InternationalNarrow moat

Starbucks (SBUX) — moat facet

A third smaller and more profitable per dollar, now that China belongs to a joint venture.

International is Starbucks outside North America, and in 2026 it changed shape. The segment had revenue of $7,819.9 million in fiscal 2025, from $7,338.9 million and $7,487.6 million in the two years before 1, 21% of the company 2. Until March 2026 it included the company-operated China business.

International, June quarter ($m)$2,010.7mRevenue Q3 FY2025$1,322.6mRevenue Q3 FY2026$272.7mOp. income Q3 FY2025$252.8mOp. income Q3 FY2026Starbucks Form 10-Q, Q3 fiscal 2026; China deconsolidated in March 2026
Revenue fell by a third and operating income by 7%.

What it sells depends on the market. Where Starbucks runs the stores it books the coffeehouse revenue and bears the costs; where a licensee runs them it books product sales and royalties. The China transaction moved 7,991 company-operated stores to the licensed model: Boyu Capital's funds bought 60% of the China retail business, Starbucks kept 40% and continues to own and license the brand 3.

Profit was falling before the change. Operating income was $1,230.9 million in fiscal 2023, $1,045.7 million in fiscal 2024 and $950.0 million in fiscal 2025 4, a margin that went from 16.4% to 12.1% 5.

The latest quarter shows the new shape. International revenue was $1,322.6 million in the June 2026 quarter against $2,010.7 million, down about a third, while operating income was $252.8 million against $272.7 million 6, so the margin rose from 13.6% to 19.1% 7. Store operating expenses fell from $792.4 million to $408.1 million 8. Revenue from the China joint venture was $52.5 million in the quarter, and the 40% stake was carried at $1.2 billion 9.

Starbucks expects the international business, now predominantly licensed, to contribute to coffeehouse growth over time through licensed partners 10. That trades revenue for margin and puts growth in partners' hands.

The measure to watch is International operating income, not revenue: revenue will look smaller for four quarters as China drops out of the comparison. If operating income holds near the $1 billion a year the segment earned before the change, the licensed model is worth what Starbucks gave up; well below it, and China's growth went to the partner.

Moat trajectory: Holding steady

Revenue fell a third after the China deconsolidation while the margin rose to 19.1%.

The number that tests this moat
Reported
International operating income, latest quarter
$252.8M in the June 2026 quarter, from $272.7M

Holding near $1bn a year after China became a joint venture would show the licensed model keeps the profit.

Source: Starbucks Form 10-Q, Q3 fiscal 2026 ↗
References
  1. ReportedThe segment had revenue of $7,819.9 million in fiscal 2025, from $7,338.9 million and $7,487.6 million in the two years before , 21% of the company .
    Starbucks Form 10-K FY2025 - segment note: revenue, costs and operating income by segment for fiscal 2023-2025; income from equity method investees; the Nestlé Global Coffee Alliance and ready-to-drink partnerships; the approximately $7 billion Nestlé up-front payment — FY2023-FY2025 · publ. November 2025 · source ↗
  2. Moat Explorer calcThe segment had revenue of $7,819.9 million in fiscal 2025, from $7,338.9 million and $7,487.6 million in the two years before , 21% of the company .
    Moat Explorer calculation from Starbucks' Form 10-K FY2025 and Q3 fiscal 2026 Form 10-Q: segment shares and operating margins — FY2023 to Q3 FY2026 · publ. 2026-09-23 · source ↗
  3. ReportedThe China transaction moved 7,991 company-operated stores to the licensed model: Boyu Capital's funds bought 60% of the China retail business, Starbucks kept 40% and continues to own and license the brand .
    Starbucks Form 10-Q, quarter ended 28 June 2026 - segment revenue and operating income for the quarter and three quarters; U.S. comparable sales; the China joint venture with Boyu Capital (7,991 stores converted, 40% stake carried at $1.2 billion, $52.5 million of revenue from the joint venture); outlook for the licensed international business — Q3 FY2026 · publ. 29 July 2026 · source ↗
  4. ReportedOperating income was $1,230.9 million in fiscal 2023, $1,045.7 million in fiscal 2024 and $950.0 million in fiscal 2025 , a margin that went from 16.4% to 12.1% .
    Starbucks Form 10-K FY2025 - segment note: revenue, costs and operating income by segment for fiscal 2023-2025; income from equity method investees; the Nestlé Global Coffee Alliance and ready-to-drink partnerships; the approximately $7 billion Nestlé up-front payment — FY2023-FY2025 · publ. November 2025 · source ↗
  5. Moat Explorer calcOperating income was $1,230.9 million in fiscal 2023, $1,045.7 million in fiscal 2024 and $950.0 million in fiscal 2025 , a margin that went from 16.4% to 12.1% .
    Moat Explorer calculation from Starbucks' Form 10-K FY2025 and Q3 fiscal 2026 Form 10-Q: segment shares and operating margins — FY2023 to Q3 FY2026 · publ. 2026-09-23 · source ↗
  6. ReportedInternational revenue was $1,322.6 million in the June 2026 quarter against $2,010.7 million, down about a third, while operating income was $252.8 million against $272.7 million , so the margin rose from 13.6% to 19.1% .
    Starbucks Form 10-Q, quarter ended 28 June 2026 - segment revenue and operating income for the quarter and three quarters; U.S. comparable sales; the China joint venture with Boyu Capital (7,991 stores converted, 40% stake carried at $1.2 billion, $52.5 million of revenue from the joint venture); outlook for the licensed international business — Q3 FY2026 · publ. 29 July 2026 · source ↗
  7. Moat Explorer calcInternational revenue was $1,322.6 million in the June 2026 quarter against $2,010.7 million, down about a third, while operating income was $252.8 million against $272.7 million , so the margin rose from 13.6% to 19.1% .
    Moat Explorer calculation from Starbucks' Form 10-K FY2025 and Q3 fiscal 2026 Form 10-Q: segment shares and operating margins — FY2023 to Q3 FY2026 · publ. 2026-09-23 · source ↗
  8. ReportedStore operating expenses fell from $792.4 million to $408.1 million .
    Starbucks Form 10-Q, quarter ended 28 June 2026 - segment revenue and operating income for the quarter and three quarters; U.S. comparable sales; the China joint venture with Boyu Capital (7,991 stores converted, 40% stake carried at $1.2 billion, $52.5 million of revenue from the joint venture); outlook for the licensed international business — Q3 FY2026 · publ. 29 July 2026 · source ↗
  9. ReportedRevenue from the China joint venture was $52.5 million in the quarter, and the 40% stake was carried at $1.2 billion .
    Starbucks Form 10-Q, quarter ended 28 June 2026 - segment revenue and operating income for the quarter and three quarters; U.S. comparable sales; the China joint venture with Boyu Capital (7,991 stores converted, 40% stake carried at $1.2 billion, $52.5 million of revenue from the joint venture); outlook for the licensed international business — Q3 FY2026 · publ. 29 July 2026 · source ↗
  10. ReportedStarbucks expects the international business, now predominantly licensed, to contribute to coffeehouse growth over time through licensed partners .
    Starbucks Form 10-Q, quarter ended 28 June 2026 - segment revenue and operating income for the quarter and three quarters; U.S. comparable sales; the China joint venture with Boyu Capital (7,991 stores converted, 40% stake carried at $1.2 billion, $52.5 million of revenue from the joint venture); outlook for the licensed international business — Q3 FY2026 · publ. 29 July 2026 · source ↗
Sources
Generated September 23, 2026