United

Uniswap

Apple

Nexo

<div class="finbold">
 <p class="paragraph">Starbucks (NASDAQ: SBUX) is one of the leading coffee brands in the world, with over 38,000 coffeehouses in 86 countries. However, Starbucks has also built an indirect position in the banking <a rel="noopener noreferrer nofollow" title="business" href="https://thebittimes.com/tag/business.html">business</a>, currently holding $1.872 <a rel="noopener noreferrer nofollow" title="billion" href="https://thebittimes.com/tag/billion.html">billion</a> in <a rel="noopener noreferrer nofollow" title="customer" href="https://thebittimes.com/tag/customer.html">customer</a> <a rel="noopener noreferrer nofollow" title="deposit" href="https://thebittimes.com/tag/deposit.html">deposit</a>s.</p>
 <p class="paragraph">This data is from the company’s earnings report for 2024’s second quarter (Q2), under the “stored value card liability” results.</p>
 <figure class="wp-block-image size-large"><img decoding="async" width="1024" height="341" src="https://cdn.thebittimes.com/images/2024/05/28/b8e80a40d743ea453d217b7a7f4638f4.webp" alt="" class="wp-image-179007" srcset="https://cdn.thebittimes.com/images/2024/05/28/b8e80a40d743ea453d217b7a7f4638f4.webp 1024w, https://cdn.thebittimes.com/images/2024/05/28/b8e80a40d743ea453d217b7a7f4638f4.webp 300w, https://cdn.thebittimes.com/images/2024/05/28/b8e80a40d743ea453d217b7a7f4638f4.webp 768w, https://cdn.thebittimes.com/images/2024/05/28/b8e80a40d743ea453d217b7a7f4638f4.webp 1536w, https://cdn.thebittimes.com/images/2024/05/28/b8e80a40d743ea453d217b7a7f4638f4.webp 2048w" sizes="(max-width: 1024px) 100vw, 1024px">
  <figcaption class="wp-element-caption">
   Earning reports; Liabilities and Shareholders’equity/(deficit). Source: Starbucks
  </figcaption>
 </figure>
 <p class="paragraph">Essentially, when a customer buys a Starbucks Card, the unredeemed amount represents stored value, similar to a bank deposit. The business is responsible for providing future value on redemption, which means that stored value represents a liability on financial reports.</p>
 <div class="border border-red-300 rounded-xl p-6 not-prose mb-6">
  <h3 class="text-2xl font-black mt-0 flex gap-x-3 mb-5">
   <svg width="32" height="32" viewbox="0 0 32 32" fill="none" xmlns="//www.w3.org/2000/svg"><path d="M4 10.6665V25.3332C4 28.2678 6.392 29.3332 8 29.3332H28V26.6665H8.016C7.4 26.6505 6.66667 26.4078 6.66667 25.3332C6.66667 24.2585 7.4 24.0158 8.016 23.9998H28V5.33317C28 3.8625 26.804 2.6665 25.3333 2.6665H8C6.392 2.6665 4 3.73184 4 6.6665V10.6665ZM8 5.33317H25.3333V21.3332H6.66667V6.6665C6.66667 5.59184 7.4 5.34917 8 5.33317Z" fill="#EF4444"> 
    </path> <path d="M15.996 18.6668L20.4626 14.2815C20.738 14.0166 20.9571 13.6989 21.1068 13.3473C21.2564 12.9957 21.3336 12.6176 21.3336 12.2355C21.3336 11.8534 21.2564 11.4752 21.1068 11.1236C20.9571 10.7721 20.738 10.4543 20.4626 10.1895C19.9074 9.64148 19.1587 9.33422 18.3786 9.33422C17.5985 9.33422 16.8498 9.64148 16.2946 10.1895L15.996 10.4801L15.6973 10.1881C15.1423 9.64023 14.3938 9.33301 13.614 9.33301C12.8341 9.33301 12.0856 9.64023 11.5306 10.1881C11.2552 10.453 11.0361 10.7707 10.8865 11.1223C10.7368 11.4739 10.6597 11.852 10.6597 12.2341C10.6597 12.6162 10.7368 12.9944 10.8865 13.346C11.0361 13.6975 11.2552 14.0153 11.5306 14.2801L15.996 18.6668Z" fill="#EF4444"> 
    </path>
   </svg> Picks for you</h3>
  <div class="grid md:grid-cols-2 gap-x-10 gap-y-3 md:gap-y-5 divide-y divide-gray-300 md:divide-y-0">
   <div class="md:odd:pr-4 md:odd:border-r odd:border-gray-300 pt-3 first:pt-0 md:pt-0">
    Nexo teams up with The Tie to introduce advanced real-time market analytics&nbsp; <span class="self-center text-xs text-slate-500">1 hour ago</span>
   </div>
   <div class="md:odd:pr-4 md:odd:border-r odd:border-gray-300 pt-3 first:pt-0 md:pt-0">
    LandRocker’s LRT token debuts on MEXC and Uniswap amid game launch <span class="self-center text-xs text-slate-500">1 hour ago</span>
   </div>
   <div class="md:odd:pr-4 md:odd:border-r odd:border-gray-300 pt-3 first:pt-0 md:pt-0">
    Argentina seeks Bitcoin adoption lessons from El Salvador&nbsp; <span class="self-center text-xs text-slate-500">2 hours ago</span>
   </div>
   <div class="md:odd:pr-4 md:odd:border-r odd:border-gray-300 pt-3 first:pt-0 md:pt-0">
    Buy alert: Bitcoin hourly chart signals imminent rally <span class="self-center text-xs text-slate-500">2 hours ago</span>
   </div>
  </div>
 </div>
 <div class="mb-4 bg-slate-50 rounded-md layout-adjustment">
  <div id="finbold.com_middle" style="min-width: 300px; min-height: 250px;">
  </div>
 </div>
 <p class="paragraph">Starbucks’s $1.87 <a rel="noopener noreferrer nofollow" title="billion" href="https://thebittimes.com/tag/billion.html">billion</a> in stored-value cards act as interest-free capital for the company, similar to an interest-free banking loan. Additionally, some funds on gift cards are never used, leading to what is known as “breakage revenue.” According to a <em>Markedium</em> report, this amounted to nearly $196 million for Starbucks in the past fiscal year.</p>
 <h2 class="wp-block-heading" id="h-starbucks-would-be-among-the-u-s-10-largest-banks">Starbucks would be among the U.S. 10% largest banks</h2>
 <p class="paragraph">Notably, the same report stated that this customer deposit amount puts Starbucks among the 10% largest banks in the United States by this metric. Nevertheless, Starbucks is not a formal bank and, apparently, does not intend to be.</p>
 <p class="paragraph">Over the years, the coffeehouse giant has collaborated with U.S. banks like Square (NYSE: SQ) and JP Morgan (NYSE: JPM) to improve the payment experience while partnering with Barclay in the United Kingdom, and Apple Pay and Visa in other parts of the world.</p>
 <p class="paragraph">In 2018, Starbucks announced plans to accept cryptocurrency payments, which rendered another partnership, this time with Bakkt, a custodial crypto wallet provider. As of 2023, customers could use the app to pay for a coffee using Bitcoin (BTC) and other cryptocurrencies.</p>
 <h2 class="wp-block-heading" id="h-starbucks-q2-2024-earnings-report">Starbucks Q2 2024 earnings report</h2>
 <p class="paragraph">Interestingly, Starbucks reported $8.56 billion in revenue for Q2 2024, a 1.8% decrease from the same period last year. The company’s net income also declined by 15% to $772.4 million, with a profit margin of 9.0%.</p>
 <p class="paragraph">Moreover, earnings per share (EPS) dropped to $0.68 from $0.79 in Q2 2023, missing analyst estimates by 16%.</p>
 <p class="paragraph">Despite the disappointing results, Starbucks holds over $1.8 billion in customer deposits through its stored value card liability. This amount surpasses the company’s quarterly net income, highlighting the significant role of the Starbucks Card in its business model</p>
 <p class="paragraph">Looking forward, Starbucks’ revenue is expected to grow 8.1% annually over the next three years, slightly lower than the 9.8% growth forecast for the US hospitality industry. Following the earnings report, SBUX stock has fallen by 10% month-over-month, reflecting investor concerns over the disappointing financial performance and future growth prospects.</p>
</div>
<p>Source: <a rel="noopener noreferrer nofollow" target="_blank" href="https://thebittimes.com/banking-business-starbucks-holds-over-1-8-billion-in-customer-deposits-tbt90148.html">https://thebittimes.com/banking-business-starbucks-holds-over-1-8-billion-in-customer-deposits-tbt90148.html</a></p>

Banking business? Starbucks holds over $1.8 billion in customer deposits

Table of Contents

TheBitTimes

Other articles published on May 28, 2024

ChatGPT-manufactured memecoin Turbo surges 2,000% in 3 months

SHIB price prediction: The next move of Shiba Inu holders should be…

MoonBag Ranked Best Meme Coin Over Bonk, Fantom - Investors Impressed By Presale Offers

AI Project Worldcoin Faces Scrutiny Over Biometric Data Collection Amid Privacy Concerns

Investors Maintain Positive Positions Despite Ripple’s Legal Battle

Metaplanet Further Embraces Bitcoin with ¥250 Million Purchase

Join our free newsletter for daily crypto updates!