How Starbucks Really Makes Money (It's Not Just Coffee)

Two out of every three Starbucks stores are now run by someone else. So how does a coffee company make money from stores it doesn't run, and what else is hiding in its numbers beyond the coffee? Dime breaks it down using Starbucks' own reports. QUESTION FOR YOU: when you choose a coffee shop, what matters most: the coffee, the place, or the price? Tell us in the comments. CHAPTERS 0:00 Two-thirds of stores run by someone else 1:27 The obvious answer: coffee and food 2:38 The real answer: four businesses 4:02 Inside the café: where each dollar goes 5:27 Licensing and the China deal 6:52 The Nestlé alliance: a business with no baristas 8:20 Prepaid cards, Stars and Rewards 9:40 The one weak spot 11:10 Takeaway KEY NUMBERS (fiscal 2025 unless noted) Revenue $37.2B: drinks 61%, food 19%, everything else 20%. Company-operated stores 83%, licensed stores 12% Operating income $2.9B, 7.9% (15.0% a year earlier); includes store-closing costs Channel Development (Nestlé alliance and packaged goods): about 5% of revenue, 47% operating margin including joint-venture income; about 18% of the three segments' operating income before head-office costs (my own calculation) North America: 74% of revenue; operating margin 11.5% (19.8% a year earlier); 13.6% in Q3 fiscal 2026 China: 7,991 stores converted to licensed (April 2026, Boyu Capital 60%, Starbucks 40%); 67% of all stores licensed at June 28, 2026 Prepaid cards and unredeemed Stars: about $1.75B (Sep 28, 2025); breakage revenue about $222M SOURCES Starbucks fiscal 2025 Form 10-K and annual report Starbucks Q4 fiscal 2025 results release (Oct 29, 2025) Starbucks Q3 fiscal 2026 results release and Form 10-Q (Jul 29, 2026) Starbucks China joint venture announcement (Nov 3, 2025) and Form 10-Q Starbucks press releases (Rewards membership; Investor Day) and the 2018 Nestlé alliance announcement, cited as company statements NOTES Percentages and per-dollar figures marked "my own" are my rounding or calculations. Starbucks' fiscal 2026 ended Sep 27, 2026 and full-year results had not yet been reported when this video was made. Graphics are original illustrations with no logos. Subscribe for the next one: how companies really make money. DISCLAIMER This video is for educational purposes only and is not financial or investment advice. Dime & Margins is not affiliated with, endorsed by, or sponsored by Starbucks Corporation. Starbucks is a trademark of its owner. #Starbucks #HowCompaniesMakeMoney #BusinessExplained #Coffee #DimeAndMargins