SBUX · 10-K · 2026A · Full report

China Licensed Joint Venture

STARBUCKS CORP · 2026-11-12 · Importance 67 · Surprise 60

In the third quarter of fiscal 2026, Boyu Capital acquired a 60% stake in Starbucks China retail operations, while Starbucks retained a 40% ownership interest and ownership of the brand and intellectual property. Starbucks deconsolidated the China disposal group and now records its share of joint-venture income under the equity method, along with product sales and royalty revenue from the venture. The transaction generated $2.5 billion of net proceeds and a $536.3 million net gain; a portion of proceeds funded debt reduction. The licensed model reduced International company-operated revenue by $1.5 billion, while adding $105 million of licensed product and royalty revenue and contributing to a 560-basis-point expansion in International operating margin.

Key facts

• Starbucks expects the China joint venture to have a shared long-term aspiration to grow to as many as 20,000 locations in China over time. source
• In the third quarter of fiscal 2026, Boyu Capital acquired a 60% stake in Starbucks China retail operations, while Starbucks retained a 40% ownership interest. source
• Starbucks completed the China retail operations joint venture transaction in the third quarter of fiscal 2026 and began recording its share of joint venture income under the equity method, along with product sales and royalty revenues. source
• Starbucks expects its conversion to the China licensed joint venture model to result in lower revenues and higher operating margin than the historical company-operated model. source
• Income from equity investees increased $47 million, primarily due to income from the China joint venture formed in the third quarter of fiscal 2026. source
• Starbucks continues to own and license its brand and intellectual property to the China joint venture. source