Q4 Consolidated Net Revenues Up 11% to a Record
$9.4 Billion
Q4 Comparable Store Sales Up 8% Globally; Up 8%
in North America; Up 5% in International
Q4 GAAP EPS $1.06; Non-GAAP EPS $1.06 Driven by
Strong Global Performance; Reinvention Execution
International Surpasses 20,000 Stores,
Propelling Global Count to Record 38,038
Q4 Active U.S. Starbucks® Rewards Membership
Reaches 32.6 Million, Up 14% Over Prior Year
Starbucks Corporation (Nasdaq: SBUX) today reported financial
results for its 13-week fiscal fourth quarter ended October 1,
2023. GAAP results in fiscal 2023 and fiscal 2022 include items
that are excluded from non-GAAP results. Please refer to the
reconciliation of GAAP measures to non-GAAP measures at the end of
this release for more information.
Q4 Fiscal 2023
Highlights
- Global comparable store sales increased 8%, driven by a 4%
increase in average ticket and 3% increase in comparable
transactions
- North America and U.S. comparable store sales increased 8%,
driven by a 6% increase in average ticket and 2% increase in
comparable transactions
- International comparable store sales increased 5%, driven by a
6% increase in comparable transactions and 1% decline in average
ticket; China comparable store sales increased 5%, driven by an 8%
increase in comparable transactions and a 3% decline in average
ticket
- The company opened 816 net new stores in Q4, ending the period
with 38,038 stores: 52% company-operated and 48% licensed
- At the end of Q4, stores in the U.S. and China comprised 61% of
the company’s global portfolio, with 16,352 and 6,806 stores in the
U.S. and China, respectively
- Consolidated net revenues up 11%, to a record $9.4 billion, or
12%, excluding a 1% unfavorable impact from foreign currency
translation
- GAAP operating margin of 18.2% increased from 14.2% in the
prior year, primarily driven by in-store operational efficiencies,
sales leverage and pricing. This expansion was partially offset by
previously committed investments in store partner wages and higher
general and administrative costs related to our Reinvention Plan.
- Non-GAAP operating margin of 18.2% increased from 15.1% in the
prior year
- GAAP earnings per share of $1.06 grew 39% over prior year
- Non-GAAP earnings per share of $1.06 grew 31% over prior
year
- Starbucks Rewards loyalty program 90-day active members in the
U.S. increased to 32.6 million, up 14% year-over-year
Full Year Fiscal 2023
Highlights
- Global comparable store sales increased 8%, driven by a 5%
increase in average ticket and 3% increase in comparable
transactions
- North America and U.S. comparable store sales increased 9%,
driven by a 6% increase in average ticket and 3% increase in
comparable transactions
- International comparable store sales increased 5%, driven by a
5% increase in comparable transactions; China comparable store
sales increased 2%, driven by a 4% increase in comparable
transactions and 2% decline in average ticket
- Consolidated net revenues up 12%, to a record $36.0 billion, or
14%, excluding a 2% unfavorable impact from foreign currency
translation
- GAAP operating margin of 16.3% increased from 14.3% in the
prior year, primarily driven by pricing, sales leverage and
in-store operational efficiencies. This expansion was partially
offset by previously committed investments in store partner wages
and higher general and administrative costs related to our
Reinvention Plan.
- Non-GAAP operating margin of 16.1% increased from 15.1% in the
prior year
- GAAP earnings per share of $3.58 grew 27% over prior year
- Non-GAAP earnings per share of $3.54 grew 20% over prior
year
“We finished our fourth quarter and full fiscal year strong,
delivering on the higher end of our full-year guidance. Our
Reinvention is moving ahead of schedule, fueling revenue growth,
efficiency and margin expansion,” commented Laxman Narasimhan,
chief executive officer. “Notably, we continue to see the positive
impact of our Reinvention on our partner and customer experiences,
proof points that we can continue to create, grow and strengthen
our business while creating value for all. As we enter the current
year, in the face of macro uncertainty, we remain confident in the
momentum throughout our business and headroom globally. We expect
sustained momentum throughout the company for years to come,”
Narasimhan added.
“Our strong full fiscal year 2023 performance demonstrated our
durable long-term growth and Reinvention plan execution,” commented
Rachel Ruggeri, chief financial officer. “We are proud that our
full fiscal year 2024 guidance will be grounded on a balance of
both revenue growth and margin expansion,” Ruggeri added.
Q4 North America Segment
Results
Quarter Ended
Change (%)
($ in millions)
Oct 1, 2023
Oct 2, 2022
Change in Comparable Store Sales (1)
8%
11%
Change in Transactions
2%
1%
Change in Ticket
6%
10%
Store Count
17,810
17,295
3%
Revenues
$6,900.0
$6,134.4
12%
Operating Income
$1,601.4
$1,141.8
40%
Operating Margin
23.2%
18.6%
460 bps
(1) Includes only Starbucks®
company-operated stores open 13 months or longer. Comparable store
sales exclude the effects of fluctuations in foreign currency
exchange rates and Siren Retail stores. Stores that are temporarily
closed or operating at reduced hours due to the COVID-19 pandemic
remain in comparable store sales while stores identified for
permanent closure have been removed.
Net revenues for the North America segment grew 12% over Q4 FY22
to $6.9 billion in Q4 FY23, primarily driven by an 8% increase in
comparable store sales, driven by a 6% increase in average ticket
and a 2% increase in comparable transactions, net new
company-operated store growth of 4% over the past 12 months, as
well as strength in our licensed store sales.
Operating income increased to $1.6 billion in Q4 FY23 compared
to $1.1 billion in Q4 FY22. Operating margin of 23.2% expanded from
18.6% in the prior year, primarily driven by in-store operational
efficiencies, sales leverage and pricing. This expansion was
partially offset by previously committed investments in store
partner wages and benefits.
Q4 International Segment
Results
Quarter Ended
Change (%)
($ in millions)
Oct 1, 2023
Oct 2, 2022
Change in Comparable Store Sales (1)
5%
(5)%
Change in Transactions
6%
(5)%
Change in Ticket
(1)%
(1)%
Store Count
20,228
18,416
10%
Revenues
$1,979.9
$1,777.0
11%
Operating Income
$301.3
$217.6
38%
Operating Margin
15.2%
12.2%
300 bps
(1) Includes only Starbucks®
company-operated stores open 13 months or longer. Comparable store
sales exclude the effects of fluctuations in foreign currency
exchange rates and Siren Retail stores. Stores that are temporarily
closed or operating at reduced hours due to the COVID-19 pandemic
remain in comparable store sales while stores identified for
permanent closure have been removed.
Net revenues for the International segment grew 11% over Q4 FY22
to $2.0 billion in Q4 FY23, primarily driven by net new
company-operated store growth of 12% over the past 12 months as
well as growth in our licensed store revenue including higher
product sales and royalty revenues. Also contributing to the
increase was a 5% increase in comparable store sales, driven by a
6% increase in comparable transactions and a 1% decline in average
ticket. These increases were partially offset by an approximately
3% unfavorable impact from foreign currency translation.
Operating income increased to $301.3 million in Q4 FY23 compared
to $217.6 million in Q4 FY22. Operating margin of 15.2% expanded
from 12.2% in the prior year, primarily driven by lapping prior
year amortization expenses and sales leverage. This expansion was
partially offset by digital investments.
Q4 Channel Development Segment
Results
Quarter Ended
Change (%)
($ in millions)
Oct 1, 2023
Oct 2, 2022
Revenues
$486.1
$483.7
0%
Operating Income
$271.2
$244.6
11%
Operating Margin
55.8%
50.6%
520 bps
Net revenues for the Channel Development segment of $486.1
million in Q4 FY23 were relatively flat to Q4 FY22, driven by an
increase in revenue in the Global Coffee Alliance partially offset
by a decrease in global ready-to-drink revenue.
Operating income increased to $271.2 million in Q4 FY23 compared
to $244.6 million in Q4 FY22. Operating margin of 55.8% expanded
from 50.6% in the prior year, primarily driven by growth in our
North American Coffee Partnership joint venture income.
Fiscal 2024 Financial
Targets
The company will discuss fiscal year 2024 financial targets
during its Q4 FY23 and full year earnings conference call starting
today at 7:00 a.m. Eastern Time. The company will also host a
Reinvention update and holiday launch later today at 4:00 p.m.
Eastern Time. These items can be accessed on the company's Investor
Relations website during and after the call and event. The company
uses its website as a tool to disclose important information about
the company and comply with its disclosure obligations under
Regulation Fair Disclosure.
Company Updates
- In September, the company celebrated five years of the Global
Coffee Alliance with Nestlé. The alliance was established in 2018,
to combine the coffee expertise and strength of the Starbucks brand
with Nestlé’s proprietary coffee platforms, manufacturing and
market reach.
- In September, the company celebrated opening its 20,000th
International store in the United Kingdom, marking its 25th
anniversary in the market.
- In September, the company announced Howard Schultz, the
company’s modern-day founder and chairman emeritus, would step down
from the company's Board of Directors, and Wei Zhang, former Senior
Advisor and President of Alibaba Pictures Group, would join the
company's Board of Directors.
- In September, the company announced Molly Liu as executive vice
president and co-chief executive officer of Starbucks China.
- In September, the company announced the opening of its China
Coffee Innovation Park, holding the distinction of being designed
to be the company's most energy efficient and sustainable coffee
manufacturing and distribution center in the world.
- In October, the company celebrated the 20th year of the iconic
Pumpkin Spice Latte, which is the company's most popular seasonal
beverage and is enjoyed by customers worldwide every Fall.
- In Q4 FY23, the company repurchased 3.1 million shares of
common stock valued at $301.6 million, bringing total shares
repurchased this fiscal year to $1.0 billion; approximately 42.6
million shares remain available for purchase under the current
authorization.
- The board of directors declared a cash dividend of $0.57 per
share, payable on November 24, 2023, to shareholders of record on
November 10, 2023. The company had 54 consecutive quarters of
dividend payouts with CAGR of approximately 20%.
Conference Call
Starbucks will hold a conference call today at 7:00 a.m. Eastern
Time, which will be hosted by Laxman Narasimhan, ceo, and Rachel
Ruggeri, cfo. The call will be webcast and can be accessed at
http://investor.starbucks.com. A replay of the webcast will be
available until end of day Friday, December 1, 2023.
About Starbucks
Since 1971, Starbucks Coffee Company has been committed to
ethically sourcing and roasting high-quality arabica coffee. Today,
with more than 38,000 stores worldwide, 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 stories.starbucks.com or
www.starbucks.com.
Forward-Looking
Statements
Certain statements contained herein and in our investor
conference call related to these results are “forward-looking”
statements within the meaning of applicable securities laws and
regulations. Generally, these statements can be identified by the
use of words such as “aim,” “anticipate,” “believe,” “continue,”
“could,” “estimate,” “expect,” “feel,” “forecast,” “intend,” “may,”
“outlook,” “plan,” “potential,” “predict,” “project,” “seek,”
“should,” “will,” “would,” and similar expressions intended to
identify forward-looking statements, although not all
forward-looking statements contain these identifying words. By
their nature, forward-looking statements involve risks,
uncertainties, and other factors (many beyond our control) that
could cause our actual results to differ materially from our
historical experience or from our current expectations or
projections. Our forward-looking statements, and the risks and
uncertainties related thereto, include, but are not limited to,
those described under the “Risk Factors” and “Management's
Discussion and Analysis of Financial Condition and Results of
Operations” sections of the company’s most recently filed periodic
reports on Form 10-K and Form 10-Q and subsequent filings with the
SEC, as well as:
- our ability to preserve, grow and leverage our brands;
- the acceptance of the company’s products and changes in
consumer preferences, consumption, or spending behavior and our
ability to anticipate or react to them; shifts in demographic or
health and wellness trends; or unfavorable consumer reaction to new
products, platforms, reformulations, or other innovations;
- the costs associated with, and the successful execution and
effects of, our existing and any future business opportunities,
expansions, initiatives, strategies, investments and plans,
including our Reinvention Plan;
- the impacts of partner investments and changes in the
availability and cost of labor including any union organizing
efforts and our responses to such efforts;
- the ability of our business partners, suppliers and third-party
providers to fulfill their responsibilities and commitments;
- higher costs, lower quality, or unavailability of coffee,
dairy, energy, water, raw materials, or product ingredients;
- the impact of significant increases in logistics costs;
- unfavorable global or regional economic conditions and related
economic slowdowns or recessions, low consumer confidence, high
unemployment, weak credit or capital markets, budget deficits,
burdensome government debt, austerity measures, higher interest
rates, higher taxes, political instability, higher inflation, or
deflation;
- inherent risks of operating a global business including
geopolitical instability;
- failure to attract or retain key executive or partner talent or
successfully transition executives;
- the potential negative effects of incidents involving food or
beverage-borne illnesses, tampering, adulteration, contamination or
mislabeling;
- negative publicity related to our company, products, brands,
marketing, executive leadership, partners, board of directors,
founder, operations, business performance, or prospects;
- potential negative effects of a material breach, failure, or
corruption of our information technology systems or those of our
direct and indirect business partners, suppliers or third-party
providers, or failure to comply with personal data protection
laws;
- our environmental, social and governance (“ESG”) efforts and
any reaction related thereto such as the rise in opposition to ESG
and inclusion and diversity efforts;
- risks associated with acquisitions, dispositions, business
partnerships, or investments – such as acquisition integration,
termination difficulties or costs or impairment in recorded
value;
- the impact of foreign currency translation, particularly a
stronger U.S. dollar;
- the impact of substantial competition from new entrants,
consolidations by competitors, and other competitive activities,
such as pricing actions (including price reductions, promotions,
discounting, couponing, or free goods), marketing, category
expansion, product introductions, or entry or expansion in our
geographic markets;
- the impact of changes in U.S. tax law and related guidance and
regulations that may be implemented, including on tax rates and the
Inflation Reduction Act of 2022;
- the impact of health epidemics, pandemics or other public
health events on our business and financial results, and the risk
of negative economic impacts and related regulatory measures or
voluntary actions that may be put in place, including restrictions
on business operations or social distancing requirements, and the
duration and efficacy of such restrictions;
- failure to comply with anti-corruption laws, trade sanctions
and restrictions or similar laws or regulations; and
- the impact of significant legal disputes and proceedings, or
government investigations.
A forward-looking statement is neither a prediction nor a
guarantee of future events or circumstances, and those future
events or circumstances may not occur. You should not place undue
reliance on the forward-looking statements, which speak only as of
the date of this report. We are under no obligation to update or
alter any forward-looking statements, whether as a result of new
information, future events or otherwise.
Key Metrics
The company's financial results and long-term growth model will
continue to be driven by new store openings, comparable store sales
growth and operating margin management. We believe these key
operating metrics are useful to investors because management uses
these metrics to assess the growth of our business and the
effectiveness of our marketing and operational strategies.
STARBUCKS CORPORATION
CONSOLIDATED STATEMENTS OF
EARNINGS
(unaudited, in millions, except
per share data)
Quarter Ended
Quarter Ended
Oct 1, 2023
Oct 2, 2022
% Change
Oct 1, 2023
Oct 2, 2022
As a % of total net
revenues
Net revenues:
Company-operated stores
$
7,679.9
$
6,901.4
11.3
%
81.9
%
82.0
%
Licensed stores
1,187.5
998.4
18.9
12.7
11.9
Other
506.2
514.4
(1.6
)
5.4
6.1
Total net revenues
9,373.6
8,414.2
11.4
100.0
100.0
Product and distribution costs
2,933.1
2,711.0
8.2
31.3
32.2
Store operating expenses
3,721.3
3,544.7
5.0
39.7
42.1
Other operating expenses
145.2
123.1
18.0
1.5
1.5
Depreciation and amortization expenses
351.4
357.4
(1.7
)
3.7
4.2
General and administrative expenses
635.8
538.0
18.2
6.8
6.4
Restructuring and impairments
—
35.1
nm
—
0.4
Total operating expenses
7,786.8
7,309.3
6.5
83.1
86.9
Income from equity investees
119.4
90.6
31.8
1.3
1.1
Operating income
1,706.2
1,195.5
42.7
18.2
14.2
Interest income and other, net
30.1
31.0
(2.9
)
0.3
0.4
Interest expense
(143.2
)
(125.3
)
14.3
(1.5
)
(1.5
)
Earnings before income taxes
1,593.1
1,101.2
44.7
17.0
13.1
Income tax expense
373.8
222.7
67.8
4.0
2.6
Net earnings including noncontrolling
interests
1,219.3
878.5
38.8
13.0
10.4
Net earnings attributable to
noncontrolling interests
0.0
0.2
nm
0.0
0.0
Net earnings attributable to
Starbucks
$
1,219.3
$
878.3
38.8
13.0
%
10.4
%
Net earnings per common share -
diluted
$
1.06
$
0.76
39.5
%
Weighted avg. shares outstanding -
diluted
1,149.4
1,152.5
Cash dividends declared per share
$
0.57
$
0.53
Supplemental Ratios:
Store operating expenses as a % of
company-operated store revenues
48.5
%
51.4
%
Effective tax rate including
noncontrolling interests
23.5
%
20.2
%
Year Ended
Year Ended
Oct 1, 2023
Oct 2, 2022
% Change
Oct 1, 2023
Oct 2, 2022
As a % of total net
revenues
Net revenues:
Company-operated stores
$
29,462.3
$
26,576.1
10.9
%
81.9
%
82.4
%
Licensed stores
4,512.7
3,655.5
23.4
12.5
11.3
Other
2,000.6
2,018.7
(0.9
)
5.6
6.3
Total net revenues
35,975.6
32,250.3
11.6
100.0
100.0
Product and distribution costs
11,409.1
10,317.4
10.6
31.7
32.0
Store operating expenses
14,720.3
13,561.8
8.5
40.9
42.1
Other operating expenses
539.4
461.5
16.9
1.5
1.4
Depreciation and amortization expenses
1,362.6
1,447.9
(5.9
)
3.8
4.5
General and administrative expenses
2,441.3
2,032.0
20.1
6.8
6.3
Restructuring and impairments
21.8
46.0
(52.6
)
0.1
0.1
Total operating expenses
30,494.5
27,866.6
9.4
84.8
86.4
Income from equity investees
298.4
234.1
27.5
0.8
0.7
Gain from sale of assets
91.3
—
nm
0.3
—
Operating income
5,870.8
4,617.8
27.1
16.3
14.3
Interest income and other, net
81.2
97.0
(16.3
)
0.2
0.3
Interest expense
(550.1
)
(482.9
)
13.9
(1.5
)
(1.5
)
Earnings before income taxes
5,401.9
4,231.9
27.6
15.0
13.1
Income tax expense
1,277.2
948.5
34.7
3.6
2.9
Net earnings including noncontrolling
interests
4,124.7
3,283.4
25.6
11.5
10.2
Net earnings attributable to
noncontrolling interests
0.2
1.8
(88.9
)
0.0
0.0
Net earnings attributable to
Starbucks
$
4,124.5
$
3,281.6
25.7
11.5
%
10.2
%
Net earnings per common share -
diluted
$
3.58
$
2.83
26.5
%
Weighted avg. shares outstanding -
diluted
1,151.3
1,158.5
Cash dividends declared per share
$
2.16
$
2.00
Supplemental Ratios:
Store operating expenses as a % of
company-operated store revenues
50.0
%
51.0
%
Effective tax rate including
noncontrolling interests
23.6
%
22.4
%
Segment Results (in
millions)
North America
Oct 1, 2023
Oct 2, 2022
%
Change
Oct 1, 2023
Oct 2, 2022
Quarter
Ended
As a % of North
America
total net revenues
Net revenues:
Company-operated stores
$
6,211.5
$
5,550.5
11.9
%
90.0
%
90.5
%
Licensed stores
685.9
583.4
17.6
9.9
9.5
Other
2.6
0.5
420.0
0.0
0.0
Total net revenues
6,900.0
6,134.4
12.5
100.0
100.0
Product and distribution costs
1,905.7
1,770.6
7.6
27.6
28.9
Store operating expenses
2,986.0
2,862.2
4.3
43.3
46.7
Other operating expenses
67.1
51.4
30.5
1.0
0.8
Depreciation and amortization expenses
236.6
205.2
15.3
3.4
3.3
General and administrative expenses
103.2
78.8
31.0
1.5
1.3
Restructuring and impairments
—
24.4
nm
—
0.4
Total operating expenses
5,298.6
4,992.6
6.1
76.8
81.4
Operating income
$
1,601.4
$
1,141.8
40.3
%
23.2
%
18.6
%
Supplemental Ratio:
Store operating expenses as a % of
company-operated store revenues
48.1
%
51.6
%
Year
Ended
Net revenues:
Company-operated stores
$
23,905.4
$
21,214.2
12.7
%
90.0
%
90.8
%
Licensed stores
2,659.1
2,150.5
23.7
10.0
9.2
Other
5.1
6.1
(16.4
)
0.0
0.0
Total net revenues
26,569.6
23,370.8
13.7
100.0
100.0
Product and distribution costs
7,530.4
6,677.2
12.8
28.3
28.6
Store operating expenses
11,959.2
10,860.0
10.1
45.0
46.5
Other operating expenses
263.8
202.1
30.5
1.0
0.9
Depreciation and amortization expenses
910.1
808.4
12.6
3.4
3.5
General and administrative expenses
389.7
303.3
28.5
1.5
1.3
Restructuring and impairments
20.7
33.3
(37.8
)
0.1
0.1
Total operating expenses
21,073.9
18,884.3
11.6
79.3
80.8
Operating income
$
5,495.7
$
4,486.5
22.5
%
20.7
%
19.2
%
Supplemental Ratio:
Store operating expenses as a % of
company-operated store revenues
50.0
%
51.2
%
International
Oct 1, 2023
Oct 2, 2022
%
Change
Oct 1, 2023
Oct 2, 2022
Quarter
Ended
As a % of
International
total net revenues
Net revenues:
Company-operated stores
$
1,468.4
$
1,350.9
8.7
%
74.2
%
76.0
%
Licensed stores
501.6
415.0
20.9
25.3
23.4
Other
9.9
11.1
(10.8
)
0.5
0.6
Total net revenues
1,979.9
1,777.0
11.4
100.0
100.0
Product and distribution costs
704.7
611.0
15.3
35.6
34.4
Store operating expenses
735.3
682.5
7.7
37.1
38.4
Other operating expenses
64.0
52.4
22.1
3.2
2.9
Depreciation and amortization expenses
84.3
121.5
(30.6
)
4.3
6.8
General and administrative expenses
91.0
92.6
(1.7
)
4.6
5.2
Total operating expenses
1,679.3
1,560.0
7.6
84.8
87.8
Income from equity investees
0.7
0.6
16.7
0.0
0.0
Operating income
$
301.3
$
217.6
38.5
%
15.2
%
12.2
%
Supplemental Ratio:
Store operating expenses as a % of
company-operated store revenues
50.1
%
50.5
%
Year
Ended
Net revenues:
Company-operated stores
$
5,556.9
$
5,361.9
3.6
%
74.2
%
77.3
%
Licensed stores
1,853.6
1,505.0
23.2
24.8
21.7
Other
77.1
73.2
5.3
1.0
1.1
Total net revenues
7,487.6
6,940.1
7.9
100.0
100.0
Product and distribution costs
2,608.4
2,357.7
10.6
34.8
34.0
Store operating expenses
2,761.1
2,701.8
2.2
36.9
38.9
Other operating expenses
219.0
191.4
14.4
2.9
2.8
Depreciation and amortization expenses
335.1
513.0
(34.7
)
4.5
7.4
General and administrative expenses
335.8
345.3
(2.8
)
4.5
5.0
Total operating expenses
6,259.4
6,109.2
2.5
83.6
88.0
Income from equity investees
2.7
2.3
17.4
0.0
0.0
Operating income
$
1,230.9
$
833.2
47.7
%
16.4
%
12.0
%
Supplemental Ratio:
Store operating expenses as a % of
company-operated store revenues
49.7
%
50.4
%
Channel Development
Oct 1, 2023
Oct 2, 2022
%
Change
Oct 1, 2023
Oct 2, 2022
Quarter
Ended
As a % of
Channel Development
total net revenues
Net revenues
$
486.1
$
483.7
0.5
%
Product and distribution costs
317.3
309.0
2.7
65.3
%
63.9
%
Other operating expenses
14.0
16.0
(12.5
)
2.9
3.3
Depreciation and amortization expenses
0.0
0.0
nm
0.0
0.0
General and administrative expenses
2.3
4.1
(43.9
)
0.5
0.8
Total operating expenses
333.6
329.1
1.4
68.6
68.0
Income from equity investees
118.7
90.0
31.9
24.4
18.6
Operating income
$
271.2
$
244.6
10.9
%
55.8
%
50.6
%
Year
Ended
Net revenues
$
1,893.8
$
1,843.6
2.7
%
Product and distribution costs
1,250.1
1,194.2
4.7
66.0
%
64.8
%
Other operating expenses
54.6
51.6
5.8
2.9
2.8
Depreciation and amortization expenses
0.1
0.1
nm
0.0
0.0
General and administrative expenses
8.4
12.2
(31.1
)
0.4
0.7
Total operating expenses
1,313.2
1,258.1
4.4
69.3
68.2
Income from equity investees
295.7
231.8
27.6
15.6
12.6
Gain from sale of assets
91.3
—
nm
4.8
—
Operating income
$
967.6
$
817.3
18.4
%
51.1
%
44.3
%
Corporate and Other
Oct 1, 2023
Oct 2, 2022
%
Change
Quarter
Ended
Net revenues
$
7.6
$
19.1
(60.2
)%
Product and distribution costs
5.4
20.4
(73.5
)
Other operating expenses
0.1
3.3
(97.0
)
Depreciation and amortization expenses
30.5
30.7
(0.7
)
General and administrative expenses
439.3
362.5
21.2
Restructuring and impairments
—
10.7
nm
Total operating expenses
475.3
427.6
11.2
Operating loss
$
(467.7
)
$
(408.5
)
14.5
%
Year
Ended
Net revenues
$
24.6
$
95.8
(74.3
)%
Product and distribution costs
20.2
88.3
(77.1
)
Other operating expenses
2.0
16.4
(87.8
)
Depreciation and amortization expenses
117.3
126.4
(7.2
)
General and administrative expenses
1,707.4
1,371.2
24.5
Restructuring and impairments
1.1
12.7
(91.3
)
Total operating expenses
1,848.0
1,615.0
14.4
Operating loss
$
(1,823.4
)
$
(1,519.2
)
20.0
%
STARBUCKS CORPORATION
CONSOLIDATED BALANCE
SHEETS
(unaudited, in millions, except
per share data)
Oct 1, 2023
Oct 2, 2022
ASSETS
Current assets:
Cash and cash equivalents
$
3,551.5
$
2,818.4
Short-term investments
401.5
364.5
Accounts receivable, net
1,184.1
1,175.5
Inventories
1,806.4
2,176.6
Prepaid expenses and other current
assets
359.9
483.7
Total current assets
7,303.4
7,018.7
Long-term investments
247.4
279.1
Equity investments
439.9
311.2
Property, plant and equipment, net
7,387.1
6,560.5
Operating lease, right-of-use asset
8,412.6
8,015.6
Deferred income taxes, net
1,769.8
1,799.7
Other long-term assets
546.5
554.2
Other intangible assets
120.5
155.9
Goodwill
3,218.3
3,283.5
TOTAL ASSETS
$
29,445.5
$
27,978.4
LIABILITIES AND SHAREHOLDERS'
EQUITY/(DEFICIT)
Current liabilities:
Accounts payable
$
1,544.3
$
1,441.4
Accrued liabilities
2,145.1
2,137.1
Accrued payroll and benefits
828.3
761.7
Current portion of operating lease
liability
1,275.3
1,245.7
Stored value card liability and current
portion of deferred revenue
1,700.2
1,641.9
Short-term debt
33.5
175.0
Current portion of long-term debt
1,818.6
1,749.0
Total current liabilities
9,345.3
9,151.8
Long-term debt
13,547.6
13,119.9
Operating lease liability
7,924.8
7,515.2
Deferred revenue
6,101.8
6,279.7
Other long-term liabilities
513.8
610.5
Total liabilities
37,433.3
36,677.1
Shareholders’ deficit:
Common stock ($0.001 par value) —
authorized, 2,400.0 shares; issued and outstanding, 1,142.6 and
1,147.9 shares, respectively
1.1
1.1
Additional paid-in capital
38.1
205.3
Retained deficit
(7,255.8
)
(8,449.8
)
Accumulated other comprehensive
income/(loss)
(778.2
)
(463.2
)
Total shareholders’ deficit
(7,994.8
)
(8,706.6
)
Noncontrolling interests
7.0
7.9
Total deficit
(7,987.8
)
(8,698.7
)
TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY/(DEFICIT)
$
29,445.5
$
27,978.4
STARBUCKS CORPORATION
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(unaudited and in millions)
Year Ended
Oct 1, 2023
Oct 2, 2022
Oct 3, 2021
OPERATING ACTIVITIES:
Net earnings including noncontrolling
interests
$
4,124.7
$
3,283.4
$
4,200.3
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization
1,450.3
1,529.4
1,524.1
Deferred income taxes, net
(59.4
)
(37.8
)
(146.2
)
Income earned from equity method
investees
(301.8
)
(268.7
)
(347.3
)
Distributions received from equity method
investees
222.8
231.2
336.0
Gain on sale of assets
(91.3
)
—
—
Net gain resulting from divestiture of
certain operations
—
—
(864.5
)
Stock-based compensation
302.7
271.5
319.1
Non-cash lease costs
1,365.9
1,497.7
1,248.6
Loss on retirement and impairment of
assets
101.4
91.4
226.2
Other
26.8
(67.8
)
(6.0
)
Cash provided by/(used in) changes in
operating assets and liabilities:
Accounts receivable
(4.1
)
(326.1
)
(43.0
)
Inventories
366.4
(641.0
)
(49.8
)
Income taxes payable
52.5
(149.6
)
286.1
Accounts payable
100.1
345.5
189.9
Deferred revenue
(110.8
)
(75.8
)
(6.1
)
Operating lease liability
(1,443.8
)
(1,625.6
)
(1,488.1
)
Other operating assets and liabilities
(93.7
)
339.6
609.8
Net cash provided by operating
activities
6,008.7
4,397.3
5,989.1
INVESTING ACTIVITIES:
Purchases of investments
(610.5
)
(377.9
)
(432.0
)
Sales of investments
2.5
72.6
143.2
Maturities and calls of investments
616.9
67.3
345.5
Additions to property, plant and
equipment
(2,333.6
)
(1,841.3
)
(1,470.0
)
Proceeds from sale of assets
110.0
—
—
Net proceeds from the divestiture of
certain operations
—
59.3
1,175.0
Other
(56.1
)
(126.3
)
(81.2
)
Net cash used in investing activities
(2,270.8
)
(2,146.3
)
(319.5
)
FINANCING ACTIVITIES:
Net (payments)/proceeds from issuance of
commercial paper
(175.0
)
175.0
(296.5
)
Net proceeds from issuance of short-term
debt
114.6
36.6
215.1
Repayments of short-term debt
(78.8
)
(36.6
)
(349.8
)
Net proceeds from issuance of long-term
debt
1,497.8
1,498.1
—
Repayments of long-term debt
(1,000.0
)
(1,000.0
)
(1,250.0
)
Proceeds from issuance of common stock
167.4
101.6
246.2
Cash dividends paid
(2,431.8
)
(2,263.3
)
(2,119.0
)
Repurchase of common stock
(984.4
)
(4,013.0
)
—
Minimum tax withholdings on share-based
awards
(89.3
)
(127.2
)
(97.0
)
Other
(11.1
)
(9.2
)
—
Net cash used in financing activities
(2,990.6
)
(5,638.0
)
(3,651.0
)
Effect of exchange rate changes on cash
and cash equivalents
(14.2
)
(250.3
)
86.2
Net increase/(decrease) in cash and cash
equivalents
733.1
(3,637.3
)
2,104.8
CASH AND CASH EQUIVALENTS:
Beginning of period
2,818.4
6,455.7
4,350.9
End of period
$
3,551.5
$
2,818.4
$
6,455.7
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the period for:
Interest, net of capitalized interest
$
524.3
$
474.7
$
501.1
Income taxes
$
1,294.2
$
1,157.6
$
756.3
Supplemental
Information
The following supplemental information is provided for
historical and comparative purposes.
U.S. Supplemental Data
Quarter Ended
Change (%)
($ in millions)
Oct 1, 2023
Oct 2, 2022
Revenues
$6,425.0
$5,703.3
13%
Change in Comparable Store Sales (1)
8%
11%
Change in Transactions
2%
1%
Change in Ticket
6%
10%
Store Count
16,352
15,878
3%
- Includes only Starbucks® company-operated stores open 13 months
or longer. Comparable store sales exclude Siren Retail stores.
Stores that are temporarily closed or operating at reduced hours
due to the COVID-19 pandemic remain in comparable store sales while
stores identified for permanent closure have been removed.
China Supplemental Data
Quarter Ended
Change (%)
($ in millions)
Oct 1, 2023
Oct 2, 2022
Revenues
$840.6
$775.6
8%
Change in Comparable Store Sales (1)
5%
(16)%
Change in Transactions
8%
(17)%
Change in Ticket
(3)%
1%
Store Count
6,806
6,021
13%
- Includes only Starbucks® company-operated stores open 13 months
or longer. Comparable store sales exclude the effects of
fluctuations in foreign currency exchange rates and Siren Retail
stores. Stores that are temporarily closed or operating at reduced
hours due to the COVID-19 pandemic remain in comparable store sales
while stores identified for permanent closure have been
removed.
Store Data
Net stores opened/(closed) and
transferred during the period
Quarter Ended
Year Ended
Stores open as of
Oct 1, 2023
Oct 2, 2022
Oct 1, 2023
Oct 2, 2022
Oct 1, 2023
Oct 2, 2022
North America:
Company-operated stores
176
166
412
355
10,628
10,216
Licensed stores
42
79
103
114
7,182
7,079
Total North America
218
245
515
469
17,810
17,295
International:
Company-operated stores
384
320
927
765
8,964
8,037
Licensed stores
214
198
885
644
11,264
10,379
Total International
598
518
1,812
1,409
20,228
18,416
Total Company
816
763
2,327
1,878
38,038
35,711
Non-GAAP Disclosure
In addition to the GAAP results provided in this release, the
company provides certain non-GAAP financial measures that are not
in accordance with, or alternatives for, generally accepted
accounting principles in the United States. Our non-GAAP financial
measures of non-GAAP general and administrative expenses (G&A),
non-GAAP operating income, non-GAAP operating income growth,
non-GAAP operating margin, non-GAAP effective tax rate and non-GAAP
earnings per share exclude the below-listed items and their related
tax impacts, as they do not contribute to a meaningful evaluation
of the company’s future operating performance or comparisons to the
company's past operating performance. The GAAP measures most
directly comparable to non-GAAP G&A, non-GAAP operating income,
non-GAAP operating income growth, non-GAAP operating margin,
non-GAAP effective tax rate and non-GAAP earnings per share are
general and administrative expenses, operating income, operating
income growth, operating margin, effective tax rate and diluted net
earnings per share, respectively.
Non-GAAP Exclusion
Rationale
Restructuring and impairment costs
Management excludes restructuring and
impairment costs for reasons discussed above. These expenses are
anticipated to be completed within a finite period of time.
Transaction and integration-related
costs
Management excludes transaction and
integration costs, primarily amortization, of the acquired
intangible assets for reasons discussed above. Additionally, we
incur certain costs associated with certain divestiture activities.
The majority of these costs will be recognized over a finite period
of time.
Gain on sale of assets
Management excludes the gain related to
the sale of assets to Nestlé, primarily consisting of intellectual
properties associated with the Seattle's Best Coffee brand, as
these items do not reflect future gains or tax impacts for reasons
discussed above.
Sale of certain joint venture operations
and retail operations
Management excludes the gain or loss, and
subsequent adjustments, if any, related to the sale of certain
joint venture and retail operations as these activities were
specific to the sale and for reasons discussed above.
Non-GAAP G&A, non-GAAP operating income, non-GAAP operating
income growth, non-GAAP operating margin, non-GAAP effective tax
rate and non-GAAP earnings per share may have limitations as
analytical tools. 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, in millions except
per share data)
Quarter Ended (1)
Consolidated
Oct 1, 2023
Oct 2, 2022
Change
Operating income, as reported (GAAP)
$
1,706.2
$
1,195.5
42.7
%
Restructuring and impairment costs (2)
—
35.1
Transaction and integration-related costs
(3)
—
42.0
Non-GAAP operating income
$
1,706.2
$
1,272.6
34.1
%
Operating margin, as reported (GAAP)
18.2
%
14.2
%
400 bps
Restructuring and impairment costs (2)
—
0.4
Transaction and integration-related costs
(3)
—
0.5
Non-GAAP operating margin
18.2
%
15.1
%
310 bps
Diluted net earnings per share, as
reported (GAAP)
$
1.06
$
0.76
39.5
%
Restructuring and impairment costs (2)
—
0.03
Transaction and integration-related costs
(3)
—
0.04
Income tax effect on Non-GAAP adjustments
(4)
—
(0.02
)
Non-GAAP EPS
$
1.06
$
0.81
30.9
%
- Certain numbers may not foot due to rounding convention.
- Represents costs associated with our restructuring
efforts.
- The fourth quarter of fiscal 2022 includes amortization expense
of acquired intangible assets associated with the acquisition of
East China and other expenses associated with the sale of our
Evolution Fresh business.
- Adjustments were determined based on the nature of the
underlying items and their relevant jurisdictional tax rates.
STARBUCKS CORPORATION
RECONCILIATION OF SELECTED
GAAP MEASURES TO NON-GAAP MEASURES
(unaudited, in millions except
per share data)
Year Ended (1)
Consolidated
Oct 1, 2023
Oct 2, 2022
Change
Operating income, as reported (GAAP)
$
5,870.8
$
4,617.8
27.1
%
Restructuring and impairment costs (2)
21.8
46.0
Transaction and integration-related costs
(3)
0.1
191.2
Gain on sale of assets
(91.3
)
—
Non-GAAP operating income
$
5,801.4
$
4,855.0
19.5
%
Operating margin, as reported (GAAP)
16.3
%
14.3
%
200 bps
Restructuring and impairment costs (2)
0.1
0.1
Transaction and integration-related costs
(3)
—
0.6
Gain on sales of assets
(0.3
)
—
Non-GAAP operating margin
16.1
%
15.1
%
100 bps
Diluted net earnings per share, as
reported (GAAP)
$
3.58
$
2.83
26.5
%
Restructuring and impairment costs (2)
0.02
0.04
Transaction and integration-related costs
(3)
0.00
0.17
Gain on sale of assets
(0.08
)
—
Gain resulting from divestiture of certain
company-operated business and joint venture operations
—
(0.01
)
Correction of prior year estimated tax
expense (4)
—
(0.02
)
Income tax effect on Non-GAAP adjustments
(5)
0.02
(0.05
)
Non-GAAP EPS
$
3.54
$
2.96
19.6
%
- Certain numbers may not foot due to rounding convention.
- Represents costs associated with our restructuring
efforts.
- Fiscal 2023 includes transaction-related expenses related to
the sale of our Seattle's Best Coffee brand. Fiscal 2022 includes
amortization expense of acquired intangible assets associated with
the acquisition of East China as well as other expenses associated
with our Russia market exit and with the sale of our Evolution
Fresh business.
- Represents a beneficial return-to-provision adjustment related
to the prior year divestiture of certain joint venture operations
that also received non-GAAP treatment.
- Adjustments were determined based on the nature of the
underlying items and their relevant jurisdictional tax rates.
Q4 YTD FY23 NON-GAAP
DISCLOSURE DETAILS
(in millions and before income
taxes)
Q4 YTD FY23
North America
International
Channel Development
Corporate and Other
Consolidated
Statement of Earnings Line Item
Restructuring and Impairment
Costs
Transaction and
Integration-Related Costs
Transaction and
Integration-Related Costs
Gain on Sale of Assets
Transaction and
Integration-Related Costs
Restructuring and Impairment
Costs
Total Non-GAAP
Adjustment
Other operating expenses
$ —
$ —
$ 0.3
$ —
$ (0.2)
$ —
$ 0.1
Restructuring and impairments
20.7
—
—
—
—
1.1
21.8
Gain on sale of assets
—
—
—
(91.3)
—
—
(91.3)
Total impact to operating income
$ (20.7)
$ —
$ (0.3)
$ 91.3
$ 0.2
$ (1.1)
$ 69.4
Non-Operating gain
Interest income and other, net
$ (6.9)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231102590090/en/
Starbucks Contact, Investor Relations: Tiffany Willis
investorrelations@starbucks.com
Starbucks Contact, Media: Reggie Borges
press@starbucks.com
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