Starbucks 2015 Annual Report Download - page 14

Available Information
Starbucks 10-K reports, along with all other reports and amendments filed with or furnished to the Securities and Exchange
Commission ("SEC"), are publicly available free of charge on the Investor Relations section of our website at
investor.starbucks.com or at www.sec.gov as soon as reasonably practicable after these materials are filed with or furnished to
the SEC. Our corporate governance policies, code of ethics and Board committee charters and policies are also posted on the
Investor Relations section of Starbucks website at investor.starbucks.com. The information on our website is not part of this or
any other report Starbucks files with, or furnishes to, the SEC.
Item 1A. Risk Factors
You should carefully consider the risks described below. If any of the risks and uncertainties described in the cautionary factors
described below actually occurs, our business, financial condition and results of operations, and the trading price of our
common stock could be materially and adversely affected. Moreover, we operate in a very competitive and rapidly changing
environment. New factors emerge from time to time and it is not possible to predict the impact of all these factors on our
business, financial condition or results of operation.
• Economic conditions in the U.S. and international markets could adversely affect our business and financial results.
As a retailer that is dependent upon consumer discretionary spending, our results of operations are sensitive to changes in
macro-economic conditions. Our customers may have less money for discretionary purchases and may stop or reduce their
purchases of our products or trade down to Starbucks or competitors' lower priced products as a result of job losses,
foreclosures, bankruptcies, increased fuel and energy costs, higher interest rates, higher taxes and reduced access to credit.
Decreases in customer traffic and/or average value per transaction will negatively impact our financial performance as reduced
revenues without a corresponding decrease in expenses result in sales de-leveraging, which creates downward pressure on
margins and also negatively impacts comparable store sales, net revenues, operating income and earnings per share. There is
also a risk that if negative economic conditions persist for a long period of time or worsen, consumers may make long-lasting
changes to their discretionary purchasing behavior, including less frequent discretionary purchases on a more permanent basis.
• Our success depends substantially on the value of our brands and failure to preserve their value, either through our
actions or those of our business partners, could have a negative impact on our financial results.
We believe we have built an excellent reputation globally for the quality of our products, for delivery of a consistently positive
consumer experience and for our corporate social responsibility programs. The Starbucks brand is recognized throughout the
world and we have received high ratings in global brand value studies. To be successful in the future, particularly outside of the
U.S., where the Starbucks brand and our other brands are less well-known, we believe we must preserve, grow and leverage the
value of our brands across all sales channels. Brand value is based in part on consumer perceptions on a variety of subjective
qualities.
Additionally, our business strategy, including our plans for new stores, foodservice, branded products and other initiatives,
relies significantly on a variety of business partners, including licensee and joint venture relationships, particularly in our
international markets, and third party manufacturers, distributors and retailers, particularly in our international Channel
Development business. Licensees and foodservice operators are often authorized to use our logos and provide branded
beverages, food and other products directly to customers. We provide training and support to, and monitor the operations of,
certain of these business partners, but the product quality and service they deliver may be diminished by any number of factors
beyond our control, including financial pressures they may face. We believe customers expect the same quality of products and
service from our licensees and foodservice providers as they do from us and we strive to ensure customers receive the same
quality of products and service experience whether they visit a company-operated store, licensed store or foodservice location.
We also source our food, beverage and other products from a wide variety of domestic and international business partners in
our supply chain operations, and in certain cases such products are produced or sourced by our licensees directly.
Business incidents, whether isolated or recurring and whether originating from us or our business partners, that erode consumer
trust, such as actual or perceived breaches of privacy, contaminated food, recalls or other potential incidents discussed in this
risk factors section, particularly if the incidents receive considerable publicity, including rapidly through social or digital media,
or result in litigation, can significantly reduce brand value and have a negative impact on our financial results. Consumer
demand for our products and our brand equity could diminish significantly if we or our licensees or other business partners fail
to preserve the quality of our products, are perceived to act in an unethical or socially irresponsible manner, including with
respect to the sourcing, content or sale of our products, fail to comply with laws and regulations or fail to deliver a consistently
positive consumer experience in each of our markets. Additionally, inconsistent uses of our brand and other of our intellectual
property assets, as well as failure to protect our intellectual property, including from unauthorized uses of our brand or other of
10 Starbucks Corporation 2015 Form 10-K