Strong comp store sales increases of 6%
globally and 7% in the U.S. drive record Q3 revenues of $4.2
billion
Channel Development revenues increase 13%
Consolidated operating margin expands to a Q3
record 18.5%
Company reiterates strong growth outlook;
introduces initial FY15 growth targets
Starbucks Corporation (NASDAQ:SBUX) today reported financial
results for its 13-week fiscal third quarter and 39-week fiscal
year to date ended June 29, 2014.
Q3 Fiscal 2014 Highlights:
- Consolidated net revenue growth
accelerated to 11%; net revenues totaled a Q3 record $4.2
billion
- Global comparable store sales increased
6%, marking the 18th consecutive quarter of global comp growth of
5% or greater
- Americas comp sales increased 6%; U.S.
comp sales increased 7%
- EMEA comp sales increased 3%
- China/Asia Pacific comp sales increased
7%
- Consolidated operating income increased
25%, to a Q3 record $769 million
- Consolidated operating margin expanded
200 bps, to a Q3 record 18.5%, primarily driven by sales
leverage
- Channel Development revenues increased
13%; operating margin expanded 800 bps to 37.1%
- Earnings per share increased 22% to a
Q3 record $0.67 per share
- The Company opened 344 net new stores
globally, ending the quarter with 20,863 stores across 64
countries
Updated Fiscal 2014
Targets
Following the strong performance year-to-date, the company is
updating the following fiscal 2014 targets:
- Consolidated operating margin
improvement now targeted at 200 bps over FY13, when excluding the
Kraft litigation charge in fiscal 2013
- Channel Development now targeting
approximately 600 bps improvement over FY13
- Earnings per share now expected to be
in the range of $2.70 to $2.72; or $2.65 to $2.67 when excluding an
estimated net benefit of $0.05 for certain FY14 non-GAAP
adjustments. Please refer to the GAAP to non-GAAP reconciliation at
the end of this release:
- Q4 EPS now in the range of $0.76 to
$0.78; or $0.73 to $0.75 when excluding a $0.03 estimated net
benefit as described in the above referenced reconciliation
- Net new stores now expected to be
approximately 1,550
- Americas: increased from 600 to
650
Fiscal 2015 Targets
The company introduces initial fiscal 2015 targets as
follows:
- Revenue growth of 10% or greater
- Global comparable store sales growth in
the mid single digits
- An additional 1,600 net new stores
globally
- Earnings per share growth of 15%-20%
over FY14 calculated based on Non-GAAP earnings per share
“Starbucks Q3 represents another quarter of outstanding
operating performance in which each of our segments contributed to
record results,” said Howard Schultz, chairman, president and ceo
of Starbucks Coffee Company. “The increasing power of the Starbucks
brand, the success of our best-in-class mobile, social and digital
technologies and our greatest asset - over 300,000 partners who
deliver the Starbucks Experience to over 70 million customers
around the world each week - position us to continue growing our
business around the world and into the future.”
“Starbucks record Q3 results demonstrate both the power of our
innovation and the opportunities for growth, globally and in the
U.S., that lie ahead. Importantly, record revenues and operating
margin reflect an acceleration of top-line growth and meaningful
contributions from all operating regions and our Channel
Development segment,” said Scott Maw, Starbucks cfo. “Our Q3
results give us confidence in our ability to deliver on our full
year fiscal 2014 targets and support the strong 2015 revenue and
profit growth targets we introduced today, despite continued
challenging economic and consumer headwinds in many of the global
markets in which we operate.”
Third Quarter
Fiscal 2014 Summary
Quarter Ended Jun 29, 2014 Comparable Store
Sales(1) Sales Growth Change in
Transactions Change in Ticket Consolidated
6% 2% 4% Americas 6% 2% 4% EMEA 3% 2%
2% CAP 7% 6% 1% (1) Includes only
Starbucks company-operated stores open 13 months or longer.
Operating Results Quarter Ended
($ in millions, except per share amounts)
Jun 29,
2014 Jun 30, 2013 Change Net New
Stores 344 341 3 Revenues(1) $4,153.7 $3,735.3 11% Operating
Income $768.5 $615.2 25% Operating Margin(1) 18.5% 16.5% 200 bps
EPS $0.67 $0.55 22%
(1) Prior period results have been
corrected to reflect an immaterial reclassification of certain fees
related to our foodservice operations; for full revised FY12 and
FY13 results, refer to http://investor.starbucks.com.
Consolidated net revenues were $4.2 billion in Q3 FY14, an
increase of 11% over Q3 FY13, driven primarily by 6% growth in
global comparable store sales and incremental revenues from 1,654
net new store openings over the past 12 months.
Consolidated operating income increased 25% to $768.5 million,
compared to $615.2 million for the same period a year ago.
Operating margin expanded 200 basis points to 18.5%, primarily
driven by sales leverage and lower commodity costs.
Q3 Americas
Segment Results
Quarter Ended ($ in millions)
Jun 29,
2014 Jun 30, 2013
Change Net New Stores 149 158 (9)
Revenues $3,057.7 $2,776.5 10% Operating Income $728.5 $619.3 18%
Operating Margin 23.8% 22.3%
150 bps
Net revenues for the Americas segment were $3.1 billion in Q3
FY14, an increase of 10% over Q3 FY13. The increase was driven by
6% growth in comparable store sales and incremental revenues from
759 net new store openings over the past 12 months.
Operating income of $728.5 million in Q3 FY14 increased 18% from
$619.3 million for the same period a year ago. Operating margin
expanded 150 basis points to 23.8%, primarily due to sales
leverage.
Q3 EMEA Segment
Results
Quarter Ended ($ in millions)
Jun 29,
2014 Jun 30, 2013
Change Net New Stores 37 43 (6)
Revenues $323.5 $287.2 13% Operating Income $29.2 $9.3 214%
Operating Margin 9.0% 3.2%
580 bps
Net revenues for the EMEA segment were $323.5 million in Q3
FY14, an increase of 13% over Q3 FY13. The growth was primarily due
to favorable foreign currency exchange and a 3% increase in
comparable store sales. Incremental revenues from 161 net new store
openings over the past 12 months also contributed.
Operating income increased 214% to $29.2 million in Q3 FY14,
from $9.3 million in the prior year quarter. Operating margin
expanded 580 basis points to 9.0%, primarily driven by sales
leverage and continued cost management.
Q3 China/Asia
Pacific Segment Results
Quarter Ended ($ in millions)
Jun 29,
2014 Jun 30, 2013
Change Net New Stores 160 119 41
Revenues $287.6 $233.7 23% Operating Income $100.8 $84.7 19%
Operating Margin 35.0% 36.2%
(120) bps
Net revenues for the China/Asia Pacific segment were $287.6
million in Q3 FY14, an increase of 23% over Q3 FY13. The increase
was primarily driven by incremental revenues from 740 net new store
openings over the past 12 months. A 7% increase in comparable store
sales, driven by strong traffic, also contributed to the net
revenue growth.
Operating income of $100.8 million in Q3 FY14 increased 19%
compared to the same period a year ago. Operating margin declined
120 basis points to 35.0%, driven by the portfolio shift to more
company-operated stores and unfavorable foreign currency exchange,
partially offset by sales leverage.
Q3 Channel
Development Segment Results
Quarter Ended ($ in millions)
Jun 29, 2014
Jun 30, 2013 Change Revenues(1) $375.3
$331.0 13% Operating Income $139.3 $96.3 45% Operating Margin(1)
37.1% 29.1% 800 bps
(1) Prior period results have been
corrected to reflect an immaterial reclassification of certain fees
related to our foodservice operations; for full revised FY12 and
FY13 results, refer to http://investor.starbucks.com.
Net revenues for the Channel Development segment were $375.3
million in Q3 FY14, an increase of 13% over Q3 FY13, primarily
driven by increased sales of premium single serve products and
higher sales volumes of packaged coffee in the U.S.
Operating income grew 45% to $139.3 million in Q3 FY14 compared
to $96.3 million for the same period a year ago. Operating margin
increased 800 basis points to 37.1% in Q3 FY14, primarily due to
lower coffee costs and improved inventory management compared to
the prior year.
Q3 All Other
Segments Results
Quarter Ended ($ in millions)
Jun 29, 2014
Jun 30, 2013 Change Net New Stores (2)
21 (23) Revenues(1) $109.6 $106.9 3% Operating Loss ($18.9)
($9.4) 101%
(1) Prior period results have been
corrected to reflect an immaterial reclassification of certain fees
related to our foodservice operations; for full revised FY12 and
FY13 results, refer to http://investor.starbucks.com.
Net revenues for All Other Segments were $109.6 million in Q3
FY14, an increase of 3% compared to Q3 FY13, primarily driven by
increased sales in our emerging businesses.
Q3 FY14 operating loss increased to $18.9 million compared to a
loss of $9.4 million for the same period a year ago, driven by
investments to support growth in our emerging businesses.
Year to Date
Financial Results
Three Quarters Ended Jun 29, 2014
Comparable Store Sales(1) Sales Growth
Change in Transactions Change in
Ticket Consolidated 6% 3% 3% Americas 6% 3% 3% EMEA 5% 3% 1%
CAP 7% 6% 1% (1) Includes only
Starbucks company-operated stores open 13 months or longer.
Operating Results
Three Quarters Ended ($ in millions, except per share
amounts)
Jun 29, 2014 Jun 30, 2013
Change Net New Stores(1) 1,096 1,143 (47)
Revenues(2) $12,267.1 $11,078.1 11% Operating Income $2,226.3
$1,789.9 24% Operating Margin(2) 18.1% 16.2% 190 bps EPS
$1.94 $1.63 19%
(1) Net new stores for the three quarters
ended June 30, 2013 includes 337 Teavana stores acquired in the
second quarter of fiscal 2013.
(2) Prior period results have been
corrected to reflect an immaterial reclassification of certain fees
related to our foodservice operations; for full revised FY12 and
FY13 results, refer to http://investor.starbucks.com.
Company Updates
- In June, Starbucks introduced new
FizzioTM handcrafted sodas and Teavana® Shaken Iced Teas in the
U.S. to further extend its Refreshment offerings. The FizzioTM soda
machine is a breakthrough in carbonation technology with the
ability to deliver an unmatched soda experience. FizzioTM sodas are
available in over one third of U.S. company-operated retail
stores.
- Starbucks opened its first
company-operated Starbucks® store at Walt Disney World Resort. It
also recently opened its first store in Bogota, Colombia and its
first store in Hanoi, Vietnam. The company expanded the Teavana®
Teabar concept to Los Angeles and opened the second Teabar in New
York; now operating five Teavana® Fine Teas + Teabars in the
U.S.
- Starbucks and Duracell Powermat
announced that they have begun a national rollout of Powermat
wireless charging, beginning with stores in the San Francisco Bay
Area, with expansion to additional major markets in 2015.
- Starbucks, in partnership with Arizona
State University, launched the Starbucks College Achievement Plan,
empowering thousands of U.S. partners (employees) to complete a
bachelor's degree with Starbucks offering full tuition
reimbursement for their junior and senior years for eligible
partners.
- Starbucks hosted its third Partner
Family Forum in China, gathering more than 1,200 Starbucks South
China partners together in Guangzhou. This was followed by the
first-ever Partner Family Forums held in the U.S.
- The Company's unsecured debt rating was
upgraded to A3 with a stable outlook by Moody's Investors Service.
The upgrade affects the company’s nearly $2.1 billion senior
unsecured bonds. Moody’s also affirmed the company’s short-term
commercial paper rating at P-2. Starbucks had held a Baa1 rating
with a stable outlook since November 25, 2013.
- The Company repurchased 4.2 million
shares of common stock in Q3 FY14; approximately 18 million shares
remain available for purchase under current authorizations.
- The Board of Directors declared a cash
dividend of $0.26 per share, payable on August 22, 2014 to
shareholders of record as of August 7, 2014.
Conference Call
Starbucks will be holding a conference call today at 2:00 p.m.
Pacific Time, which will be hosted by Howard Schultz, chairman,
president and ceo, Troy Alstead, coo, and Scott Maw, cfo. The call
will be webcast and can be accessed at http://investor.starbucks.com. A replay of the
webcast will be available through approximately 9:00 p.m. Pacific
Time on Thursday, August 21, 2014.
The company’s consolidated statements of earnings, operating
segment results, and other additional information have been
provided on the following pages in accordance with current year
classifications. This information should be reviewed in conjunction
with this press release. Please refer to the company’s Annual
Report on Form 10-K for the fiscal year ended September 29,
2013 for additional information.
About Starbucks
Since 1971, Starbucks Coffee Company has been committed to
ethically sourcing and roasting high-quality arabica coffee. Today,
with stores around the globe, the company is the premier roaster
and retailer of specialty coffee in the world. Through our
unwavering commitment to excellence and our guiding principles, we
bring the unique Starbucks Experience to life for every customer
through every cup. To share in the experience, please visit us in
our stores or online at www.starbucks.com.
Forward-Looking
Statements
This release contains forward-looking statements relating to
certain company initiatives, strategies and plans, as well as
trends in or expectations regarding our diversified business model,
the strength, health and potential of our business, operations and
brand, our innovation, our ability to meet our targets, our ability
to leverage our assets, including our brand, and our mobile, social
and digital technologies, growth and growth opportunities and
related investments, earnings per share, revenues, operating
margins, profits, capital expenditures, comparable store sales and
net new stores. These forward-looking statements are based on
currently available operating, financial and competitive
information and are subject to a number of significant risks and
uncertainties. Actual future results may differ materially
depending on a variety of factors including, but not limited to,
coffee, dairy and other raw material prices and availability, costs
associated with, and the successful execution of, the company's
initiatives, strategies and plans, the acceptance of the company's
products by our customers, fluctuations in U.S. and international
economies and currencies, the impact of competition, the effect of
legal proceedings, and other risks detailed in the company filings
with the Securities and Exchange Commission, including the “Risk
Factors” section of Starbucks Annual Report on Form 10-K for the
fiscal year ended September 29, 2013. The company assumes no
obligation to update any of these forward-looking statements.
STARBUCKS CORPORATION CONSOLIDATED
STATEMENTS OF EARNINGS
(unaudited, in millions, except per share
data)
Quarter Ended Quarter Ended Jun 29,
2014 Jun 30, 2013
%Change
Jun 29, 2014 Jun 30, 2013
As a % of total
net revenues (1)
Net revenues: Company-operated stores $ 3,290.5 $ 2,986.3
10.2 % 79.2 % 79.9 % Licensed stores 408.1 342.0 19.3 9.8 9.2 CPG,
foodservice and other(1) 455.1 407.0 11.8 11.0
10.9
Total net revenues 4,153.7 3,735.3
11.2 100.0 100.0 Cost of sales including
occupancy costs 1,711.5 1,597.6 7.1 41.2 42.8 Store operating
expenses 1,176.5 1,084.1 8.5 28.3 29.0 Other operating expenses(1)
120.6 98.9 21.9 2.9 2.6 Depreciation and amortization expenses
180.1 153.3 17.5 4.3 4.1 General and administrative expenses 269.4
249.6 7.9 6.5 6.7 Total operating
expenses 3,458.1 3,183.5 8.6 83.3 85.2 Income from equity investees
72.9 63.4 15.0 1.8 1.7
Operating
income 768.5 615.2 24.9 18.5
16.5 Interest income and other, net 19.4 3.5 454.3 0.5 0.1
Interest expense (16.4 ) (6.3 ) 160.3 (0.4 ) (0.2 ) Earnings before
income taxes 771.5 612.4 26.0 18.6 16.4 Income taxes 259.0
194.6 33.1 6.2 5.2 Net earnings including
noncontrolling interests 512.5 417.8 22.7 12.3 11.2 Net earnings
attributable to noncontrolling interests (0.1 ) — nm —
—
Net earnings attributable to Starbucks
$ 512.6 $ 417.8
22.7 % 12.3
%
11.2 % Net earnings per common share -
diluted $ 0.67 $ 0.55
21.8 % Weighted avg. shares outstanding - diluted
761.0 761.9 Cash dividends declared per share $ 0.26 $ 0.21
Supplemental Ratios: Store operating expenses as a
percentage of company-operated store revenues 35.8 % 36.3 %
Effective tax rate including noncontrolling interests 33.6 % 31.8 %
(1) Prior period results have been
corrected to reflect an immaterial reclassification of certain fees
related to our foodservice operations; for full revised FY12 and
FY13 results, refer to http://investor.starbucks.com.
Three Quarters Ended Three
Quarters Ended Jun 29, 2014 Jun 30,
2013
%Change
Jun 29, 2014 Jun 30, 2013
As a % of total
net revenues (1)
Net revenues: Company-operated stores $ 9,702.3 $ 8,783.7
10.5 % 79.1 % 79.3 % Licensed stores 1,166.1 1,014.2 15.0 9.5 9.2
CPG, foodservice and other(1) 1,398.7 1,280.2 9.3
11.4 11.6
Total net revenues 12,267.1
11,078.1 10.7 100.0 100.0 Cost of sales
including occupancy costs 5,135.7 4,748.6 8.2 41.9 42.9 Store
operating expenses 3,486.1 3,212.2 8.5 28.4 29.0 Other operating
expenses(1) 346.3 330.8 4.7 2.8 3.0 Depreciation and amortization
expenses 524.2 455.3 15.1 4.3 4.1 General and administrative
expenses 752.6 711.7 5.7 6.1 6.4 Litigation charge/(credit) (20.2 )
— nm (0.2 ) — Total operating expenses 10,224.7
9,458.6 8.1 83.4 85.4 Income from equity investees 183.9
170.4 7.9 1.5 1.5
Operating income
2,226.3 1,789.9 24.4 18.1 16.2
Interest income and other, net 57.0 51.4 10.9 0.5 0.5 Interest
expense (47.7 ) (19.0 ) 151.1 (0.4 ) (0.2 ) Earnings before income
taxes 2,235.6 1,822.3 22.7 18.2 16.4 Income taxes 755.4
581.4 29.9 6.2 5.2 Net earnings including
noncontrolling interests 1,480.2 1,240.9 19.3 12.1 11.2 Net
earnings attributable to noncontrolling interests (0.1 ) 0.6
nm — —
Net earnings attributable to Starbucks
$ 1,480.3 $ 1,240.3
19.4
%
12.1 % 11.2 % Net earnings
per common share - diluted $ 1.94 $
1.63 19.0 % Weighted avg. shares
outstanding - diluted 763.9 761.5 Cash dividends declared
per share $ 0.78 $ 0.63
Supplemental Ratios: Store
operating expenses as a percentage of company-operated store
revenues 35.9 % 36.6 % Effective tax rate including noncontrolling
interests 33.8 % 31.9 %
(1) Prior period results have been
corrected to reflect an immaterial reclassification of certain fees
related to our foodservice operations; for full revised FY12 and
FY13 results, refer to http://investor.starbucks.com.
Segment Results
(in millions)
Americas
Jun 29, 2014
Jun 30, 2013
%Change
Jun 29, 2014
Jun 30, 2013
As a % of Americas
Quarter
Ended
total net revenues Net revenues: Company-operated stores $
2,772.3 $ 2,536.9 9.3 % 90.7 % 91.4 % Licensed stores 275.6 228.5
20.6 9.0 8.2 CPG, foodservice and other 9.8 11.1
(11.7 ) 0.3 0.4
Total net revenues
3,057.7 2,776.5 10.1 100.0 100.0
Cost of sales including occupancy costs 1,130.0 1,051.2 7.5 37.0
37.9 Store operating expenses 1,002.4 934.8 7.2 32.8 33.7 Other
operating expenses 26.2 23.0 13.9 0.9 0.8 Depreciation and
amortization expenses 119.5 105.2 13.6 3.9 3.8 General and
administrative expenses 51.1 43.0 18.8 1.7 1.5
Total operating expenses 2,329.2 2,157.2 8.0
76.2 77.7
Operating income $
728.5 $ 619.3 17.6
% 23.8 % 22.3 % Supplemental
Ratios:
Store operating expenses as a percentage
of company-operated store revenues
36.2 % 36.8 %
Three Quarters
Ended
Net revenues: Company-operated stores $ 8,120.6 $ 7,499.5 8.3 %
90.8 % 91.2 % Licensed stores 787.6 684.4 15.1 8.8 8.3 CPG,
foodservice and other 31.2 37.3 (16.4 ) 0.3
0.5
Total net revenues 8,939.4 8,221.2
8.7 100.0 100.0 Cost of sales including
occupancy costs 3,353.8 3,143.6 6.7 37.5 38.2 Store operating
expenses 2,965.9 2,786.6 6.4 33.2 33.9 Other operating expenses
75.2 74.1 1.5 0.8 0.9 Depreciation and amortization expenses 346.6
316.2 9.6 3.9 3.8 General and administrative expenses 131.9
143.9 (8.3 ) 1.5 1.8 Total operating expenses
6,873.4 6,464.4 6.3 76.9 78.6 Income from equity investees —
2.4 (100.0 ) — —
Operating income
$ 2,066.0 $ 1,759.2
17.4 % 23.1 % 21.4 %
Supplemental Ratios: Store operating expenses as a
percentage of company-operated store revenues 36.5 % 37.2 %
EMEA
Jun 29, 2014
Jun 30, 2013
%Change
Jun 29, 2014
Jun 30, 2013
As a % of EMEA
Quarter
Ended
total net revenues Net revenues: Company-operated stores $
251.8 $ 228.2 10.3 % 77.8 % 79.5 % Licensed stores 60.8 49.6 22.6
18.8 17.3 CPG, foodservice and other 10.9 9.4 16.0
3.4 3.3
Total net revenues 323.5
287.2 12.6 100.0 100.0 Cost of sales
including occupancy costs 161.4 147.5 9.4 49.9 51.4 Store operating
expenses 91.4 85.8 6.5 28.3 29.9 Other operating expenses 12.5 9.9
26.3 3.9 3.4 Depreciation and amortization expenses 15.1 13.7 10.2
4.7 4.8 General and administrative expenses 15.0 21.0
(28.6 ) 4.6 7.3 Total operating expenses 295.4 277.9
6.3 91.3 96.8 Income from equity investees 1.1 — nm
0.3 —
Operating income $ 29.2
$ 9.3 214.0 % 9.0
% 3.2 % Supplemental Ratios: Store
operating expenses as a percentage of company-operated store
revenues 36.3 % 37.6 %
Three Quarters
Ended
Net revenues: Company-operated stores $ 766.3 $ 699.9 9.5 % 78.8 %
80.8 % Licensed stores 175.8 139.5 26.0 18.1 16.1 CPG, foodservice
and other 30.9 27.2 13.6 3.2 3.1
Total net revenues 973.0 866.6 12.3
100.0 100.0 Cost of sales including occupancy costs
487.9 440.8 10.7 50.1 50.9 Store operating expenses 280.1 259.3 8.0
28.8 29.9 Other operating expenses 35.9 29.0 23.8 3.7 3.3
Depreciation and amortization expenses 44.5 41.6 7.0 4.6 4.8
General and administrative expenses 47.1 59.0 (20.2 )
4.8 6.8 Total operating expenses 895.5 829.7 7.9 92.0
95.7 Income from equity investees 3.0 — nm 0.3
—
Operating income $ 80.5
$ 36.9 118.2 % 8.3
% 4.3 % Supplemental Ratios: Store
operating expenses as a percentage of company-operated store
revenues 36.6 % 37.0 %
China / Asia Pacific (CAP)
Jun 29, 2014
Jun 30, 2013
%Change
Jun 29, 2014
Jun 30, 2013
As a % of CAP
Quarter
Ended
total net revenues Net revenues: Company-operated stores $
217.0 $ 171.6 26.5 % 75.5 % 73.4 % Licensed stores 70.6 62.1
13.7 24.5 26.6
Total net revenues
287.6 233.7 23.1 100.0 100.0
Cost of sales including occupancy costs 137.8 112.5 22.5 47.9 48.1
Store operating expenses 54.8 42.2 29.9 19.1 18.1 Other operating
expenses 13.2 12.0 10.0 4.6 5.1 Depreciation and amortization
expenses 11.3 8.6 31.4 3.9 3.7 General and administrative expenses
16.0 14.0 14.3 5.6 6.0 Total operating
expenses 233.1 189.3 23.1 81.1 81.0 Income from equity investees
46.3 40.3 14.9 16.1 17.2
Operating
income $ 100.8 $ 84.7
19.0 % 35.0 % 36.2 %
Supplemental Ratios: Store operating expenses as a
percentage of company-operated store revenues 25.3 % 24.6 %
Three Quarters
Ended
Net revenues: Company-operated stores $ 621.1 $ 478.6 29.8 % 75.8 %
72.4 % Licensed stores 198.7 182.8 8.7 24.2
27.6
Total net revenues 819.8 661.4
23.9 100.0 100.0 Cost of sales including
occupancy costs 398.0 323.9 22.9 48.5 49.0 Store operating expenses
158.5 121.9 30.0 19.3 18.4 Other operating expenses 34.8 33.7 3.3
4.2 5.1 Depreciation and amortization expenses 33.4 24.4 36.9 4.1
3.7 General and administrative expenses 43.1 37.5
14.9 5.3 5.7 Total operating expenses 667.8 541.4
23.3 81.5 81.9 Income from equity investees 116.8 105.3
10.9 14.2 15.9
Operating income
$ 268.8 $ 225.3
19.3 % 32.8 % 34.1 %
Supplemental Ratios: Store operating expenses as a
percentage of company-operated store revenues 25.5 % 25.5 %
Channel Development
Jun 29, 2014
Jun 30, 2013
%Change
Jun 29, 2014
Jun 30, 2013
As a % of Channel Development
Quarter
Ended
total net revenues (1)
Net revenues: CPG $ 286.6 $ 246.9 16.1 % 76.4 % 74.6 %
Foodservice(1) 88.7 84.1 5.5 23.6 25.4
Total net revenues 375.3 331.0 13.4
100.0 100.0 Cost of sales 208.3 213.1 (2.3 ) 55.5
64.4 Other operating expenses(1) 48.3 39.0 23.8 12.9 11.8
Depreciation and amortization expenses 0.4 0.2 100.0 0.1 0.1
General and administrative expenses 4.5 5.5 (18.2 )
1.2 1.7 Total operating expenses 261.5 257.8 1.4 69.7
77.9 Income from equity investees 25.5 23.1 10.4 6.8
7.0
Operating income $ 139.3
$ 96.3 44.7 % 37.1
% 29.1 %
Three Quarters
Ended
Net revenues: CPG $ 875.1 $ 789.8 10.8 % 76.3 % 75.7 %
Foodservice(1) 271.7 253.7 7.1 23.7 24.3
Total net revenues 1,146.8 1,043.5
9.9 100.0 100.0 Cost of sales 667.5 660.9 1.0
58.2 63.3 Other operating expenses(1) 142.9 140.5 1.7 12.5 13.5
Depreciation and amortization expenses 1.2 0.9 33.3 0.1 0.1 General
and administrative expenses 13.8 16.8 (17.9 ) 1.2
1.6 Total operating expenses 825.4 819.1 0.8 72.0
78.5 Income from equity investees 64.1 62.7 2.2 5.6
6.0
Operating income $ 385.5
$ 287.1 34.3 %
33.6 % 27.5 %
(1) Prior period results have been
corrected to reflect an immaterial reclassification of certain fees
related to our foodservice operations; for full revised FY12 and
FY13 results, refer to http://investor.starbucks.com.
All Other Segments
Jun 29, 2014 Jun 30, 2013
%Change
Quarter
Ended
Net revenues: Company-operated stores $ 49.4 $ 49.6 (0.4 )%
Licensed stores 1.1 1.8 (38.9 ) CPG, foodservice and other(1) 59.1
55.5 6.5
Total net revenues 109.6
106.9 2.5 Cost of sales including occupancy costs
65.9 66.5 (0.9 ) Store operating expenses 27.9 21.3 31.0 Other
operating expenses(1) 20.5 15.2 34.9 Depreciation and amortization
expenses 3.9 3.6 8.3 General and administrative expenses 10.3
9.7 6.2 Total operating expenses 128.5 116.3
10.5
Operating loss $ (18.9 )
$ (9.4 ) 101.1 %
Three Quarters
Ended
Net revenues: Company-operated stores $ 194.3 $ 105.7 83.8 %
Licensed stores 4.0 7.5 (46.7 ) CPG, foodservice and other(1) 189.8
172.2 10.2
Total net revenues 388.1
285.4 36.0 Cost of sales including occupancy costs
217.2 172.5 25.9 Store operating expenses 81.6 44.4 83.8 Other
operating expenses(1) 58.1 53.8 8.0 Depreciation and amortization
expenses 11.3 7.9 43.0 General and administrative expenses 32.9
24.8 32.7 Total operating expenses 401.1 303.4
32.2
Operating loss $ (13.0 )
$ (18.0 ) (27.8 )%
(1) Prior period results have been
corrected to reflect an immaterial reclassification of certain fees
related to our foodservice operations; for full revised FY12 and
FY13 results, refer to http://investor.starbucks.com.
Supplemental
Information
The following supplemental information is provided for
historical and comparative purposes.
Fiscal Third
Quarter 2014 U.S. Supplemental Data
Quarter Ended ($
in millions)
Jun 29, 2014 Jun 30, 2013
Change Revenues $2,731.2
$2,450.2 11% Comparable Store Sales Growth(1) 7% 9% Change in
Transactions 2% 7% Change in Ticket 5% 2%
(1) Includes only Starbucks company-operated stores
open 13 months or longer
Store
Data:
Net stores opened (closed) during the period
Quarter Ended Three Quarters
Ended Stores open as of Jun 29, 2014
Jun 30, 2013 Jun 29, 2014
Jun 30, 2013 Jun 29, 2014 Jun
30, 2013 Americas Company-operated stores 69 62 155 112
8,233 7,914 Licensed stores 80 96 264 228
5,679 5,239 149 158 419 340
13,912 13,153 EMEA(1) Company-operated stores (3 ) 1
1 (23 ) 839 844 Licensed stores 40 42 132 95
1,263 1,097 37 43 133 72
2,102 1,941 CAP Company-operated stores 45 48 159 161 1,065
827 Licensed stores 115 71 384 230
3,360 2,858 160 119 543 391
4,425 3,685 All Other Segments(2) Company-operated stores 10
27 21 336 378 350 Licensed stores (12 ) (6 ) (20 ) 4 46
80 (2 ) 21 1 340 424 430
Total Company 344 341
1,096 1,143 20,863
19,209
(1) EMEA store data has been adjusted for
the transfer of certain company-operated stores to licensed stores
in the second quarter of fiscal 2014.
(2) Net new stores for the three quarters
ended June 30, 2013 includes 337 Teavana stores acquired in
the second quarter of fiscal 2013.
Non-GAAP Disclosure
In addition to the GAAP results provided in this release, the
company provides expected non-GAAP earnings per share for Q4 fiscal
2014 and full year fiscal 2014. These non-GAAP financial
measures are not in accordance with, or an alternative for,
generally accepted accounting principles in the United
States. The GAAP measure most directly comparable to non-GAAP
earnings per share is diluted net earnings per share.
The expected Q4 fiscal 2014 and full year fiscal 2014 non-GAAP
earnings per share being furnished exclude the estimated
non-routine net benefit related to the sale of certain retail
operations that may close in the fourth quarter of fiscal 2014. The
full year fiscal 2014 non-GAAP earnings per share being furnished
also exclude the benefit recognized from a litigation credit in Q1
fiscal 2014. The company’s management believes that providing these
non-GAAP financial measures better enables investors to understand
and evaluate the company’s prospective operating
performance. More specifically, management excludes these two
non-routine benefits because it believes that the impacts of these
benefits do not reflect expected future gains or expenses beyond
fiscal 2014 and do not contribute to a meaningful evaluation of the
company’s future operating performance or comparisons to the
company’s past operating performance.
These non-GAAP financial measures may have limitations as
analytical tools, and these measures should not be considered in
isolation or as a substitute for analysis of the company’s results
as reported under GAAP. Other companies may calculate these
non-GAAP financial measures differently than the company does,
limiting the usefulness of those measures for comparative
purposes.
STARBUCKS CORPORATION
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP
MEASURES
(unaudited)
Quarter Ended Year Ended Sep 28, 2014
Sep 28, 2014 Consolidated Projected diluted
net earnings per share (GAAP) $0.76 - $0.78 $2.70 - $2.72
Litigation credit — (0.02 ) Projected net benefit on transactions
that may close in Q4 2014 (0.03 ) (0.03 ) Projected non-GAAP
earnings per share $0.73 - $0.75 $2.65 - $2.67
Starbucks CorporationInvestor Relations:JoAnn DeGrande,
206-318-7118investorrelations@starbucks.comorMedia:Jim
Olson, 206-318-7100press@starbucks.com
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