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US Treasury par yield curve · Jul 29 · Source: U.S. Treasury
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Starbucks says it has received substantially all of the IEEPA tariff refunds it asked United States customs for, and that they largely cancelled out three quarters of tariffs

Money & World
The Editorial Team ·
A close photograph of loose roasted coffee beans scattered on a black surface, their split centre seams and oily surfaces visible, with no packaging, label or text in view.
Photo: Moussa Idrissi / Pexels

Starbucks paid tariffs for three quarters of its financial year, and has now been given most of that money back.

A numbered note in Wednesday's release sets out the mechanism. United States Customs and Border Protection opened a platform on 20 April this year for importers of record to submit refund requests for tariffs levied under the International Emergency Economic Powers Act. Starbucks filed requests during the quarter that ended 28 June for what it calls qualifying reciprocal tariffs paid. It says it "has received substantially all of the refunds requested", that they went into product and distribution costs, and that the money received in the quarter largely offset the related tariffs it had incurred across the first three quarters of the year.

The release never says how much. There is no dollar figure for the refunds in the note, in the highlights, or in the segment commentary, and this brief cannot supply one.

Where the money shows up

Product and distribution costs were $2,828.6m for the quarter, against $2,955.5m a year earlier, and 30.3 percent of revenue against 31.3 percent. That is the line the refunds were booked into, so it holds both the tariffs and their reversal.

The company points at the refunds twice more. Group operating margin expanded 60 basis points to 10.5 percent, which the release attributes to sales leverage and to lower inflation paired with tariff refunds, partly offset by restructuring charges and labour spending. In Channel Development, the packaged coffee and licensing business, operating margin expanded 700 basis points to 52.1 percent, and the release says that was "primarily driven by tariff impacts including refunds". Segment revenue there was $587.9m against $483.8m.

Nothing in the release explains why the refunds were available. It describes the customs platform and the requests, and stops.

The quarter around it

Consolidated net revenues fell 1.4 percent to $9,322.7m, because Starbucks converted its China retail operations to a licensed joint venture with funds managed by Boyu Capital in April and now holds 40 percent of it. International segment revenue fell 34 percent to $1,322.6m for that reason, while its operating margin rose to 19.1 percent from 13.6 percent. A net gain of $536.3m was recorded on the divestiture, and part of the proceeds funded tender offers for about $1.3bn of outstanding notes.

Global comparable store sales rose 7.9 percent, with transactions up 4.2 percent and average ticket up 3.5 percent. North America comparable sales rose 8.1 percent from a store base of 18,371, which is 363 fewer than a year ago. Restructuring and impairments took $302.6m against $20.8m. Diluted earnings per share were $0.91 against $0.49, and the effective tax rate was 26.4 percent against 31.8 percent.

The board declared a dividend of $0.62 per share, payable on 28 August to holders of record on 14 August.

The document: Starbucks Corporation, third quarter fiscal 2026 earnings release, Exhibit 99.1 to a Form 8-K filed 29 July 2026, accession 0000829224-26-000129, accepted by EDGAR at 16:06:12 Eastern, Items 2.02 and 9.01. Quarter ended 28 June 2026. Numbered note 2, verbatim in part: 'Effective April 20, 2026, the U.S. Customs and Border Protection launched a platform for importers of record to begin submitting International Emergency Economic Powers Act (IEEPA) tariff refund requests. Starbucks submitted refund requests in the third quarter of fiscal 2026 for qualifying reciprocal tariffs paid and has received substantially all of the refunds requested, which were recorded in product and distribution costs within the consolidated statements of earnings. The refunds received during the third quarter of fiscal 2026 largely offset related tariffs incurred in the first three quarters of fiscal 2026.' Highlights section: GAAP operating margin expanded 60 basis points to 10.5 percent 'primarily driven by sales leverage and lower inflation paired with tariff refunds'; non-GAAP operating margin expanded 430 basis points to 14.4 percent. Consolidated statements of earnings, quarter, $m, prior year in brackets: total net revenues 9,322.7 (9,456.0), down 1.4 percent; product and distribution costs 2,828.6 (2,955.5), 30.3 percent of revenue (31.3 percent); store operating expenses 4,197.4 (4,344.8); general and administrative 598.8 (677.2); restructuring and impairments 302.6 (20.8); operating income 980.4 (935.6) at 10.5 percent (9.9 percent); net gain resulting from divestiture of certain operations 536.3 (nil); earnings before income taxes 1,419.3 (818.9); income tax expense 374.4 (260.4); net earnings attributable to Starbucks 1,045.3 (558.3); diluted EPS 0.91 (0.49); dividends declared per share 0.62 (0.61). Segment tables: North America net revenues 7,395.1 (6,927.0), operating margin 13.6 percent (13.3 percent), store count 18,371 (18,734); International net revenues 1,322.6 (2,010.7), operating margin 19.1 percent (13.6 percent), store count 22,933 (22,363); Channel Development net revenues 587.9 (483.8), operating income 306.2 (218.4), operating margin 52.1 percent (45.1 percent), the release attributing the expansion 'primarily driven by tariff impacts including refunds'. Effective tax rate 26.4 percent against 31.8 percent. Note 1 records completion in April of the transaction with funds managed by Boyu Capital, with Starbucks retaining a 40 percent interest. Note on tender offers for approximately $1.3bn aggregate principal amount of outstanding notes. Fiscal 2026 fourth quarter and full year outlook as stated in the release. Release read in full 29 July 2026..

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