Ninety Markets, One CupWide moat

Starbucks (SBUX) — moat facet

Ninety markets and one cup: the advantage is not cost, it is that a traveller in a strange city does not have to make a decision.

Ninety markets, one product, and a customer who has already decided.

Revenue by geography, FY2025 ($M)United States$27,125M 73%Other countries$6,899M 19%China$3,161M 8.5%90 markets, more than 41,000 stores - and three-quarters of the revenue in one of them.
Not a global business with an American headquarters. An American business with international operations.

Starbucks operates in 90 markets with more than 41,000 stores, of which 21,514 are company-operated and 19,476 licensed.1 The scale is not primarily a cost advantage — coffee is bought cheaply by anyone at volume — it is a familiarity advantage. A traveller in a strange city knows what a Starbucks is, and that knowledge is worth a price premium because the alternative requires a decision.

That is why the licensed half of the estate exists at all. Airport, hotel and campus operators pay for the name because the name converts a captive location into a predictable transaction, and Starbucks collects a royalty for allowing it. Licensed stores are 48% of the store base and 12% of revenue, which is the arithmetic of selling permission rather than coffee.2

The concentration is worth stating honestly. The United States is $27,124.7 million of $37,184.4 million — 73% of revenue — with China at $3,160.8 million and everywhere else $6,898.9 million.3 Starbucks lists its heavy reliance on the North America segment as a risk factor in its own words.4 This is not a global business with an American headquarters; it is an American business with international operations.

The reach is real and it is unevenly monetised.

The measure is revenue outside the United States as a share of the total. It has barely moved in a decade, and the China sale made it smaller.

Moat trajectory: Narrowing

The store count fell in the United States for the first time in modern memory, and the China divestiture converted roughly 8,000 company-operated stores into a licensed joint venture. The footprint is being managed for quality rather than reach.

The number that tests this moat
Reported
Markets served
90, with more than 41,000 stores

21,514 company-operated and 19,476 licensed at the fiscal 2025 year end. The advantage is familiarity rather than cost — a traveller in a strange city does not have to make a decision — and it is what lets Starbucks charge licensees for the name in airports and campuses. The concentration is the caveat: the United States is $27,124.7M of $37,184.4M. Watch international revenue as a share of the total; it has barely moved in a decade and the China sale shrank it.

Source: Starbucks Form 10-K, FY2025 ↗
⚠ Threats to the moat
⚠ THREAT 01
Seventy-Three Percent of Revenue Is American
Selling China made the American concentration worse, not better — and America is the market where all four competitors are now opening.
References
  1. ReportedStarbucks operates in 90 markets with more than 41,000 stores, of which 21,514 are company-operated and 19,476 licensed.
    Starbucks Corporation, Form 10-K for the fiscal year ended 28 September 2025 (SEC, CIK 829224) — Item 1, Business, and Item 2, Properties. Starbucks describes itself as the premier roaster, marketer and retailer of specialty coffee in the world, operating in 89 markets, formed in 1985 and trading on Nasdaq under SBUX; besides the flagship Starbucks Coffee brand it sells under Teavana, Ethos and Starbucks Reserve. In the fourth quarter of fiscal 2024 it announced its Back to Starbucks strategy, implemented to bring new and existing customers to its stores and return to growth, including supporting green apron partners, enhancing the customer experience, reestablishing itself as the community coffeehouse, and strengthening the brand through product development, marketing, in-store and digital experience. In the fourth quarter of fiscal 2025 it announced a restructuring plan involving the closure of coffeehouses and further transformation of the support organisation, having assessed the store portfolio on whether coffeehouses had a viable path to offering the physical environment consistent with the brand and a clear path to financial performance, and closed those that did not meet these criteria. Retail sales mix by product type for company-operated stores was beverages 73%, food 23% and other 4%. Company-operated store data for fiscal 2025: US 10,158 to 10,047 (509 opened, 620 closed, net -111), Canada 997 to 967, total North America 11,161 to 11,018 (554 opened, 697 closed, net -143); International China 7,594 to 8,009, Japan 1,809 to 1,883, UK 378 to 524, total International 9,857 to 10,496; total company-operated 21,018 to 21,514, including 627 stores closed in the fourth quarter as part of the Back to Starbucks restructuring and 113 licensed stores converted to company-operated following the acquisition of 23.5 Degrees Topco Limited. Licensed store data: total North America 7,263 to 7,293, total International 11,918 to 12,183, total licensed 19,181 to 19,476. Revenues from licensed stores accounted for 12% of total net revenues. Starbucks generally controls substantially all coffee purchasing, roasting and packaging and the global distribution of coffee used in its operations, while Nestlé controls distribution of Starbucks packaged coffee products outside Starbucks stores. Material properties include York, Pennsylvania (1,957,000 sq ft, roasting, warehousing and distribution), Seattle, Washington (1,294,000 sq ft, corporate administrative), Minden, Nevada (1,080,000 sq ft), Auburn, Washington (750,000 sq ft), Lebanon, Tennessee (680,000 sq ft), Kunshan, China (630,000 sq ft), Kent, Washington (510,000 sq ft) and Shanghai, China (221,000 sq ft); Starbucks owns most of its roasting facilities and leases the majority of warehousing and distribution locations, and as of 28 September 2025 had 21,514 company-operated stores, almost all of which are leased. Item 3 reports legal proceedings by reference to the commitments note. The stock performance graph indexes Starbucks at $100.00 on 27 September 2020 and $110.47 on 28 September 2025, against the S&P 500 at $214.30. — FY2025 · publ. 2025-11-14 · source ↗
  2. ReportedLicensed stores are 48% of the store base and 12% of revenue, which is the arithmetic of selling permission rather than coffee.
    Starbucks Corporation, Form 10-K for the fiscal year ended 28 September 2025 (SEC, CIK 829224) — Item 1, Business, and Item 2, Properties. Starbucks describes itself as the premier roaster, marketer and retailer of specialty coffee in the world, operating in 89 markets, formed in 1985 and trading on Nasdaq under SBUX; besides the flagship Starbucks Coffee brand it sells under Teavana, Ethos and Starbucks Reserve. In the fourth quarter of fiscal 2024 it announced its Back to Starbucks strategy, implemented to bring new and existing customers to its stores and return to growth, including supporting green apron partners, enhancing the customer experience, reestablishing itself as the community coffeehouse, and strengthening the brand through product development, marketing, in-store and digital experience. In the fourth quarter of fiscal 2025 it announced a restructuring plan involving the closure of coffeehouses and further transformation of the support organisation, having assessed the store portfolio on whether coffeehouses had a viable path to offering the physical environment consistent with the brand and a clear path to financial performance, and closed those that did not meet these criteria. Retail sales mix by product type for company-operated stores was beverages 73%, food 23% and other 4%. Company-operated store data for fiscal 2025: US 10,158 to 10,047 (509 opened, 620 closed, net -111), Canada 997 to 967, total North America 11,161 to 11,018 (554 opened, 697 closed, net -143); International China 7,594 to 8,009, Japan 1,809 to 1,883, UK 378 to 524, total International 9,857 to 10,496; total company-operated 21,018 to 21,514, including 627 stores closed in the fourth quarter as part of the Back to Starbucks restructuring and 113 licensed stores converted to company-operated following the acquisition of 23.5 Degrees Topco Limited. Licensed store data: total North America 7,263 to 7,293, total International 11,918 to 12,183, total licensed 19,181 to 19,476. Revenues from licensed stores accounted for 12% of total net revenues. Starbucks generally controls substantially all coffee purchasing, roasting and packaging and the global distribution of coffee used in its operations, while Nestlé controls distribution of Starbucks packaged coffee products outside Starbucks stores. Material properties include York, Pennsylvania (1,957,000 sq ft, roasting, warehousing and distribution), Seattle, Washington (1,294,000 sq ft, corporate administrative), Minden, Nevada (1,080,000 sq ft), Auburn, Washington (750,000 sq ft), Lebanon, Tennessee (680,000 sq ft), Kunshan, China (630,000 sq ft), Kent, Washington (510,000 sq ft) and Shanghai, China (221,000 sq ft); Starbucks owns most of its roasting facilities and leases the majority of warehousing and distribution locations, and as of 28 September 2025 had 21,514 company-operated stores, almost all of which are leased. Item 3 reports legal proceedings by reference to the commitments note. The stock performance graph indexes Starbucks at $100.00 on 27 September 2020 and $110.47 on 28 September 2025, against the S&P 500 at $214.30. — FY2025 · publ. 2025-11-14 · source ↗
  3. ReportedThe United States is $27,124.7 million of $37,184.4 million — 73% of revenue — with China at $3,160.8 million and everywhere else $6,898.9 million.
    Starbucks Corporation, Form 10-K FY2025 — Note 11, Deferred Revenue, Note 17, Segment Reporting, Note 18, Restructuring, and Note 19, Subsequent Event. During fiscal 2018 Starbucks licensed the rights to sell and market its products in authorized channels through the Global Coffee Alliance and received an up-front prepaid royalty from Nestlé; the up-front payment of approximately $7 billion was recorded as deferred revenue because Starbucks has continuing performance obligations to support the alliance, including providing Nestlé access to certain intellectual properties and products for future resale, and is being recognised as other revenue on a straight-line basis over the estimated economic life of the arrangement of 40 years (a term beginning in fiscal 2018 and therefore running to 2058), a ratable pattern reflecting obligations that are generally constant throughout the term. As of 28 September 2025 the current and long-term deferred revenue related to the Nestlé up-front payment was $177.0 million and $5.6 billion respectively, against $177.0 million and $5.8 billion a year earlier, and Starbucks recognised $176.5 million of prepaid royalty revenue related to Nestlé in each of fiscal 2025, 2024 and 2023. Changes in the deferred revenue balance for stored value cards and the loyalty program: opening balance at 29 September 2024 of $1,718.7 million, revenue deferred from card activations, card reloads and Stars earned of $15,245.8 million, revenue recognised from card and Stars redemptions and breakage of $(15,199.5) million, other $(13.3) million, closing balance at 28 September 2025 of $1,751.7 million; the prior year ran from $1,567.5 million with $15,807.1 million deferred and $(15,665.1) million recognised. For the fiscal years ended 28 September 2025, 29 September 2024 and 1 October 2023, Starbucks recognised breakage revenue of $200.4 million, $187.6 million and $196.1 million in company-operated store revenues, and $22.0 million, $20.0 million and $18.9 million in licensed store revenues. Total breakage recognised in fiscal 2025 across company-operated and licensed store revenues was therefore $222.4 million. Customers who register their stored value card in the US, Canada and certain other countries are automatically enrolled in Starbucks Rewards, primarily a spend-based loyalty program in which members earn Stars; in many company-operated markets including the US the cards do not expire and no service fees decrement balances, and a portion is recognised as breakage over time in proportion to redemptions based on historical redemption rates by market. Segment revenue mix by product type: beverage $22,539.9M (61%), food $7,049.9M (19%), other $7,594.6M (20%) for fiscal 2025. Information by geographic area: net revenues United States $27,124.7M, China $3,160.8M, other countries $6,898.9M; long-lived assets United States $15,952.7M, China $4,276.8M, other countries $4,407.9M; no customer accounts for 10% or more of revenues. Segment financials fiscal 2025: North America $27,373.1M, International $7,819.9M, Channel Development $1,871.7M, Corporate and Other $119.7M; fiscal 2024: $27,009.5M, $7,338.9M, $1,769.8M, $58.0M; fiscal 2023: $26,569.6M, $7,487.6M, $1,893.8M. On 3 November 2025 Starbucks announced an agreement to form a joint venture with Boyu Capital to operate Starbucks retail in China, under which Boyu will acquire up to a 60% interest based on a cash-free, debt-free mutually agreed total enterprise value of approximately $4 billion, with Starbucks retaining a 40% interest and continuing to own and license the Starbucks brand and intellectual property to the new entity, expected to close by early calendar year 2026. — FY2025 · publ. 2025-11-14 · source ↗
  4. ReportedStarbucks lists its heavy reliance on the North America segment as a risk factor in its own words.
    Starbucks Corporation, Form 10-K FY2025 — consolidated statements of earnings, balance sheets and cash flows. Net revenues: company-operated stores $30,744.8M, $29,765.9M and $29,462.3M; licensed stores $4,350.4M, $4,505.1M and $4,512.7M; other $2,089.2M, $1,905.2M and $2,000.6M; total $37,184.4M, $36,176.2M and $35,975.6M for fiscal 2025, 2024 and 2023. Product and distribution costs $11,658.2M; store operating expenses $17,058.9M against $15,286.5M and $14,720.3M; other operating expenses $584.6M; depreciation and amortisation $1,684.7M; general and administrative $2,617.2M; restructuring and impairments $892.0M against nil and $21.8M; total operating expenses $34,495.6M; income from equity investees $247.8M against $301.2M and $298.4M; operating income $2,936.6M against $5,408.8M and $5,870.8M; interest income and other net $113.3M; interest expense $542.6M against $562.0M and $550.1M; earnings before income taxes $2,507.3M; income tax expense $650.6M; net earnings attributable to Starbucks $1,856.4M against $3,760.9M and $4,124.5M; diluted EPS $1.63 against $3.31 and $3.58 on 1,139.8 million diluted shares. Balance sheet at 28 September 2025: cash and cash equivalents $3,219.8M, short-term investments $247.2M, accounts receivable $1,277.5M, inventories $2,185.6M, total current assets $7,382.3M, equity investments $466.2M, property plant and equipment net $8,493.5M, operating lease right-of-use asset $9,315.7M, goodwill $3,368.9M, total assets $32,019.7M; accounts payable $1,852.8M, accrued liabilities $2,359.7M, current portion of operating lease liability $1,564.5M, stored value card liability and current portion of deferred revenue $1,840.6M, current portion of long-term debt $1,498.9M, total current liabilities $10,210.4M, long-term debt $14,575.9M, operating lease liability $8,972.2M, deferred revenue $5,772.6M, total liabilities $40,108.9M, retained deficit $(8,272.5)M, total shareholders' deficit $(8,096.6)M, with 1,136.9 million shares issued and outstanding against 1,133.5 million. Cash flows: net earnings including noncontrolling interests $1,856.7M, depreciation and amortisation $1,771.5M, non-cash lease costs $1,513.8M, loss on disposal, impairment and accelerated amortisation of assets $834.7M, stock-based compensation $318.3M; net cash provided by operating activities $4,747.5M against $6,095.6M and $6,008.7M; additions to property, plant and equipment $2,305.5M against $2,777.5M and $2,333.6M. Historic figures from EDGAR XBRL: revenue $19,162.7M (FY2015), $21,315.9M, $22,386.8M, $24,719.5M, $26,508.6M, $23,518.0M (FY2020), $29,060.6M, $32,250.3M, $35,975.6M, $36,176.2M and $37,184.4M (FY2025); net income $2,757.4M, $2,817.7M, $2,884.7M, $4,518.3M, $3,599.2M, $928.3M, $4,199.3M, $3,281.6M, $4,124.5M, $3,760.9M and $1,856.4M; diluted EPS $1.82, $1.90, $1.97, $3.24, $2.92, $0.79, $3.54, $2.83, $3.58, $3.31 and $1.63; operating income $3,601.0M, $4,171.9M, $4,134.7M, $3,883.3M, $4,077.9M, $1,561.7M, $4,872.1M, $4,617.8M, $5,870.8M, $5,408.8M and $2,936.6M. Return on invested capital computed from the same EDGAR filings as NOPAT over average operating invested capital (NOPAT = operating income x (1 - effective tax rate); invested capital = total assets - current liabilities - cash) runs 38.4%, 37.7%, 36.1%, 34.9%, 32.7%, 8.8%, 22.2%, 21.9%, 27.5%, 23.0% and 11.6% for fiscal 2015 through 2025; the step-down after fiscal 2019 reflects the adoption of lease accounting, which added roughly $9 billion of operating lease right-of-use assets to the denominator. — FY2025 · publ. 2025-11-14 · source ↗
Sources
Generated September 23, 2026