Starbucks Reports Record Fourth Quarter and Fiscal 2012 Results
Starbucks Reports Record Fourth Quarter and Fiscal 2012 Results
Q4 Revenues up 11% to a Record $3.4 Billion
Q4 EPS of $0.46; Up 24% After Excluding Non-Routine Gains in Prior Year
Strong Traffic Drives 7% US Comparable Store Sales Growth; 6% Global Growth
Channel Development Revenue Grows 32%
Board Raises Quarterly Cash Dividend 24% on Strength of Business and Outlook
Business Wire
SEATTLE -- November 01, 2012
Starbucks Corporation (NASDAQ:SBUX) today reported financial results for its
13-week fiscal fourth quarter and 52-week fiscal year ended September 30,
2012. When comparing with prior year results, note that fiscal 2011 included
non-routine gains related to the sale of corporate real estate and the
acquisition of the company’s joint venture operations in Switzerland and
Austria. A reconciliation of select FY11 GAAP measures to non-GAAP measures is
included at the end of this document.
Fiscal Fourth Quarter 2012 Highlights:
* Total net revenues increased 11% to a fourth-quarter record of $3.4
billion
* Global comparable store sales increased 6% driven by a 5% increase in
traffic and a 1% increase in average ticket
* Americas comparable store sales increased 7% driven by 5% growth in
traffic and 2% growth in average ticket
* Operating margin expanded 60 basis points to 15.4% over the prior year’s
operating margin of 14.8%, which included a 100 basis point benefit from a
non-routine gain in Q4 FY11
* Operating margin expanded 160 basis points when compared to prior
year non-GAAP operating margin of 13.8% after excluding the
non-routine gain in Q4 FY11
* EPS was $0.46 per share compared to the prior year EPS of $0.47 per share,
which included $0.10 relating to non-routine gains in Q4 FY11
* Fourth quarter EPS of $0.46 grew 24% over Q4 FY11 non-GAAP EPS of
$0.37 per share, which excluded the non-routine gains in Q4 FY11
* EPS includes charges of $0.02 per share related to store portfolio
optimization initiatives in Europe
* The Board of Directors declared a cash dividend of $0.21 per share, a 24%
increase from $0.17 per share
Fiscal Year 2012 Highlights:
* Total net revenues increased 14% reaching a record $13.3 billion
* Global comparable store sales increased 7% driven by a 6% increase in
traffic and a 1% increase in average ticket
* Americas comparable store sales increased 8% driven by a 6% increase
in traffic and a 2% increase in average ticket
* Channel Development revenue grew 50% to $1.3 billion
* The company opened 1,063 net new stores globally
* Operating margin improved 20 basis points to 15.0% over the prior year’s
operating margin of 14.8%, which included a non-routine gain in FY11,
despite 160 basis points of impact due to higher commodity costs in FY12
* Operating margin expanded 50 basis points when compared to prior year
non-GAAP operating margin of 14.5% after excluding the non-routine
gain from FY11
* EPS increased 10% to $1.79 per share compared to the prior year EPS of
$1.62 per share, which included $0.10 relating to non-routine gains in
FY11
* EPS of $1.79 grew 18% over the prior year non-GAAP EPS of $1.52,
excluding the non-routine gains in FY11
* Operating cash flow totaled $1.7 billion
* Starbucks returned approximately $1.1 billion to shareholders through
share repurchases and dividend payments
“Our Q4 and overall 2012 fiscal year performance demonstrates the strength of
our business and brand,” said Howard Schultz, chairman, president and chief
executive officer, Starbucks Coffee Company. “The resiliency and relevance of
our U.S. retail business, acceleration of the Channel Development business and
expansion in Asia all contributed significantly to our strong results. I am
incredibly proud of our 200,000 Starbucks partners around the world who have
contributed to the success of the company and I am optimistic about achieving
our aspirations for the future. “
“Our excellent fourth quarter and full fiscal year results reflect the
strength of our business and the solid execution by our partners, specifically
illustrated in the fourth quarter by strong traffic growth, continued momentum
in Channel Development, and rapid earnings growth,” stated Troy Alstead, chief
financial officer. “By delivering relevant innovation to our customers while
increasing focus on execution and operating efficiencies, we drove sales
growth and expanded profit margins. On the strength of our business in fiscal
2012 and the momentum we carry into the new fiscal year, we remain confident
in our fiscal 2013 outlook of continued strong profitable growth on a global
scale.”
Fourth Quarter Fiscal 2012 Summary
Quarter Ended Sep 30, 2012
Comparable Store Sales^(1) Sales Growth Change in Change in
Transactions Ticket
Consolidated 6% 5% 1%
Americas 7% 5% 2%
EMEA (1%) 0% (1%)
CAP 10% 7% 2%
(1) Includes only Starbucks company-operated stores open 13 months or longer.
Operating Results Quarter Ended
($ in millions, except per Sep 30, 2012 Oct 2, 2011 Change
share amounts)
Net New Stores ^(1) 415 (15) 430
Revenues $3,364.2 $3,031.9 11%
Operating Income $519.6 $448.3 16%
Operating Margin 15.4% 14.8% 60 bps
EPS $0.46 $0.47 (2%)
(1) Net new stores includes the addition of 20 La Boulange company-operated
cafés in the fourth quarter of fiscal 2012 and the closure of 248 licensed
Seattle's Best Coffee locations in Borders Bookstores in the fourth quarter of
fiscal 2011.
Consolidated net revenues reached a fourth-quarter record $3.4 billion in Q4
FY12, an increase of 11% over Q4 FY11. The increase was primarily due to a 6%
increase in global comparable stores sales, 32% revenue growth in Channel
Development and 14% revenue growth in licensed stores. The 6% increase in
comparable store sales was comprised of a 5% increase in the number of
transactions and a 1% increase in average ticket.
Consolidated operating income increased 16% to a record $519.6 million,
compared to $448.3 million for the same period a year ago. Operating margin
expanded 60 basis points to a record 15.4% this quarter, compared to 14.8% in
the same period last year. Operating margin expanded 160 basis points from
13.8% after excluding the non-routine gain in the prior year. Increased sales
leverage was the primary driver of margin expansion.
Q4 Americas Segment Results
Quarter Ended
($ in millions) Sep 30, 2012 Oct 2, 2011 Change
Net New Stores^(1) 250 (124) 374
Revenues $2,511.7 $2,296.4 9%
Operating Income $536.3 $444.2 21%
Operating Margin 21.4% 19.3% 210 bps
(1) Net new stores includes the addition of 20 La Boulange company-operated
cafés in the fourth quarter of fiscal 2012 and the closure of 248 licensed
Seattle's Best Coffee locations in Borders Bookstores in the fourth quarter of
fiscal 2011.
Net revenues for the Americas segment were $2.5 billion in Q4 FY12, an
increase of 9% over Q4 FY11. The increase was primarily due to a 7% increase
in comparable store sales, comprised of a 5% increase in the number of
transactions and a 2% increase in average ticket. Also contributing to the
increase were incremental revenues from 504 net new store openings over the
past 12 months.
Operating income increased to $536.3 million in Q4 FY12, compared to $444.2
million for the same period a year ago. Operating margin increased 210 basis
points to 21.4% in Q4 FY12 primarily due to increased sales leverage.
Q4 EMEA
Segment
Results
Quarter Ended
($ in Sep Oct 2,
millions) 30, 2011 Change
2012
Net New 33 28 5
Stores
Revenues $283.7 $290.1 (2%)
Operating
Income / ($6.5) $2.5 nm
(Loss)
Operating (2.3%) 0.9% (320)
Margin bps
Net revenues for the EMEA segment were $283.7 million in Q4 FY12, a decrease
of 2% over Q4 FY11 primarily driven by unfavorable foreign currency exchange
and partially offset by 29% revenue growth in licensed stores.
The EMEA segment had an operating loss of $6.5 million in Q4 FY12, compared to
operating income of $2.5 million for the same period a year ago. Operating
margin decreased 320 basis points to -2.3% compared to 0.9% in the prior-year
period. The margin contraction was driven by costs related to store portfolio
optimization initiatives in Europe, which had 410 basis points of impact.
Excluding these costs, operating margin expanded as a result of improved
operational efficiencies.
Q4
China/Asia
Pacific
Segment
Results
Quarter Ended
($ in Sep Oct 2,
millions) 30, 2011 Change
2012
Net New 132 81 51
Stores
Revenues $198.0 $161.2 23%
Operating $65.2 $58.5 11%
Income
Operating 32.9% 36.3% (340)
Margin bps
Net revenues for the China/Asia Pacific segment were $198.0 million in Q4
FY12, an increase of 23% over Q4 FY11. The increase was primarily due to
incremental revenues from 154 net new company-operated store openings over the
last 12 months and a 10% increase in comparable store sales. The increase in
comparable store sales was attributable to a 7% increase in number of
transactions and a 2% increase in average ticket.
Operating income increased 11% to $65.2 million in Q4 FY12, compared to $58.5
million for the same period a year ago. Operating margin decreased 340 basis
points to 32.9% in Q4 FY12 compared to 36.3% in the prior-year period. The
margin decline was primarily due to increased spending to support accelerated
store growth in China.
Q4 Channel
Development
Segment
Results
Quarter Ended
($ in Sep Oct 2,
millions) 30, 2011 Change
2012
Revenues $318.5 $242.2 32%
Operating $100.8 $80.3 26%
Income
Operating 31.6% 33.2% (160)
Margin bps
Channel Development net revenues were $318.5 million in Q4 FY12, an increase
of 32% over Q4 FY11. The increase was primarily due to sales of Starbucks- and
Tazo-branded K-Cup® portion packs.
Channel Development operating income was $100.8 million in Q4 FY12 compared to
$80.3 million for the same period a year ago. Operating margin declined by 160
basis points to 31.6% in Q4 FY12 compared to 33.2% in the prior-year period.
The margin contraction was mainly due to shifts in product mix and higher
commodity costs, primarily coffee.
Full Year Financial Results
Year Ended Sep 30, 2012
Change in
Comparable Store Sales^(1) Sales Growth Transactions Change in
Ticket
Consolidated 7% 6% 1%
Americas 8% 6% 2%
EMEA 0% 0% 0%
CAP 15% 11% 3%
(1) Includes only Starbucks company-operated stores open 13 months or longer.
Year Ended
($ in millions, except per Sep 30, 2012 Oct 2, 2011 Change
share amounts)
Net New Stores^(1) 1,063 145 918
Revenues $13,299.5 $11,700.4 14%
Operating Income $1,997.4 $1,728.5 16%
Operating Margin 15.0% 14.8% 20 bps
EPS $1.79 $1.62 10%
(1) Net new stores for fiscal 2012 includes the addition of 20 La Boulange
company-operated cafés in fiscal 2012 and the closure of 475 licensed
Seattle's Best Coffee locations in Borders Bookstores in fiscal 2011.
Consolidated net revenues reached a record $13.3 billion in FY12, an increase
of 14% over FY11. The increase was primarily due to a 7% increase in global
comparable stores sales, consisting of a 6% increase in the number of
transactions and a 1% increase in average ticket, 50% revenue growth in
Channel Development, and 20% growth in licensed stores revenue.
Consolidated operating income grew 16% to a record $2.0 billion in FY12,
compared to $1.7 billion in FY11. Operating margin expanded 20 basis points to
a record 15.0% in FY12 compared to 14.8% in FY11. The operating margin
expansion was 50 basis points when excluding the non-routine gain in the prior
year. This improvement was primarily due to increased sales leverage.
Increased commodity costs, mainly coffee, negatively impacted operating income
and operating margin in FY12 by approximately $214 million and 160 basis
points, respectively.
Fiscal 2013 Targets
Starbucks has updated its fiscal 2013 targets as follows:
* The company is further accelerating its store growth target through the
opening of approximately 1,300 net new stores globally, representing 22%
growth over fiscal 2012.
* Maintaining its growth target of approximately 600 net new stores in
the Americas, with the majority of those in the U.S. Of the
approximately 600 stores, approximately half of the additions will be
licensed stores.
* Accelerating growth in China/Asia Pacific to approximately 600 net
new stores, with licensed stores comprising approximately half of the
new additions. Of the approximately 600 stores, slightly more than
half will be in China.
* Maintaining growth of approximately 100 net new stores in EMEA
(Europe, Middle East, Russia and Africa), with licensed stores
comprising more than two thirds of the new stores.
* Starbucks continues to target approximately 10% - 13% revenue growth,
driven by mid-single-digit comparable store sales growth, approximately
1,300 net new store openings, and continued strong growth in the Channel
Development business.
* The company now expects full-year consolidated operating margin
improvement of approximately 100 basis points over FY12 results.
* Reflecting the strength of its global business and the pipeline of
profitable growth initiatives, Starbucks is raising its earnings per share
target to a range of $2.06 to $2.15, representing growth in the range of
15% - 20%, and consistent with its long-term outlook.
* Capital expenditures are now expected to be approximately $1.2 billion for
the full year, reflecting the increase in new store growth and an increase
in production capacity to support recently-announced initiatives.
Company Updates
* Starbucks Coffee Company and its joint venture partner in India, Tata
Global Beverages Limited, opened the first three Starbucks stores in India
in October, located in Mumbai. Starbucks now operates retail stores in 61
countries around the world.
* The company opened its 700^th store in China as it continues to execute
against its significant growth plans in the CAP region.
* The Verismo™ System by Starbucks was introduced and is now available at
more than 6,400 locations including participating Starbucks retail stores
in the US, Canada and select international markets, Verismo.com, and
specialty retailers in the US and Canada.
* Starbucks announced a partnership with Square, Inc. to provide
enhancements to its mobile payment platform.
* In August, Starbucks announced plans to open a high-tech juicery that will
significantly expand the production and distribution capacity of Evolution
Fresh™ juices.
* Evolution Fresh opened new retail locations in downtown Seattle and San
Francisco. The San Francisco opening is the first outside of the Seattle
area.
* Starbucks announced a partnership with Umoe Restaurant Group to open
stores in Scandinavia. The first high street locations are expected to
open in 2013 in Sweden and Norway.
* Starbucks hosted approximately 10,000 store managers in Houston on Oct 3-6
for its 2012 Global Leadership Conference.
* The Board of Directors declared a cash dividend of $0.21 per share, an
increase from $0.17 per share, payable on November 30, 2012, to
shareholders of record as of November 15, 2012.
* The company repurchased approximately 12 million shares of common stock in
fiscal 2012; approximately 12 million shares remain available for purchase
under previous authorizations.
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, Michelle
Gass, president, Starbucks Coffee EMEA and Troy Alstead, cfo. The call will be
broadcast live over the Internet and can be accessed at the company’s web site
address of http://investor.starbucks.com. A replay of the call will be
available via telephone through 9:00 p.m. Pacific Time on Friday, November 2,
2012 by calling 1-855-859-2056, reservation number 99153013. A replay of the
webcast will also be available via the Investor Relations page on
Starbucks.com through approximately 5:00 p.m. Pacific Time on Friday, November
30, 2012 at the following URL: http://investor.starbucks.com.
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 October 2, 2011 for
additional information.
About Starbucks
Since 1971, Starbucks Coffee Company has been committed to ethically sourcing
and roasting the highest quality arabica coffee in the world. 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, earnings per share, revenues, shareholder value, operational
improvements and efficiencies, diversified business model, changes to the
organizational and leadership structures, business momentum, growth and growth
opportunities overall and of specific businesses, markets and channels, sales
leverage, store traffic, average ticket, overall performance of new and
existing stores, loyalty programs, operating margins, profits, capital
expenditures, operating costs, charges, comparable store sales, store openings
and closings, the strength, health and potential of our business and brand,
product innovations, store experience, tax rate and commodity costs and their
impact. 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 October 2, 2011. 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
September October 2, % September October
30, 30, 2,
2012 2011 Change 2012 2011
As a % of total net
revenues
Net revenues:
Company-operated $ 2,665.9 $ 2,470.4 7.9 % 79.2 % 81.5 %
stores
Licensed stores 305.3 266.8 14.4 9.1 8.8
CPG, foodservice 393.0 294.7 33.4 11.7 9.7
and other
Total net 3,364.2 3,031.9 11.0 100.0 100.0
revenues
Cost of sales
including 1,459.2 1,314.5 11.0 43.4 43.4
occupancy costs
Store operating 989.9 922.9 7.3 29.4 30.4
expenses
Other operating 111.9 103.7 7.9 3.3 3.4
expenses
Depreciation and
amortization 141.7 137.1 3.4 4.2 4.5
expenses
General and
administrative 203.8 192.3 6.0 6.1 6.3
expenses
Total operating 2,906.5 2,670.5 8.8 86.4 88.1
expenses
Gain on sale of - 30.2 (100.0 ) - 1.0
properties
Income from 61.9 56.7 9.2 1.8 1.9
equity investees
Operating income 519.6 448.3 15.9 15.4 14.8
Interest income 26.3 65.7 (60.0 ) 0.8 2.2
and other, net
Interest expense (6.4 ) (9.8 ) (34.7 ) (0.2 ) (0.3 )
Earnings before 539.5 504.2 7.0 16.0 16.6
income taxes
Income taxes 180.2 145.9 23.5 5.4 4.8
Net earnings
including 359.3 358.3 0.3 10.7 11.8
noncontrolling
interest
Net earnings
attributable to 0.3 (0.2 ) nm 0.0 (0.0 )
noncontrolling
interest
Net earnings
attributable to $ 359.0 $ 358.5 0.1 % 10.7 % 11.8 %
Starbucks
Net earnings per
common share - $ 0.46 $ 0.47 (2.1 ) %
diluted
Weighted avg.
shares 773.5 768.5
outstanding -
diluted
Cash dividends
declared per $ 0.21 $ 0.17
share
Supplemental
Ratios:
Store operating expenses as a percentage of 37.1 % 37.4 %
company-operated stores revenue
Effective tax rate including noncontrolling 33.4 % 28.9 %
interest
STARBUCKS CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited, in millions, except per share data)
Year Ended Year Ended
September October 2, % September October
30, 30, 2,
2012 2011 Change 2012 2011
As a % of total net
revenues
Net revenues:
Company-operated $ 10,534.5 $ 9,632.4 9.4 % 79.2 % 82.3 %
stores
Licensed stores 1,210.3 1,007.5 20.1 9.1 8.6
CPG, foodservice 1,554.7 1,060.5 46.6 11.7 9.1
and other
Total net 13,299.5 11,700.4 13.7 100.0 100.0
revenues
Cost of sales
including 5,813.3 4,915.5 18.3 43.7 42.0
occupancy costs
Store operating 3,918.1 3,594.9 9.0 29.5 30.7
expenses
Other operating 429.9 392.8 9.4 3.2 3.4
expenses
Depreciation and
amortization 550.3 523.3 5.2 4.1 4.5
expenses
General and
administrative 801.2 749.3 6.9 6.0 6.4
expenses
Total operating 11,512.8 10,175.8 13.1 86.6 87.0
expenses
Gain on sale of - 30.2 (100.0 ) - 0.3
properties
Income from 210.7 173.7 21.3 1.6 1.5
equity investees
Operating income 1,997.4 1,728.5 15.6 15.0 14.8
Interest income 94.4 115.9 (18.6 ) 0.7 1.0
and other, net
Interest expense (32.7 ) (33.3 ) (1.8 ) (0.2 ) (0.3 )
Earnings before 2,059.1 1,811.1 13.7 15.5 15.5
income taxes
Income taxes 674.4 563.1 19.8 5.1 4.8
Net earnings
including 1,384.7 1,248.0 11.0 10.4 10.7
noncontrolling
interest
Net earnings
attributable to 0.9 2.3 (60.9 ) 0.0 0.0
noncontrolling
interest
Net earnings
attributable to $ 1,383.8 $ 1,245.7 11.1 % 10.4 % 10.6 %
Starbucks
Net earnings per
common share - $ 1.79 $ 1.62 10.5 %
diluted
Weighted avg.
shares 773.0 769.7
outstanding -
diluted
Cash dividends
declared per $ 0.72 $ 0.56
share
Supplemental
Ratios:
Store operating expenses as a percentage of 37.2 % 37.3 %
company-operated stores revenue
Effective tax rate including noncontrolling 32.8 % 31.1 %
interest
Segment Results
The tables below present reportable segment results net of intersegment
eliminations (in millions):
Americas September October % September October
30, 2, 30, 2,
2012 2011 Change 2012 2011
As a % of Americas
Quarter Ended total net revenues
Net revenues:
Company-operated $ 2,294.2 $ 2,112.2 8.6 % 91.3 % 92.0 %
stores
Licensed stores 202.2 178.6 13.2 8.1 7.8
Foodservice and 15.3 5.6 173.2 0.6 0.2
other
Total net 2,511.7 2,296.4 9.4 100.0 100.0
revenues
Cost of sales
including 972.0 910.4 6.8 38.7 39.6
occupancy costs
Store operating 857.6 805.5 6.5 34.1 35.1
expenses
Other operating 24.4 20.2 20.8 1.0 0.9
expenses
Depreciation and
amortization 100.8 98.4 2.4 4.0 4.3
expenses
General and
administrative 20.6 17.7 16.4 0.8 0.8
expenses
Total operating 1,975.4 1,852.2 6.7 78.6 80.7
expenses
Income from - - - - -
equity investees
Operating income $ 536.3 $ 444.2 20.7 % 21.4 % 19.3 %
Supplemental
Ratios:
Store operating expenses as a percentage of 37.4 % 38.1 %
company-operated stores revenue
Year Ended
Net revenues:
Company-operated $ 9,077.0 $ 8,365.5 8.5 % 91.4 % 92.3 %
stores
Licensed stores 825.8 676.7 22.0 8.3 7.5
Foodservice and 33.2 22.8 45.6 0.3 0.3
other
Total net 9,936.0 9,065.0 9.6 100.0 100.0
revenues
Cost of sales
including 3,885.5 3,512.7 10.6 39.1 38.8
occupancy costs
Store operating 3,427.8 3,184.2 7.7 34.5 35.1
expenses
Other operating 83.8 75.8 10.6 0.8 0.8
expenses
Depreciation and
amortization 392.3 390.8 0.4 3.9 4.3
expenses
General and
administrative 74.3 60.8 22.2 0.7 0.7
expenses
Total operating 7,863.7 7,224.3 8.9 79.1 79.7
expenses
Income from 2.1 1.6 31.3 0.0 0.0
equity investees
Operating income $ 2,074.4 $ 1,842.3 12.6 % 20.9 % 20.3 %
Supplemental
Ratios:
Store operating expenses as a percentage of 37.8 % 38.1 %
company-operated stores revenue
EMEA September October % September October
30, 2, 30, 2,
2012 2011 Change 2012 2011
As a % of EMEA
Quarter Ended total net revenues
Net revenues:
Company-operated $ 233.2 $ 250.4 (6.9 ) % 82.2 % 86.3 %
stores
Licensed stores 40.4 31.3 29.1 14.2 10.8
Foodservice 10.1 8.4 20.2 3.6 2.9
Total net 283.7 290.1 (2.2 ) 100.0 100.0
revenues
Cost of sales
including 153.2 152.9 0.2 54.0 52.7
occupancy costs
Store operating 97.1 91.0 6.7 34.2 31.4
expenses
Other operating 7.6 11.6 (34.5 ) 2.7 4.0
expenses
Depreciation and
amortization 14.2 15.8 (10.1 ) 5.0 5.4
expenses
General and
administrative 18.1 16.3 11.0 6.4 5.6
expenses
Total operating 290.2 287.6 0.9 102.3 99.1
expenses
Income from - - - - -
equity investees
Operating income $ (6.5 ) $ 2.5 nm % (2.3 ) % 0.9 %
/ (loss)
Supplemental
Ratios:
Store operating expenses as a percentage of 41.6 % 36.3 %
company-operated stores revenue
Year Ended
Net revenues:
Company-operated $ 968.3 $ 905.5 6.9 % 84.8 % 86.5 %
stores
Licensed stores 139.5 112.2 24.3 12.2 10.7
Foodservice 33.5 29.1 15.1 2.9 2.8
Total net 1,141.3 1,046.8 9.0 100.0 100.0
revenues
Cost of sales
including 597.3 530.3 12.6 52.3 50.7
occupancy costs
Store operating 371.1 327.3 13.4 32.5 31.3
expenses
Other operating 33.6 36.5 (7.9 ) 2.9 3.5
expenses
Depreciation and
amortization 57.1 53.4 6.9 5.0 5.1
expenses
General and
administrative 72.1 65.0 10.9 6.3 6.2
expenses
Total operating 1,131.2 1,012.5 11.7 99.1 96.7
expenses
Income from 0.3 6.0 (95.0 ) 0.0 0.6
equity investees
Operating income $ 10.4 $ 40.3 (74.2 ) % 0.9 % 3.8 %
Supplemental
Ratios:
Store operating expenses as a percentage of 38.3 % 36.1 %
company-operated stores revenue
China/Asia September October % September October
Pacific (CAP) 30, 2, 30, 2,
2012 2011 Change 2012 2011
As a % of CAP
Quarter Ended total net revenues
Net revenues:
Company-operated $ 138.5 $ 107.8 28.5 % 69.9 % 66.9 %
stores
Licensed stores 59.5 53.4 11.4 30.1 33.1
Total net 198.0 161.2 22.8 100.0 100.0
revenues
Cost of sales
including 100.1 83.7 19.6 50.6 51.9
occupancy costs
Store operating 35.2 26.4 33.3 17.8 16.4
expenses
Other operating 14.6 9.5 53.7 7.4 5.9
expenses
Depreciation and
amortization 6.7 4.9 36.7 3.4 3.0
expenses
General and
administrative 8.0 8.8 (9.1 ) 4.0 5.5
expenses
Total operating 164.6 133.3 23.5 83.1 82.7
expenses
Income from 31.8 30.6 3.9 16.1 19.0
equity investees
Operating income $ 65.2 $ 58.5 11.5 % 32.9 % 36.3 %
Supplemental
Ratios:
Store operating expenses as a percentage of 25.4 % 24.5 %
company-operated stores revenue
Year Ended
Net revenues:
Company-operated $ 489.2 $ 361.4 35.4 % 67.8 % 65.4 %
stores
Licensed stores 232.2 190.9 21.6 32.2 34.6
Total net 721.4 552.3 30.6 100.0 100.0
revenues
Cost of sales
including 362.8 282.0 28.7 50.3 51.1
occupancy costs
Store operating 119.2 83.4 42.9 16.5 15.1
expenses
Other operating 47.0 35.7 31.7 6.5 6.5
expenses
Depreciation and
amortization 23.2 18.1 28.2 3.2 3.3
expenses
General and
administrative 38.1 32.9 15.8 5.3 6.0
expenses
Total operating 590.3 452.1 30.6 81.8 81.9
expenses
Income from 122.4 92.9 31.8 17.0 16.8
equity investees
Operating income $ 253.5 $ 193.1 31.3 % 35.1 % 35.0 %
Supplemental
Ratios:
Store operating expenses as a percentage of 24.4 % 23.1 %
company-operated stores revenue
Channel September October % September October
Development 30, 2, 30, 2,
2012 2011 Change 2012 2011
As a % of Channel
Development
Quarter Ended total net revenues
Net revenues:
CPG $ 235.0 $ 162.2 44.9 % 73.8 % 67.0 %
Foodservice 83.5 80.0 4.4 26.2 33.0
Total net 318.5 242.2 31.5 100.0 100.0
revenues
Cost of sales 201.2 139.6 44.1 63.2 57.6
Other
operating 43.8 47.0 (6.8 ) 13.8 19.4
expenses
Depreciation
and 0.3 0.5 (40.0 ) 0.1 0.2
amortization
expenses
General and
administrative 2.2 1.9 15.8 0.7 0.8
expenses
Total
operating 247.5 189.0 31.0 77.7 78.0
expenses
Income from
equity 29.8 27.1 10.0 9.4 11.2
investees
Operating $ 100.8 $ 80.3 25.5 % 31.6 % 33.2 %
income
Year Ended
Net revenues:
CPG $ 952.1 $ 553.2 72.1 % 73.7 % 64.3 %
Foodservice 340.1 307.3 10.7 26.3 35.7
Total net 1,292.2 860.5 50.2 100.0 100.0
revenues
Cost of sales 827.6 487.5 69.8 64.0 56.7
Other
operating 191.1 151.8 25.9 14.8 17.6
expenses
Depreciation
and 1.3 2.4 (45.8 ) 0.1 0.3
amortization
expenses
General and
administrative 8.9 6.6 34.8 0.7 0.8
expenses
Total
operating 1,028.9 648.3 58.7 79.6 75.3
expenses
Income from
equity 85.2 75.6 12.7 6.6 8.8
investees
Operating $ 348.5 $ 287.8 21.1 % 27.0 % 33.4 %
income
Other September 30, October 2, %
2012 2011 Change
Quarter Ended
Net revenues:
Licensed stores $ 3.2 $ 3.5 (8.6 ) %
CPG, foodservice and other 49.1 38.5 27.5
Total net revenues 52.3 42.0 24.5
Cost of sales 32.7 27.9 17.2
Other operating expenses 21.5 15.4 39.6
Depreciation and 19.7 17.5 12.6
amortization expenses
General and administrative 154.9 147.6 4.9
expenses
Total operating expenses 228.8 208.4 9.8
Gain on sale of properties - 30.2 (100.0 )
Income from equity 0.3 (1.0 ) nm
investees
Operating loss $ (176.2 ) $ (137.2 ) 28.4 %
Year Ended
Net revenues:
Licensed stores $ 12.8 $ 27.7 (53.8 ) %
CPG, foodservice and other 195.8 148.1 32.2
Total net revenues 208.6 175.8 18.7
Cost of sales 140.1 103.0 36.0
Other operating expenses 74.4 93.0 (20.0 )
Depreciation and 76.4 58.6 30.4
amortization expenses
General and administrative 607.8 584.0 4.1
expenses
Total operating expenses 898.7 838.6 7.2
Gain on sale of properties - 30.2 (100.0 )
Income from equity 0.7 (2.4 ) nm
investees
Operating loss $ (689.4 ) $ (635.0 ) 8.6 %
STARBUCKS CORPORATION
CONSOLIDATED BALANCE SHEETS
(in millions, except per share data)
(unaudited)
September 30, October 2,
2012 2011
ASSETS
Current assets:
Cash and cash equivalents $ 1,188.6 $ 1,148.1
Short-term investments 848.4 902.6
Accounts receivable, net 485.9 386.5
Inventories 1,241.5 965.8
Prepaid expenses and other current assets 196.5 161.5
Deferred income taxes, net 238.7 230.4
Total current assets 4,199.6 3,794.9
Long-term investments – available-for-sale 116.0 107.0
securities
Equity and cost investments 459.9 372.3
Property, plant and equipment, net 2,658.9 2,355.0
Other assets 385.7 409.6
Goodwill 399.1 321.6
TOTAL ASSETS $ 8,219.2 $ 7,360.4
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 398.1 $ 540.0
Accrued liabilities 1,133.8 940.9
Insurance reserves 167.7 145.6
Deferred revenue 510.2 449.3
Total current liabilities 2,209.8 2,075.8
Long-term debt 549.6 549.5
Other long-term liabilities 345.3 347.8
Total liabilities 3,104.7 2,973.1
Shareholders’ equity:
Common stock ($0.001 par value) -
authorized, 1,200 shares; issued and
outstanding, 749.3 and 744.8 shares, 0.7 0.7
respectively, (includes 3.4 common stock
units in both periods)
Additional paid-in-capital 39.4 40.5
Retained earnings 5,046.2 4,297.4
Accumulated other comprehensive income 22.7 46.3
Total shareholders’ equity 5,109.0 4,384.9
Noncontrolling interests 5.5 2.4
Total equity 5,114.5 4,387.3
TOTAL LIABILITIES AND EQUITY $ 8,219.2 $ 7,360.4
STARBUCKS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited and in millions)
Year Ended Year Ended
September 30, October 2,
2012 2011
OPERATING ACTIVITIES:
Net earnings including noncontrolling $ 1,384.7 $ 1,248.0
interests
Adjustments to reconcile net earnings to
net cash provided by operating
activities:
Depreciation and amortization 580.6 550.0
Gain on sale of properties - (30.2 )
Deferred income taxes, net 61.1 106.2
Income earned from equity method (49.3 ) (32.9 )
investees, net of distributions
Gain resulting from acquisition of joint - (55.2 )
ventures
Stock-based compensation 153.6 145.2
Other 23.6 33.3
Cash provided/(used) by changes in
operating assets and liabilities:
Accounts receivable (90.3 ) (88.7 )
Inventories (273.3 ) (422.3 )
Accounts payable (136.0 ) 227.5
Accrued liabilities and insurance 23.7 (81.8 )
reserves
Deferred revenue 60.8 35.8
Prepaid expenses, other current assets (19.7 ) (22.5 )
and other assets
Net cash provided by operating activities 1,719.5 1,612.4
INVESTING ACTIVITIES:
Purchase of investments (1,748.6 ) (966.0 )
Maturities and calls of investments 1,796.4 430.0
Acquisitions, net of cash acquired (129.1 ) (55.8 )
Additions to property, plant and (856.2 ) (531.9 )
equipment
Cash proceeds from sale of property, 5.3 117.4
plant and equipment
Other (41.8 ) (13.2 )
Net cash used by investing activities (974.0 ) (1,019.5 )
FINANCING ACTIVITIES:
Proceeds from short-term borrowings - 30.8
Purchase of noncontrolling interest - (27.5 )
Proceeds from issuance of common stock 236.6 250.4
Excess tax benefit from exercise of stock 169.8 103.9
options
Cash dividends paid (513.0 ) (389.5 )
Repurchase of common stock (549.1 ) (555.9 )
Minimum tax withholdings on share-based (58.5 ) (15.0 )
awards
Other (0.5 ) (5.2 )
Net cash used by financing activities (714.7 ) (608.0 )
Effect of exchange rate changes on cash 9.7 (0.8 )
and cash equivalents
Net increase/(decrease) in cash and cash 40.5 (15.9 )
equivalents
CASH AND CASH EQUIVALENTS:
Beginning of period 1,148.1 1,164.0
End of the period $ 1,188.6 $ 1,148.1
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the period for:
Interest, net of capitalized interest $ 34.4 $ 34.4
Income taxes $ 416.9 $ 350.1
Supplemental Information
The following supplemental information is provided for historical and
comparative purposes. The U.S. data is included as a transitional tool to
provide insight into the U.S. business, as it was previously a reportable
segment and is now the largest component of the Americas segment:
Fourth Quarter 2012 U.S. Supplemental Data
Quarter Ended
($ in millions) Sep 30, Oct 2, Change
2012 2011
Comparable Store 7% 10%
Sales Growth
Change in 5% 7%
Transactions
Change in Ticket 2% 3%
Revenues $2,204.7 $2,029.8 9%
Operating Income $497.3 $411.6 21%
Operating Margin 22.6% 20.3% 230 bps
Fiscal Fourth Quarter 2012 Store Data
The company’s store data for the periods presented are as follows:
Net stores opened/(closed) during
the period
Quarter Ended Year Ended Stores open as of
Sep Oct Sep Oct Sep Oct 2,
30, 2, 30, 2, 30,
2012 2011 2012 2011 2012 2011
Americas:
Company-operated 151 39 234 43 7,857 7,623
stores^(1)
Licensed 99 (163) 270 (268) 5,046 4,776
stores^(2)
250 (124) 504 (225) 12,903 12,399
EMEA:
Company-operated 3 5 10 25 882 872
stores^(3)
Licensed 30 23 101 79 987 886
stores^(3)
33 28 111 104 1,869 1,758
CAP:
Company-operated 59 21 154 73 666 512
stores
Licensed stores 73 60 294 193 2,628 2,334
132 81 448 266 3,294 2,846
Total 415 (15) 1,063 145 18,066 17,003
^(1) Includes the addition of 20 La Boulange company-operated cafés in the fourth
quarter of fiscal 2012.
^(2) Includes the closure of 248 and 475 licensed Seattle's Best Coffee locations
in Borders Bookstores in the fourth quarter of fiscal 2011 and the full year ending
October 2, 2011, respectively.
^(3) EMEA store data has been adjusted for the acquisition of store locations in
Austria and Switzerland in the fourth quarter of fiscal 2011 by reclassifying
historical information from licensed stores to company-operated stores, and the
transfer of certain company-operated stores to licensees in the fourth quarter of
fiscal 2012.
Non-GAAP Disclosure
In addition to the GAAP results provided in this release, the company provides
non-GAAP operating margin and non-GAAP earnings per share (non-GAAP EPS) for
fiscal 2011. 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 operating margin
and non-GAAP earnings per share (non-GAAP EPS) are operating margin and
diluted net earnings per share, respectively.
The fiscal 2011 non-GAAP financial measures provided in this release exclude
non-routine gains from the sale of properties and the acquisition of the
company’s joint venture operations in Switzerland and Austria in fiscal 2011.
The company’s management believes that providing these non-GAAP financial
measures better enables investors to understand and evaluate the company’s
historical and prospective operating performance. More specifically, for
historical non-GAAP financial measures, management excludes the non-routine
gains in fiscal 2011 because it believes that the impact of non-routine gains
do not reflect expected future expenses 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
October 2, October 2,
2011 2011
Consolidated
Operating margin, as reported (GAAP) 14.8 % 14.8 %
Gain on sale of properties (1.0 ) (0.3 )
Non-GAAP operating margin 13.8 % 14.5 %
Diluted EPS, as reported (GAAP) $ 0.47 $ 1.62
Gain on sale of properties (0.02 ) (0.02 )
Gain from Switzerland and Austria (0.07 ) (0.07 )
transaction
Non-GAAP Diluted EPS $ 0.37 $ 1.52
© 2012 Starbucks Coffee Company. All rights reserved.
Contact:
Starbucks Coffee Company
Investor Relations:
JoAnn DeGrande, 206-318-7118
investorrelations@starbucks.com
or
Media:
Zack Hutson, 206-318-7100
press@starbucks.com
The story has been truncated,
[TRUNCATED]
Sponsored Links
Advertisement
Advertisements
Sponsored Links
Advertisement
Rate this Page