Best Coffee brand(approximately1,900 basis points),partially offset by impairment charges against certain manufacturing assets(approximately 360 basis points).For the two quarters ended April 2,2023 compared with the two quarters ended April 3,2022Rev
289、enuesChannel Development total net revenues for the first two quarters of fiscal 2023 increased$79 million,or 9%,primarily due to higher Global Coffee Allianceproduct sales and royalty revenue($63 million)and growth in our global ready-to-drink business($27 million).Operating MarginChannel Developme
290、nt operating income for the first two quarters of fiscal 2023 increased 28%to$488 million,compared to$381 million for the same periodin fiscal 2022.Operating margin increased 760 basis points to 50.9%,primarily due to the gain from sale of our Seattles Best Coffee brand(approximately 950basis points
291、)and growth in our North American Coffee Partnership joint venture income(approximately 110 basis points),partially offset by impairmentcharges against certain manufacturing assets(approximately 190 basis points)and business mix shift(approximately 160 basis points).35Table of ContentsCorporate and
292、Other Quarter EndedTwo Quarters EndedApr 2,2023Apr 3,2022$Change%ChangeApr 2,2023Apr 3,2022$Change%ChangeNet revenues:Other$3.7$24.4$(20.7)(84.8)%$8.2$49.5$(41.3)(83.4)%Total net revenues3.7 24.4(20.7)(84.8)8.2 49.5(41.3)(83.4)Product and distribution costs1.5 20.8(19.3)(92.8)6.3 43.6(37.3)(85.6)Oth
293、er operating expenses0.1 4.4(4.3)(97.7)0.1 7.4(7.3)(98.6)Depreciation and amortizationexpenses29.3 32.3(3.0)(9.3)58.1 65.2(7.1)(10.9)General and administrativeexpenses439.7 328.1 111.6 34.0 835.8 682.6 153.2 22.4 Restructuring and impairments0.3 0.3 nm1.1 1.1 nmTotal operating expenses470.9 385.6 85
294、.3 22.1 901.4 798.8 102.6 12.8 Operating loss$(467.2)$(361.2)$(106.0)29.3%$(893.2)$(749.3)$(143.9)19.2%Corporate and Other primarily consists of our unallocated corporate expenses and Evolution Fresh,prior to its sale in the fourth quarter of fiscal 2022.Unallocated corporate expenses include corpor
295、ate administrative functions that support the operating segments but are not specifically attributable to ormanaged by any segment and are not included in the reported financial results of the operating segments.For the quarter ended April 2,2023 compared with the quarter ended April 3,2022Corporate
296、 and Other operating loss increased by 29%to$467 million for the second quarter of fiscal 2023 compared to$361 million for the second quarter offiscal 2022.This increase was primarily driven by incremental investments in technology($34 million),higher performance-based compensation($25 million),incr
297、eased support costs of strategic initiatives including the Reinvention Plan($18 million)and a donation to the Starbucks Foundation($15 million).For the two quarters ended April 2,2023 compared with the two quarters ended April 3,2022Corporate and Other operating loss increased by 19%to$893 million f
298、or the first two quarters of fiscal 2023 compared to$749 million for the same period infiscal 2022.This increase was primarily driven by incremental investments in technology($62 million),increased support costs of strategic initiativesincluding the Reinvention Plan($24 million),increased support co
299、sts to address labor market conditions($16 million),higher performance-basedcompensation($16 million)and a donation to the Starbucks Foundation($15 million).36Table of ContentsQuarterly Store DataOur store data for the periods presented is as follows:Net stores opened/(closed)and transferred during
300、the period Quarter EndedTwo Quarters EndedStores open as ofApr 2,2023Apr 3,2022Apr 2,2023Apr 3,2022Apr 2,2023Apr 3,2022North AmericaCompany-operated stores91 54 131 93 10,347 9,954 Licensed stores10(16)56 7 7,135 6,972 Total North America101 38 187 100 17,482 16,926 InternationalCompany-operated sto
301、res174 102 271 315 8,308 7,587 Licensed stores189 173 465 382 10,844 10,117 Total International363 275 736 697 19,152 17,704 Total Company464 313 923 797 36,634 34,630 Financial Condition,Liquidity and Capital ResourcesCash and Investment OverviewOur cash and investments totaled$3.7 billion as of Ap
302、ril 2,2023 and$3.5 billion as of October 2,2022.We actively manage our cash and investments in orderto internally fund operating needs,make scheduled interest and principal payments on our borrowings,make acquisitions and return cash to shareholdersthrough common stock cash dividend payments and sha
303、re repurchases.Our investment portfolio primarily includes highly liquid available-for-sale securities,including corporate debt securities,government treasury securities(foreign and domestic)and commercial paper as well as principal-protected structureddeposits.As of April 2,2023,approximately$2.6 b
304、illion of cash and short-term investment were held in foreign subsidiaries.Borrowing CapacityRevolving Credit FacilityOur$3.0 billion unsecured five-year revolving credit facility(the“2021 credit facility”),of which$150 million may be used for issuances of letters of credit,iscurrently set to mature
305、 on September 16,2026.The 2021 credit facility is available for working capital,capital expenditures and other corporate purposes,including acquisitions and share repurchases.We have the option,subject to negotiation and agreement with the related banks,to increase the maximumcommitment amount by an
306、 additional$1.0 billion.Borrowings under the 2021 credit facility bear interest at a variable rate based on LIBOR,and,for U.S.dollar-denominated loans under certain circumstances,a Base Rate(as defined in the 2021 credit facility),in each case plus an applicable margin.The applicable margin is based
307、 on the Companys long-term creditratings assigned by the Moodys and Standard&Poors rating agencies.The 2021 credit facility contains alternative interest rate provisions specifying ratecalculations to be used at such time LIBOR ceases to be available as a benchmark due to reference rate reform.The“B
308、ase Rate”is the highest of(i)the FederalFunds Rate(as defined in the 2021 credit facility)plus 0.500%,(ii)Bank of Americas prime rate and(iii)the Eurocurrency Rate(as defined in the 2021 creditfacility)plus 1.000%.On April 17,2023,Starbucks amended the 2021 credit facility to replace LIBOR with Term
309、 SOFR(Secured Overnight Financing Rate)as a successor rate.Allother material terms and conditions of the 2021 credit facility were unchanged.Borrowings under the amended 2021 credit facility will bear interest at avariable rate based on Term SOFR,and,for U.S.dollar-denominated loans under certain ci
310、rcumstances,a Base Rate(as defined in the 2021 credit facility),ineach case plus an applicable margin.The applicable margin is based on the Companys long-term credit ratings assigned by the Moodys and Standard&Poors rating agencies.The“Base Rate”is the highest of(i)the Federal Funds Rate(as defined
311、in the 2021 credit facility)plus 0.500%,(ii)Bank of Americasprime rate,and(iii)Term SOFR plus 1.000%.Term SOFR means the forward-looking SOFR term rate administrated by the Chicago Mercantile Exchange plusa SOFR Adjustment of 0.100%.The 2021 credit facility contains provisions requiring us to mainta
312、in compliance with certain covenants,including a minimum fixed charge coverage ratio,which measures our ability to cover financing expenses.As of April 2,2023,we were in compliance with all applicable covenants.No amounts wereoutstanding under our 2021 credit facility as of April 2,2023 or October 2
313、,2022.37Table of ContentsCommercial PaperUnder our commercial paper program,we may issue unsecured commercial paper notes up to a maximum aggregate amount outstanding at any time of$3.0billion,with individual maturities that may vary but not exceed 397 days from the date of issue.Amounts outstanding
314、 under the commercial paper program arerequired to be backstopped by available commitments under the 2021 credit facility discussed above.The proceeds from borrowings under our commercialpaper program may be used for working capital needs,capital expenditures and other corporate purposes,including,b
315、ut not limited to,business expansion,payment of cash dividends on our common stock and share repurchases.As of April 2,2023,we had no borrowings outstanding under our commercial paperprogram.As of October 2,2022,we had$175.0 million in borrowings outstanding under this program.Our total contractual
316、borrowing capacity for generalcorporate purposes was$3.0 billion as of the end of our second quarter of fiscal 2023.Credit facilities in JapanAdditionally,we hold Japanese yen-denominated credit facilities for the use of our Japan subsidiary.These are available for working capital needs and capitale
317、xpenditures within our Japanese market.A 5 billion,or$37.7 million,credit facility is currently set to mature on January 4,2024.Borrowings under this credit facility are subject to termsdefined within the facility and will bear interest at a variable rate based on TIBOR plus an applicable margin of
318、0.400%.A 10 billion,or$75.4 million,credit facility is currently set to mature on March 27,2024.Borrowings under this credit facility are subject to termsdefined within the facility and will bear interest at a variable rate based on TIBOR plus an applicable margin of 0.300%.As of April 2,2023,we had
319、 7 billion,or$52.8 million,of borrowings outstanding under these credit facilities.As of October 2,2022,we had no borrowingsoutstanding under these credit facilities.See Note 8,Debt,to the consolidated financial statements included in Item 1 of Part I of this 10-Q for details of the components of ou
320、r long-term debt.Our ability to incur new liens and conduct sale and leaseback transactions on certain material properties is subject to compliance with terms of the indenturesunder which the long-term notes were issued.As of April 2,2023,we were in compliance with all applicable covenants.Use of Ca
321、shWe expect to use our available cash and investments,including,but not limited to,additional potential future borrowings under the credit facilities,commercialpaper program and the issuance of debt to support and invest in our core businesses,including investing in new ways to serve our customers a
322、nd supporting ourstore partners,repaying maturing debts,as well as returning cash to shareholders through common stock cash dividend payments and discretionary sharerepurchases and investing in new business opportunities related to our core and developing businesses.Furthermore,we may use our availa
323、ble cash resourcesto make proportionate capital contributions to our investees.We may also seek strategic acquisitions to leverage existing capabilities and further build ourbusiness.Acquisitions may include increasing our ownership interests in our investees.Any decisions to increase such ownership
324、 interests will be driven byvaluation and fit with our ownership strategy.We believe that net future cash flows generated from operations and existing cash and investments both domestically and internationally combined with ourability to leverage our balance sheet through the issuance of debt will b
325、e sufficient to finance capital requirements for our core businesses as well asshareholder distributions for at least the next 12 months.We are currently not aware of any trends or demands,commitments,events or uncertainties that willresult in,or that are reasonably likely to result in,our liquidity
326、 increasing or decreasing in any material way that will impact our capital needs during or beyondthe next 12 months.We have borrowed funds and continue to believe we have the ability to do so at reasonable interest rates;however,additional borrowingswould result in increased interest expense in the
327、future.In this regard,we may incur additional debt,within targeted levels,as part of our plans to fund ourcapital programs,including cash returns to shareholders through future dividends and discretionary share repurchases as well as investing in new businessopportunities.If necessary,we may pursue
328、additional sources of financing,including both short-term and long-term borrowings and debt issuances.We regularly review our cash positions and our determination of indefinite reinvestment of foreign earnings.In the event we determine that all or a portion ofsuch foreign earnings are no longer inde
329、finitely reinvested,we may be subject to additional foreign withholding taxes and U.S.state income taxes,which couldbe material.While we do not anticipate the need for repatriated funds to the U.S.to satisfy domestic liquidity requirements,any foreign earnings which are notindefinitely reinvested ma
330、y be repatriated at managements discretion.During the second quarter of fiscal 2023,our Board of Directors approved a quarterly cash dividend to shareholders of$0.53 per share to be paid on May 26,2023 to shareholders of record as of the close of business on May 12,2023.38Table of ContentsDuring the
331、 first quarter of fiscal 2023,we resumed our share repurchase program which was temporarily suspended in April 2022.During the two quartersended April 2,2023,we repurchased 4.9 million shares of common stock for$495.3 million.As of April 2,2023,47.7 million shares remained available forrepurchase un
332、der current authorizations.Other than normal operating expenses,cash requirements for the remainder of fiscal 2023 are expected to consist primarily of capital expenditures forinvestments in our new and existing stores,our supply chain and corporate facilities.Total capital expenditures for fiscal 2
333、023 are expected to be approximately$2.5 billion.In the MD&A included in the 10-K,we disclosed that we had$33.2 billion of current and long-term material cash requirements as of October 2,2022.Therehave been no material changes to our material cash requirements during the period covered by this 10-Q outside of the normal course of our business.Cash FlowsCash provided by operating activities was$2.