Starbucks Corporation has strengthened its balance sheet by repaying approximately $1.8 billion of debt in the third quarter of fiscal 2026, using proceeds from its China transaction, which reduced its leverage to 2.9 times. The company repurchased about $1.3 billion in senior notes through cash tender offers, covering five series with interest rates from 4.5% to 5.4% and maturities between 2028 and 2048, while a separate $500 million note due in June 2026 was also retired. As a result, total long-term debt fell to approximately $13.28 billion as of June 28, 2026, from $16.07 billion at the end of fiscal 2025. Quarterly interest expense declined $8 million year over year, though nine-month interest expense rose $14 million due to lower hedging savings. Starbucks ended the quarter with $3.9 billion in cash and investments and $3 billion in available borrowing capacity, with no outstanding borrowings under its revolving credit facility or commercial paper program. The company expects operating cash flows and existing resources to fund operations and shareholder distributions for at least the next 12 months. Among peers, Dutch Bros Inc. reported $699 million in total liquidity and a 55.3% increase in operating cash flow, while McDonald's Corporation generated $5.22 billion in operating cash flow and maintained long-term debt at $39.86 billion. Starbucks shares have gained 20.5% in the past year, and the Zacks Consensus Estimate for fiscal 2026 EPS implies a 21.1% year-over-year increase.
Starbucks CorporationStarbucks reduced debt by $1.8B, lowering leverage to 2.9x, improving balance sheet strength.
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