Q4 Comparable Store Sales of -9% in the U.S.
and -3% in China, Demonstrating Sustained Recovery Q4 GAAP EPS of
$0.33; Non-GAAP EPS of $0.51 Reflecting Substantial Improvement
from Q3 Active Starbucks® Rewards Membership in the U.S. Up 10%
Year-Over-Year to 19.3 Million Fiscal 2021 Outlook Reaffirms Path
to Full Recovery
Starbucks Corporation (NASDAQ: SBUX) today reported financial
results for its 13-week fiscal fourth quarter ended September 27,
2020. GAAP results in fiscal 2020 and fiscal 2019 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.
“I am very pleased with our strong finish to fiscal 2020,
underpinned by a faster-than-expected recovery in our two lead
growth markets, the U.S. and China. These results demonstrate the
continued strength and relevance of our brand, the effectiveness of
the actions we’ve taken to adapt to meaningful changes in consumer
behavior and the extraordinary efforts of our green apron partners
to serve our customers and communities in challenging
circumstances,” said Kevin Johnson, president and ceo.
“The guiding principles we established at the onset of the
pandemic, combined with our industry-leading digital platform and
our ability to innovate rapidly, continue to fuel our recovery and
provide confidence in a robust operating outlook for fiscal 2021.
Our strategies are working and I am optimistic that we will emerge
from the COVID-19 pandemic as a stronger and more resilient
company,” concluded Johnson.
Q4 Fiscal 2020
Highlights
- Global comparable store sales declined 9%, driven by a 23%
decrease in comparable transactions, partially offset by a 17%
increase in average ticket
- Americas and U.S. comparable store sales declined 9%, driven by
a 25% decrease in comparable transactions, partially offset by a
21% increase in average ticket
- International comparable store sales were down 10%, driven by a
15% decline in comparable transactions, partially offset by a 7%
increase in average ticket; China comparable store sales were down
3%, with comparable transactions down 7%, partially offset by a 5%
increase in average ticket; International and China comparable
store sales are inclusive of a benefit from value-added tax
exemptions of approximately 2% and 4%, respectively
- The company opened 480 net new stores in Q4, yielding 4%
year-over-year unit growth, ending the period with 32,660 stores
globally, of which 51% and 49% were company-operated and licensed,
respectively
- Stores in the U.S. and China comprised 61% of the company’s
global portfolio at the end of Q4, with 15,337 and 4,706 stores,
respectively
- Consolidated net revenues of $6.2 billion declined 8% from the
prior year primarily due to lost sales related to the COVID-19
outbreak
- Lost sales of approximately $1.2 billion relative to the
company’s expectations before the outbreak included the effects of
modified operations, reduced hours, reduced customer traffic and
temporary store closures(1)
- GAAP operating margin of 9.0%, down from 16.1% in the prior
year primarily due to the COVID-19 outbreak, mainly sales
deleverage, material investments in retail partner support and
other items; GAAP operating margin was also adversely impacted by
the Americas store portfolio optimization expenses
- Non-GAAP operating margin of 13.2%, down from 17.2% in the
prior year
- GAAP earnings per share of $0.33, down from $0.67 in the prior
year primarily due to unfavorable impacts related to the COVID-19
outbreak totaling approximately -$0.35 per share(1) (2)
- Non-GAAP earnings per share of $0.51, down from $0.70 in the
prior year
- Starbucks® Rewards loyalty program 90-day active members in the
U.S. increased to 19.3 million, up 10% year-over-year
Full Year Fiscal 2020
Highlights
- Global comparable store sales declined 14%, driven by a 22%
decrease in comparable transactions, partially offset by a 10%
increase in average ticket
- Americas and U.S. comparable store sales declined 12%, driven
by a 21% decrease in comparable transactions, partially offset by
an 11% increase in average ticket
- International comparable store sales were down 19%, driven by a
23% decline in comparable transactions, partially offset by a 5%
increase in average ticket; China comparable store sales declined
17%, driven by a 21% decrease in comparable transactions, slightly
offset by a 5% increase in average ticket; International and China
comparable store sales are inclusive of a benefit from value-added
tax exemptions of approximately 1% and 2%, respectively
- Consolidated net revenues of $23.5 billion declined 11.3% from
the prior year primarily due to lost sales related to the COVID-19
outbreak
- Lost sales of approximately $5.1 billion relative to the
company’s expectations before the outbreak included the effects of
temporary store closures, modified operations, reduced hours and
reduced customer traffic(1)
- GAAP operating margin of 6.6%, down from 15.4% in the prior
year primarily due to the COVID-19 outbreak, mainly sales
deleverage, material investments in retail partner support and
other items
- Non-GAAP operating margin of 9.1%, down from 17.2% in the prior
year
- GAAP earnings per share of $0.79, down from $2.92 in the prior
year primarily due to unfavorable impacts related to the COVID-19
outbreak totaling approximately -$2.01 per share(1) (2)
- Non-GAAP earnings per share of $1.17, down from $2.83 in the
prior year
(1)
In this earnings release, we estimated the
impact of COVID-19 by comparing actual results to our previous
forecasts. These forecasts were created before the spread of the
virus and were based on information available at the time and on
various assumptions that we believe were reasonable.
(2)
In this earnings release, the EPS impact
of COVID-19 represents an approximation based on the pandemic’s
estimated impact on operating results. It does not incorporate any
impacts of COVID-19 on non-operating items, such as interest
income, interest expense, income taxes and outstanding shares.
Q4 Americas Segment
Results
Quarter Ended
Change (%)
($ in millions)
Sep 27, 2020
Sep 29, 2019
Comparable Store Sales Growth (1)
(9)%
6%
Change in Transactions
(25)%
3%
Change in Ticket
21%
3%
Store Count
18,354
18,067
2%
Revenues
$4,232.9
$4,651.4
(9)%
Operating Income
$510.3
$938.9
(46)%
Operating Margin
12.1%
20.2%
(810) 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 outbreak remain in
comparable store sales while stores identified for permanent
closure have been removed.
Net revenues for the Americas segment of $4.2 billion in Q4 FY20
were 9% lower relative to Q4 FY19, primarily due to a 9% decrease
in comparable store sales as well as lower product sales to and
royalty revenues from our licensees as a result of lost sales
related to the COVID-19 outbreak. These decreases were slightly
offset by 287 net new store openings, or 2% store growth, over the
past 12 months.
The Americas segment reported operating income of $510.3 million
in Q4 FY20, compared to $938.9 million in Q4 FY19. Operating margin
of 12.1% contracted 810 basis points, primarily due to expenses
relating to the Americas store portfolio optimization, the impact
of the COVID-19 outbreak including sales deleverage and additional
costs incurred, as well as growth in retail partner wages and
benefits, partially offset by labor efficiency.
Q4 International Segment
Results
Quarter Ended
Change (%)
($ in millions)
Sep 27, 2020
Sep 29, 2019
Comparable Store Sales Growth (1)
(10)%
3%
Change in Transactions
(15)%
1%
Change in Ticket
7%
3%
Store Count
14,306
13,189
8%
Revenues
$1,492.3
$1,572.1
(5)%
Operating Income
$179.5
$262.7
(32)%
Operating Margin
12.0%
16.7%
(470) 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 outbreak remain in
comparable store sales while stores identified for permanent
closure have been removed. Comparable store sales include a 2%
benefit related to a temporary value-added tax exemption in
China.
Net revenues for the International segment of $1.5 billion in Q4
FY20 were 5% lower relative to Q4 FY19, primarily due to a 10%
decrease in comparable store sales as well as lower product sales
to and royalty revenues from our international licensees as a
result of lost sales related to the COVID-19 outbreak. These
decreases were partially offset by 1,117 net new store openings, or
8% store growth, over the past 12 months.
The International segment reported operating income of $179.5
million in Q4 FY20 compared to $262.7 million in Q4 FY19. Operating
margin contracted 470 basis points to 12.0%, primarily due to the
impact of the COVID-19 outbreak, mainly sales deleverage and
additional costs incurred including non-restructuring related store
asset impairments, as well as strategic investments, mainly
technology and digital initiatives in China and Japan.
Q4 Channel Development Segment
Results
Quarter Ended
Change (%)
($ in millions)
Sep 27, 2020
Sep 29, 2019
Revenues
$464.0
$508.1
(9)%
Operating Income
$197.9
$190.9
4%
Operating Margin
42.7%
37.6%
510 bps
Net revenues for the Channel Development segment of $464.0
million in Q4 FY20 were 9% lower relative to Q4 FY19. The decline
was primarily driven by an 8% unfavorable impact of Global Coffee
Alliance transition-related activities, including a structural
change in our single-serve business, as well as an adverse impact
of COVID-19 on the Foodservice business, partially offset by growth
in at-home coffee and ready-to-drink products.
Operating income increased 4% to $197.9 million in Q4 FY20, up
from $190.9 million in Q4 FY19. Operating margin expanded 510 basis
points to 42.7%, primarily due to a business mix shift driven by
strength in our ready-to-drink products and the structural change
in our single-serve business.
Global Store Status
At the end of Q4 FY20, approximately 98% of our global
company-operated store portfolio was open, with 97% in the U.S. and
99% in China, as well as 99% in Japan and 97% in Canada. In the
U.S. and China, limited or full lobby seating was available in
approximately 63% and 90% of company-operated stores, respectively.
As of the end of Q4 FY20, approximately 93% of our global licensed
store portfolio was open. Within the U.S. and Canada licensed store
portfolios, the remaining temporary closures were predominantly in
airport, college and university locations.
Fiscal 2021 Guidance
The company introduces the following fiscal 2021 guidance for Q1
and the full year. Please note that Starbucks fiscal year 2021 is a
53-week year instead of the usual 52 weeks. The impact of the 53rd
week will be reflected in our results for the fourth quarter of
fiscal 2021. All full-year guidance for the metrics noted below is
for fiscal year 2021 on a 53-week basis except comparable store
sales growth metrics, which are relative to fiscal year 2020 on a
52-week basis.
- Global comparable store sales growth of 18% to 23%
- Americas and U.S. comparable store sales growth of 17% to
22%
- International comparable store sales growth of 25% to 30%
- China comparable store sales growth of 27% to 32%
- Approximately 2,150 new store openings and 1,100 net new
Starbucks stores globally
- Americas approximately 850 new store openings and approximately
50 net new stores
- International approximately 1,300 new store openings and 1,050
net new stores
- Approximately 600 net new stores in China
- Consolidated revenue of $28.0 billion to $29.0 billion,
inclusive of a $500 million impact attributable to the 53rd week
- Channel Development revenue of $1.4 billion to $1.6
billion
- Consolidated GAAP operating margin of 14% to 15%
- Consolidated Non-GAAP operating margin of 16% to 17%
- Interest expense of approximately $470 million to $480
million
- GAAP and non-GAAP effective tax rates in the mid-20%s
- GAAP EPS in the range of $0.32 to $0.37 for Q1 and $2.34 to
$2.54 for full year, inclusive of a $0.10 impact attributable to
the 53rd week
- Non-GAAP EPS in the range of $0.50 to $0.55 for Q1 and $2.70 to
$2.90 for full year, inclusive of a $0.10 impact attributable to
the 53rd week
- Capital expenditures of approximately $1.9 billion
Please note, the guidance provided above is dependent on our
current expectations, which may be impacted by evolving external
conditions and local safety guidelines as well as shifts in
customer routines, preferences and mobility.
Please refer to the reconciliation of GAAP measures to non-GAAP
measures at the end of this release.
The company will provide additional information regarding its
business outlook during its regularly scheduled quarterly earnings
conference call today; this information will also be available
following the call on the company’s website at http://investor.starbucks.com.
Company Updates
1. In September, the company launched enhancements to its
industry-leading Starbucks® Rewards loyalty program by giving
members more payment options and ways to earn Stars through the
Starbucks App. Now in company-operated stores in the U.S. and
Canada, new and current Starbucks Rewards members are able to pay
with cash, credit/debit cards or select mobile wallets and earn
Stars toward free items without having to preload a Starbucks Card
within the app.
2. As of the end of fiscal year 2020, the company had opened 581
net new stores in China, with 259 net new stores opened in the
fourth quarter of fiscal 2020, representing a record-level pace of
store development for Starbucks China. These net new store openings
bring the China total store count to over 4,700 company-operated
Starbucks stores.
3. As a part of the company's commitment to 100% ethically
sourced coffee, Starbucks announced the new Starbucks Digital
Traceability tool. By scanning a code on the coffee bag or entering
a serial number, the tool transforms each bag of coffee beans into
a digital passport, launching coffee lovers on a virtual expedition
to meet farmers, roasters and baristas and to explore
coffee-growing regions around the world.
4. As a continuation of the company’s passion and commitment to
a more sustainable future, Starbucks joined the new “Transform to
Net Zero” initiative as one of nine founding members. The
initiative’s objective is to accelerate the transition to a
net-zero emissions global economy no later than 2050.
5. As a part of its ongoing commitment to advancing racial and
social equity, Starbucks announced several new actions it will take
on its journey to that commitment. The company committed to setting
annual Inclusion and Diversity goals based on retention rates and
progress toward achieving Black, Indigenous and People of Color
(BIPOC) representation of at least 30% at all corporate levels and
at least 40% in all retail and manufacturing roles by 2025.
6. The Board of Directors declared a cash dividend of $0.45 per
share, an increase of 10%, payable on November 27, 2020 to
shareholders of record as of November 12, 2020. This declaration
marks the tenth consecutive annual dividend increase for the
company.
Conference Call
Starbucks will hold a conference call today at 2:00 p.m. Pacific
Time, which will be hosted by Kevin Johnson, president and ceo, and
Patrick Grismer, 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,
November 27, 2020.
About Starbucks
Since 1971, Starbucks Coffee Company has been committed to
ethically sourcing and roasting high-quality arabica coffee. Today,
with more than 32,000 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 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 the applicable securities laws and
regulations. Generally, these statements can be identified by the
use of words such as “anticipate,” “believe,” “continue,” “could,”
“estimate,” “expect,” “forecast,” “intend,” “may,” “outlook,”
“plan,” “potential,” “predict,” “project,” “remain,” “should,”
“will,” “would,” and similar expressions intended to identify
forward-looking statements, although not all forward-looking
statements contain these identifying words. These statements
include statements relating to: the estimated financial impact
related to the outbreak of coronavirus disease (COVID-19) including
the outlook, guidance and projections for revenues, earnings per
share, operating income, operating margins, comparable store sales,
net new stores, capital expenditures, interest expense and fiscal
2021 guidance; the nature and extent of the impact of COVID-19 on
our business, operations and financial results; the anticipated
timing and effects of recovery of our business, including our
ability to expand seating and operating hours at our stores; our
plans for streamlining our operations, including store openings,
closures and changes in store formats and models; our ability to
continue steady business improvement and improve customer and
partner experiences; and our ability to emerge from this global
crisis and drive long-term growth. These forward-looking statements
do not represent historical data, are based on currently available
operating, financial and competitive information and are subject to
a number of significant risks and uncertainties. Actual future
results and trends may differ materially depending on a variety of
factors, including, but not limited to: further spread of COVID-19;
regulatory measures or voluntary actions that may be put in place
to limit the spread of COVID-19, including restrictions on business
operations or social distancing requirements and the duration and
efficacy of such restrictions; the potential for a resurgence of
COVID-19 infections in a given geographic region after it has hit
its “peak”; fluctuations in U.S. and international economies and
currencies; our ability to preserve, grow and leverage our brands;
the ability of our business partners and third-party providers to
fulfill their responsibilities and commitments; potential negative
effects of incidents involving food or beverage-borne illnesses,
tampering, adulteration, contamination or mislabeling; potential
negative effects of material breaches of our information technology
systems to the extent we experience a material breach; material
failures of our information technology systems; costs associated
with, and the successful execution of, the company’s initiatives
and plans, including the integration of the East China business and
the successful expansion of our Global Coffee Alliance with Nestlé;
our ability to obtain financing on acceptable terms; the acceptance
of the company’s products by our customers, evolving consumer
preferences and tastes and the availability of consumer financing;
changes in the availability and cost of labor; the impact of
competition; inherent risks of operating a global business; the
prices and availability of coffee, dairy and other raw materials;
the effect of legal proceedings; and the effects of changes in tax
laws and related guidance and regulations that may be implemented
and other risks detailed in the company filings with the Securities
and Exchange Commission, including the “Risk Factors” sections of
Starbucks Annual Report on Form 10-K for the fiscal year ended
September 29, 2019 and Starbucks Quarterly Report on Form 10-Q for
the fiscal quarter ended June 28, 2020. The company assumes no
obligation to update any of these forward-looking statements.
Non-GAAP Financial
Measures
Certain non-GAAP measures included in our press release and in
our investor conference call related to these results were not
reconciled to the comparable GAAP financial measures because the
GAAP measures are not accessible on a forward-looking basis. The
company is unable to reconcile these forward-looking non-GAAP
financial measures to the most directly comparable GAAP measures
without unreasonable efforts because the company is currently
unable to predict with a reasonable degree of certainty the type
and extent of certain items that would be expected to impact GAAP
measures for these periods but would not impact the non-GAAP
measures. Such items may include acquisitions, divestitures,
restructuring and other items. The unavailable information could
have a significant impact on the company’s GAAP financial
results.
STARBUCKS CORPORATION
CONSOLIDATED STATEMENTS OF
EARNINGS
(unaudited, in millions, except
per share data)
Quarter Ended
Quarter Ended
Sep 27, 2020
Sep 29, 2019
%
Change
Sep 27, 2020
Sep 29, 2019
As a % of total net
revenues
Net revenues:
Company-operated stores
$
5,173.6
$
5,480.1
(5.6
)%
83.4
%
81.2
%
Licensed stores
544.6
734.7
(25.9
)
8.8
10.9
Other
484.9
532.2
(8.9
)
7.8
7.9
Total net revenues
6,203.1
6,747.0
(8.1
)
100.0
100.0
Product and distribution costs(1)
1,976.8
2,139.6
(7.6
)
31.9
31.7
Store operating expenses
2,683.4
2,709.5
(1.0
)
43.3
40.2
Other operating expenses
99.9
91.6
9.1
1.6
1.4
Depreciation and amortization expenses
362.9
344.7
5.3
5.9
5.1
General and administrative expenses
439.0
458.4
(4.2
)
7.1
6.8
Restructuring and impairments
195.0
11.8
nm
3.1
0.2
Total operating expenses
5,757.0
5,755.6
—
92.8
85.3
Income from equity investees
112.2
91.9
22.1
1.8
1.4
Operating income
558.3
1,083.3
(48.5
)
9.0
16.1
Interest income and other, net
9.1
16.4
(44.5
)
0.1
0.2
Interest expense
(125.0
)
(95.7
)
30.6
(2.0
)
(1.4
)
Earnings before income taxes
442.4
1,004.0
(55.9
)
7.1
14.9
Income tax expense
49.7
201.5
(75.3
)
0.8
3.0
Net earnings including noncontrolling
interests
392.7
802.5
(51.1
)
6.3
11.9
Net earnings/(loss) attributable to
noncontrolling interests
0.1
(0.4
)
(125.0
)
—
—
Net earnings attributable to
Starbucks
$
392.6
$
802.9
(51.1
)
6.3
%
11.9
%
Net earnings per common share -
diluted
$
0.33
$
0.67
(50.7
)%
Weighted avg. shares outstanding -
diluted
1,179.0
1,205.6
Cash dividends declared per share(2)
$
—
$
0.41
Supplemental Ratios:
Store operating expenses as a % of
company-operated store revenues
51.9
%
49.4
%
Effective tax rate including
noncontrolling interests
11.2
%
20.1
%
(1)
The caption "Product and distribution
costs" replaced "Cost of sales" in financial statements published
in periods prior to our third quarter of fiscal 2020. Besides the
name change, there were no other changes in the types of costs
reported within the caption.
(2)
Subsequent to our year-end, on September
30, 2020, we declared a cash dividend of $0.45 per share payable on
November 27, 2020 to shareholders of record on November 12,
2020.
Year Ended
Year Ended
Sep 27, 2020
Sep 29, 2019
%
Change
Sep 27, 2020
Sep 29, 2019
As a % of total net
revenues
Net revenues:
Company-operated stores
$
19,164.6
$
21,544.4
(11.0
)%
81.5
%
81.3
%
Licensed stores
2,327.1
2,875.0
(19.1
)
9.9
10.8
Other
2,026.3
2,089.2
(3.0
)
8.6
7.9
Total net revenues
23,518.0
26,508.6
(11.3
)
100.0
100.0
Product and distribution costs
7,694.9
8,526.9
(9.8
)
32.7
32.2
Store operating expenses
10,764.0
10,493.6
2.6
45.8
39.6
Other operating expenses
430.3
371.0
16.0
1.8
1.4
Depreciation and amortization expenses
1,431.3
1,377.3
3.9
6.1
5.2
General and administrative expenses
1,679.6
1,824.1
(7.9
)
7.1
6.9
Restructuring and impairments
278.7
135.8
105.2
1.2
0.5
Total operating expenses
22,278.8
22,728.7
(2.0
)
94.7
85.7
Income from equity investees
322.5
298.0
8.2
1.4
1.1
Operating income
1,561.7
4,077.9
(61.7
)
6.6
15.4
Net gain resulting from divestiture of
certain operations
—
622.8
nm
—
2.3
Interest income and other, net
39.7
96.5
(58.9
)
0.2
0.4
Interest expense
(437.0
)
(331.0
)
32.0
(1.9
)
(1.2
)
Earnings before income taxes
1,164.4
4,466.2
(73.9
)
5.0
16.8
Income tax expense
239.7
871.6
(72.5
)
1.0
3.3
Net earnings including noncontrolling
interests
924.7
3,594.6
(74.3
)
3.9
13.6
Net loss attributable to noncontrolling
interests
(3.6
)
(4.6
)
(21.7
)
—
—
Net earnings attributable to
Starbucks
$
928.3
$
3,599.2
(74.2
)
3.9
%
13.6
%
Net earnings per common share -
diluted
$
0.79
$
2.92
(72.9
)%
Weighted avg. shares outstanding -
diluted
1,181.8
1,233.2
Cash dividends declared per share(1)
$
1.23
$
1.49
Supplemental Ratios:
Store operating expenses as a % of
company-operated store revenues
56.2
%
48.7
%
Effective tax rate including
noncontrolling interests
20.6
%
19.5
%
(1)
Subsequent to our year-end, on September
30, 2020, we declared a cash dividend of $0.45 per share payable on
November 27, 2020 to shareholders of record on November 12,
2020.
Segment Results
(in millions)
Americas
Sep 27, 2020
Sep 29, 2019
%
Change
Sep 27, 2020
Sep 29, 2019
Quarter
Ended
As a % of Americas total net
revenues
Net revenues:
Company-operated stores
$
3,875.3
$
4,164.2
(6.9
)%
91.6
%
89.5
%
Licensed stores
355.9
484.0
(26.5
)
8.4
10.4
Other
1.7
3.2
(46.9
)
—
0.1
Total net revenues
4,232.9
4,651.4
(9.0
)
100.0
100.0
Product and distribution costs
1,169.4
1,278.9
(8.6
)
27.6
27.5
Store operating expenses
2,060.6
2,112.1
(2.4
)
48.7
45.4
Other operating expenses
41.8
34.2
22.2
1.0
0.7
Depreciation and amortization expenses
190.0
180.6
5.2
4.5
3.9
General and administrative expenses
65.2
106.0
(38.5
)
1.5
2.3
Restructuring and impairments
195.6
0.7
nm
4.6
—
Total operating expenses
3,722.6
3,712.5
0.3
87.9
79.8
Operating income
$
510.3
$
938.9
(45.6
)%
12.1
%
20.2
%
Supplemental Ratio:
Store operating expenses as a % of
company-operated store revenues
53.2
%
50.7
%
Year
Ended
Net revenues:
Company-operated stores
$
14,778.8
$
16,288.2
(9.3
)%
90.2
%
89.2
%
Licensed stores
1,592.9
1,958.0
(18.6
)
9.7
10.7
Other
7.5
12.8
(41.4
)
—
0.1
Total net revenues
16,379.2
18,259.0
(10.3
)
100.0
100.0
Product and distribution costs
4,611.5
5,174.7
(10.9
)
28.2
28.3
Store operating expenses
8,488.0
8,064.8
5.2
51.8
44.2
Other operating expenses
166.8
159.8
4.4
1.0
0.9
Depreciation and amortization expenses
762.0
696.1
9.5
4.7
3.8
General and administrative expenses
268.0
323.9
(17.3
)
1.6
1.8
Restructuring and impairments
257.6
56.9
352.7
1.6
0.3
Total operating expenses
14,553.9
14,476.2
0.5
88.9
79.3
Operating income
$
1,825.3
$
3,782.8
(51.7
)%
11.1
%
20.7
%
Supplemental Ratio:
Store operating expenses as a % of
company-operated store revenues
57.4
%
49.5
%
International
Sep 27, 2020
Sep 29, 2019
%
Change
Sep 27, 2020
Sep 29, 2019
Quarter
Ended
As a % of
International
total net revenues
Net revenues:
Company-operated stores
$
1,298.3
$
1,315.9
(1.3
)%
87.0
%
83.7
%
Licensed stores
188.7
250.7
(24.7
)
12.6
15.9
Other
5.3
5.5
(3.6
)
0.4
0.3
Total net revenues
1,492.3
1,572.1
(5.1
)
100.0
100.0
Product and distribution costs
468.0
486.1
(3.7
)
31.4
30.9
Store operating expenses
622.8
597.3
4.3
41.7
38.0
Other operating expenses
36.2
31.9
13.5
2.4
2.0
Depreciation and amortization expenses
133.1
126.5
5.2
8.9
8.0
General and administrative expenses
82.5
82.4
0.1
5.5
5.2
Restructuring and impairments
(0.6
)
12.0
nm
—
0.8
Total operating expenses
1,342.0
1,336.2
0.4
89.9
85.0
Income from equity investees
29.2
26.8
9.0
2.0
1.7
Operating income
$
179.5
$
262.7
(31.7
)%
12.0
%
16.7
%
Supplemental Ratio:
Store operating expenses as a % of
company-operated store revenues
48.0
%
45.4
%
Year
Ended
Net revenues:
Company-operated stores
$
4,385.8
$
5,256.2
(16.6
)%
85.2
%
84.9
%
Licensed stores
734.2
917.0
(19.9
)
14.3
14.8
Other
27.6
17.5
57.7
0.5
0.3
Total net revenues
5,147.6
6,190.7
(16.8
)
100.0
100.0
Product and distribution costs
1,682.0
1,894.9
(11.2
)
32.7
30.6
Store operating expenses
2,276.0
2,428.5
(6.3
)
44.2
39.2
Other operating expenses
141.3
116.4
21.4
2.7
1.9
Depreciation and amortization expenses
518.4
511.5
1.3
10.1
8.3
General and administrative expenses
279.4
317.9
(12.1
)
5.4
5.1
Restructuring and impairments
(1.2
)
59.2
nm
—
1.0
Total operating expenses
4,895.9
5,328.4
(8.1
)
95.1
86.1
Income from equity investees
102.3
102.4
(0.1
)
2.0
1.7
Operating income
$
354.0
$
964.7
(63.3
)%
6.9
%
15.6
%
Supplemental Ratio:
Store operating expenses as a % of
company-operated store revenues
51.9
%
46.2
%
Channel Development
Sep 27, 2020
Sep 29, 2019
%
Change
Sep 27, 2020
Sep 29, 2019
Quarter
Ended
As a % of Channel
Development total net revenues
Net revenues
$
464.0
$
508.1
(8.7
)%
Product and distribution costs
327.8
359.1
(8.7
)
70.6
%
70.7
%
Other operating expenses
18.5
20.3
(8.9
)
4.0
4.0
Depreciation and amortization expenses
0.3
0.3
—
0.1
0.1
General and administrative expenses
2.5
2.6
(3.8
)
0.5
0.5
Total operating expenses
349.1
382.3
(8.7
)
75.2
75.2
Income from equity investees
83.0
65.1
27.5
17.9
12.8
Operating income
$
197.9
$
190.9
3.7
%
42.7
%
37.6
%
Year
Ended
Net revenues
$
1,925.0
$
1,992.6
(3.4
)%
Product and distribution costs
1,338.1
1,390.0
(3.7
)
69.5
%
69.8
%
Other operating expenses
108.2
76.2
42.0
5.6
3.8
Depreciation and amortization expenses
1.2
13.0
(90.8
)
0.1
0.7
General and administrative expenses
10.5
11.5
(8.7
)
0.5
0.6
Total operating expenses
1,458.0
1,490.7
(2.2
)
75.7
74.8
Income from equity investees
220.2
195.6
12.6
11.4
9.8
Operating income
$
687.2
$
697.5
(1.5
)%
35.7
%
35.0
%
Corporate and Other
Sep 27, 2020
Sep 29, 2019
% Change
Quarter
Ended
Net revenues
$
13.9
$
15.4
(9.7
)%
Product and distribution costs
11.6
15.5
(25.2
)
Store operating expenses
—
0.1
nm
Other operating expenses
3.4
5.2
(34.6
)
Depreciation and amortization expenses
39.5
37.3
5.9
General and administrative expenses
288.8
267.4
8.0
Restructuring and impairments
—
(0.9
)
nm
Total operating expenses
343.3
324.6
5.8
Operating loss
$
(329.4
)
$
(309.2
)
6.5
%
Year
Ended
Net revenues
66.2
66.3
(0.2
)
Product and distribution costs
63.3
67.3
(5.9
)
Store operating expenses
—
0.3
nm
Other operating expenses
14.0
18.6
(24.7
)
Depreciation and amortization expenses
149.7
156.7
(4.5
)
General and administrative expenses
1,121.7
1,170.8
(4.2
)
Restructuring and impairments
22.3
19.7
13.2
Total operating expenses
1,371.0
1,433.4
(4.4
)
Operating loss
$
(1,304.8
)
$
(1,367.1
)
(4.6
)%
Corporate and Other primarily consists of our unallocated
corporate operating expenses and Evolution Fresh.
STARBUCKS CORPORATION
CONSOLIDATED BALANCE
SHEETS
(unaudited, in millions, except
per share data)
Sep 27, 2020
Sep 29, 2019
ASSETS
Current assets:
Cash and cash equivalents
$
4,350.9
$
2,686.6
Short-term investments
281.2
70.5
Accounts receivable, net
883.4
879.2
Inventories
1,551.4
1,529.4
Prepaid expenses and other current
assets
739.5
488.2
Total current assets
7,806.4
5,653.9
Long-term investments
206.1
220.0
Equity investments
478.7
396.0
Property, plant and equipment, net
6,241.4
6,431.7
Operating lease, right-of-use asset
8,134.1
—
Deferred income taxes, net
1,789.9
1,765.8
Other long-term assets
568.6
479.6
Other intangible assets
552.1
781.8
Goodwill
3,597.2
3,490.8
TOTAL ASSETS
$
29,374.5
$
19,219.6
LIABILITIES AND SHAREHOLDERS'
EQUITY/(DEFICIT)
Current liabilities:
Accounts payable
$
997.9
$
1,189.7
Accrued liabilities
1,160.7
1,753.7
Accrued payroll and benefits
696.0
664.6
Income taxes payable
98.2
1,291.7
Current portion of operating lease
liability
1,248.8
—
Stored value card liability and current
portion of deferred revenue
1,456.5
1,269.0
Short-term debt
438.8
—
Current portion of long-term debt
1,249.9
—
Total current liabilities
7,346.8
6,168.7
Long-term debt
14,659.6
11,167.0
Operating lease liability
7,661.7
—
Deferred revenue
6,598.5
6,744.4
Other long-term liabilities
907.3
1,370.5
Total liabilities
37,173.9
25,450.6
Shareholders’ deficit:
Common stock ($0.001 par value) —
authorized, 2,400.0 shares; issued and outstanding, 1,173.3 and
1,184.6 shares, respectively
1.2
1.2
Additional paid-in capital
373.9
41.1
Retained deficit
(7,815.6
)
(5,771.2
)
Accumulated other comprehensive loss
(364.6
)
(503.3
)
Total shareholders’ deficit
(7,805.1
)
(6,232.2
)
Noncontrolling interests
5.7
1.2
Total deficit
(7,799.4
)
(6,231.0
)
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY/(DEFICIT)
$
29,374.5
$
19,219.6
STARBUCKS CORPORATION
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(unaudited and in millions)
Year Ended
Sep 27, 2020
Sep 29, 2019
Sep 30, 2018
OPERATING ACTIVITIES:
Net earnings including noncontrolling
interests
$
924.7
$
3,594.6
$
4,518.0
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization
1,503.2
1,449.3
1,305.9
Deferred income taxes, net
(25.8
)
(1,495.4
)
714.9
Income earned from equity method
investees
(280.7
)
(250.6
)
(242.8
)
Distributions received from equity method
investees
227.7
216.8
226.8
Gain resulting from acquisition of joint
venture
—
—
(1,376.4
)
Net gain resulting from divestiture of
certain retail operations
—
(622.8
)
(499.2
)
Stock-based compensation
248.6
308.0
250.3
Goodwill impairments
—
10.5
37.6
Non-cash lease costs
1,197.6
—
—
Loss on retirement and impairment of
assets
454.4
142.6
75.6
Other
24.5
45.3
13.4
Cash provided by/(used in) changes in
operating assets and liabilities:
Accounts receivable
(2.7
)
(197.7
)
131.0
Inventories
(10.9
)
(173.0
)
(41.2
)
Prepaid expenses and other current
assets
(317.5
)
922.0
(839.5
)
Income taxes payable
(1,214.6
)
1,237.1
146.0
Accounts payable
(210.8
)
31.9
391.6
Deferred revenue
31.0
(30.5
)
7,109.4
Operating lease liability
(1,231.4
)
—
—
Other operating assets and liabilities
280.5
(141.1
)
16.4
Net cash provided by operating
activities
1,597.8
5,047.0
11,937.8
INVESTING ACTIVITIES:
Purchases of investments
(443.9
)
(190.4
)
(191.9
)
Sales of investments
186.7
298.3
459.0
Maturities and calls of investments
73.7
59.8
45.3
Acquisitions, net of cash acquired
—
—
(1,311.3
)
Additions to property, plant and
equipment
(1,483.6
)
(1,806.6
)
(1,976.4
)
Net proceeds from the divestiture of
certain operations
—
684.3
608.2
Other
(44.4
)
(56.2
)
5.6
Net cash used in investing activities
(1,711.5
)
(1,010.8
)
(2,361.5
)
FINANCING ACTIVITIES:
Proceeds from issuance of short-term
debt
1,406.6
—
—
Repayments of short-term debt
(967.7
)
—
—
Proceeds from issuance of long-term
debt
4,727.6
1,996.0
5,584.1
Repayments of long-term debt
—
(350.0
)
—
Proceeds from issuance of common stock
298.8
409.8
153.9
Cash dividends paid
(1,923.5
)
(1,761.3
)
(1,743.4
)
Repurchase of common stock
(1,698.9
)
(10,222.3
)
(7,133.5
)
Minimum tax withholdings on share-based
awards
(91.9
)
(111.6
)
(62.7
)
Other
(37.7
)
(17.5
)
(41.2
)
Net cash provided by/(used in) financing
activities
1,713.3
(10,056.9
)
(3,242.8
)
Effect of exchange rate changes on cash
and cash equivalents
64.7
(49.0
)
(39.5
)
Net increase/(decrease) in cash and cash
equivalents
1,664.3
(6,069.7
)
6,294.0
CASH AND CASH EQUIVALENTS:
Beginning of period
2,686.6
8,756.3
2,462.3
End of period
$
4,350.9
$
2,686.6
$
8,756.3
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the period for:
Interest, net of capitalized interest
$
396.9
$
299.5
$
137.1
Income taxes
$
1,699.1
$
470.1
$
1,176.9
Supplemental
Information
The following supplemental information is provided for
historical and comparative purposes.
U.S. Supplemental Data
Quarter Ended
($ in millions)
Sep 27, 2020
Sep 29, 2019
Change (%)
Revenues
$3,892.9
$4,245.9
(8)%
Comparable Store Sales Growth (1)
(9)%
6%
Change in Transactions
(25)%
3%
Change in Ticket
21%
3%
Store Count
15,337
15,049
2%
(1)
Includes only Starbucks® company-operated
stores open 13 months or longer. The results from Siren Retail
operations are not reflected in comparable store sales. Comparable
store sales include stores that were temporarily closed as a result
of the COVID-19 outbreak and exclude stores identified for
permanent closure.
China Supplemental Data
Quarter Ended
($ in millions)
Sep 27, 2020
Sep 29, 2019
Change (%)
Revenues
$814.5
$763.0
7%
Comparable Store Sales Growth (1)
(3)%
5%
Change in Transactions
(7)%
2%
Change in Ticket
5%
3%
Store Count
4,706
4,125
14%
(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, stores
identified for permanent closure and Siren Retail stores.
Comparable store sales include stores that were temporarily closed
as a result of the COVID-19 outbreak, and for the fourth quarter of
fiscal 2020, include a 4% benefit related to a temporary
value-added tax exemption.
Store Data
Net stores opened/(closed) and
transferred during the period
Quarter Ended
Year Ended
Stores open as of
Sep 27, 2020
Sep 29, 2019
Sep 27, 2020
Sep 29, 2019
Sep 27, 2020
Sep 29, 2019
Americas:
Company-operated stores
92
117
135
284
10,109
9,974
Licensed stores
27
97
152
323
8,245
8,093
Total Americas
119
214
287
607
18,354
18,067
International:
Company-operated stores
274
214
668
209
6,528
5,860
Licensed stores
87
202
449
1,128
7,778
7,329
Total International
361
416
1,117
1,337
14,306
13,189
Corporate and Other(1):
Licensed stores
—
—
—
(12
)
—
—
Total Corporate and Other
—
—
—
(12
)
—
—
Total Company
480
630
1,404
1,932
32,660
31,256
(1) Corporate and Other store data
includes the closure of 12 Teavana® retail stores in the first
quarter of fiscal 2019.
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 G&A, non-GAAP operating income, non-GAAP
operating income growth, non-GAAP operating margin, non-GAAP
effective tax rate and non-GAAP EPS 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
EPS are general and administrative expenses, operating income,
operating income growth, operating margin, effective tax rate and
diluted net EPS, respectively.
Non-GAAP Exclusion
Rationale
Gain on sale of certain retail
operations
Management excludes the gains related to
the sale of our retail operations in Thailand, France and the
Netherlands as these items do not reflect future gains or tax
impacts for reasons discussed above.
Restructuring and impairment costs
Management excludes restructuring and
impairment costs relating to the write-down of certain
company-operated stores and intangible assets. Management excludes
these items 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 and amortization of the acquired intangible
assets for reasons discussed above. Additionally, the majority of
these costs will be recognized over a finite period of time.
2018 U.S. stock award
Management excludes the incremental
stock-based compensation award granted in the third quarter of
fiscal 2018, and vested in the third quarter of fiscal 2019, for
reasons discussed above.
Nestlé transaction and integration-related
costs
Management excludes the transaction and
integration-related costs related to the Global Coffee Alliance
with Nestlé (inclusive of incremental costs to grow and develop the
alliance) for reasons discussed above.
Other tax matters
On December 22, 2017, the Tax Cuts and Jobs Act was signed into
U.S. law. Management excludes the estimated transition tax on
undistributed foreign earnings, the impacts of estimated
incremental foreign withholding taxes on expected repatriated
earnings and the re–measurement of deferred tax assets and
liabilities due to the reduction of the U.S. federal corporate
income tax rate 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 EPS 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.
Certain non-GAAP measures included in this report were not
reconciled to the comparable GAAP financial measures because the
GAAP measures are not accessible on a forward-looking basis. The
company is unable to reconcile these forward-looking non-GAAP
financial measures to the most directly comparable GAAP measures
without unreasonable efforts because the company is currently
unable to predict with a reasonable degree of certainty the type
and extent of certain items that would be expected to impact GAAP
measures for these periods but would not impact the non-GAAP
measures. Such items may include acquisitions, divestitures,
restructuring and other items. The unavailable information could
have a significant impact on the company’s GAAP financial
results.
STARBUCKS CORPORATION
RECONCILIATION OF SELECTED
GAAP MEASURES TO NON-GAAP MEASURES
(unaudited)
($ in millions)
Quarter Ended
Consolidated
Sep 27, 2020
Sep 29, 2019
Change
General and administrative expenses, as
reported (GAAP)
$
439.0
$
458.4
(4.2
)%
Restructuring and impairment costs (1)
(0.6
)
0.2
International transaction and
integration-related items (2)
(5.6
)
(8.0
)
Nestlé transaction and integration-related
costs (3)
—
0.1
Non-GAAP G&A
$
432.8
$
450.7
(4.0
)%
Non-GAAP G&A as a % of total net
revenues (4)
7.0
%
6.7
%
Operating income, as reported (GAAP)
$
558.3
$
1,083.3
(48.5
)%
Restructuring and impairment costs (1)
195.5
12.8
International transaction and
integration-related items (2)
64.0
64.5
Nestlé transaction and integration-related
costs (3)
—
0.1
Non-GAAP operating income
$
817.8
$
1,160.7
(29.5
)%
Operating margin, as reported (GAAP)
9.0
%
16.1
%
(710) bps
Restructuring and impairment costs (1)
3.2
0.2
International transaction and
integration-related items (2)
1.0
0.9
Nestlé transaction and integration-related
costs (3)
—
—
Non-GAAP operating margin
13.2
%
17.2
%
(400) bps
Diluted net earnings per share, as
reported (GAAP)
$
0.33
$
0.67
(50.7
)%
Restructuring and impairment costs (1)
0.18
0.01
International transaction and
integration-related items (2)
0.05
0.05
Nestlé transaction and integration-related
costs (3)
—
—
Income tax effect on Non-GAAP adjustments
(5)
(0.05
)
(0.03
)
Non-GAAP EPS
$
0.51
$
0.70
(27.1
)%
(1)
Represents costs associated with our
restructuring efforts, primarily severance and asset impairments
related to certain company-operated store closures.
(2)
Includes transaction costs for the
acquisition of our East China joint venture; ongoing amortization
expense of acquired intangible assets associated with the
acquisition of East China and Starbucks Japan; and the related
post-acquisition integration costs, such as incremental information
technology and compensation-related costs.
(3)
Represents costs associated with the
Global Coffee Alliance with Nestlé.
(4)
Non-GAAP G&A as a percentage of total
net revenues for the fourth quarter of fiscal 2020 was 7.0%.
Non-GAAP G&A as a percentage of total net revenues for fiscal
years 2019 and 2018 was 6.5% and 6.4%, respectively. Refer to the
Starbucks Investor Relations website for additional information
regarding historical non-GAAP information.
(5)
Adjustments were determined based on the
nature of the underlying items and their relevant jurisdictional
tax rates.
Q4 QTD FY20 NON-GAAP DISCLOSURE DETAILS
(Pretax $ in millions and
USD)
Q4 QTD FY20
Americas
International
Channel Development
Corporate and Other
Consolidated
Statement of Earnings Line Item
Restructuring, Impairment and
Optimization Costs
International Transaction and
Integration Costs
Restructuring, Impairment and
Optimization Costs
Nestlé Transaction and
Integration- Related Costs
International Transaction and
Integration Costs
Nestlé Transaction and
Integration- Related Costs
Restructuring, Impairment
& Optimization Costs
Total Non-GAAP
Adjustment
Net revenue
Production and distribution costs
—
Store operating expenses
4.4
4.4
Other operating expenses
—
—
Depreciation and amortization expenses
53.9
53.9
General and administrative expenses
5.6
0.5
—
—
0.1
6.2
Restructuring and impairments
195.6
(0.6
)
—
195.0
Income from equity investees
—
Total impact to operating income
(195.6
)
(63.9
)
0.1
—
—
—
(0.1
)
(259.5
)
STARBUCKS CORPORATION
RECONCILIATION OF SELECTED
GAAP MEASURES TO NON-GAAP MEASURES
(unaudited)
($ in millions)
Year Ended
Consolidated
Sep 27, 2020
Sep 29, 2019
Change
General and administrative expenses, as
reported (GAAP)
$
1,679.6
$
1,824.1
(7.9
)%
Restructuring and impairment costs (1)
(1.9
)
(9.3
)
International transaction and
integration-related items (2)
(13.8
)
(29.7
)
2018 U.S. stock award (3)
—
(61.3
)
Nestlé transaction and integration-related
costs (4)
(0.5
)
(1.8
)
Non-GAAP G&A
$
1,663.4
$
1,722.0
(3.4
)%
Non-GAAP G&A as a % of total net
revenues (5)
7.1
%
6.5
%
Operating income, as reported (GAAP)
$
1,561.7
$
4,077.9
(61.7
)%
Restructuring and impairment costs (1)
280.6
146.2
International transaction and
integration-related items (2)
243.5
262.0
2018 U.S. stock award (3)
—
61.3
Nestlé transaction and integration-related
costs (4)
47.4
12.6
Non-GAAP operating income
$
2,133.2
$
4,560.0
(53.2
)%
Operating margin, as reported (GAAP)
6.6
%
15.4
%
(880) bps
Restructuring and impairment costs (1)
1.2
0.6
International transaction and
integration-related items (2)
1.1
1.0
2018 U.S. stock award (3)
—
0.2
Nestlé transaction and integration-related
costs (4)
0.2
—
Non-GAAP operating margin
9.1
%
17.2
%
(810) bps
Diluted net earnings per share, as
reported (GAAP)
$
0.79
$
2.92
(72.9
)%
Gain on sale of certain retail
operations
—
(0.51
)
Restructuring and impairment costs (1)
0.23
0.12
International transaction and
integration-related items (2)
0.21
0.21
2018 U.S. stock award (3)
—
0.05
Nestlé transaction and integration-related
costs (4)
0.04
0.01
Other tax matters (6)
—
0.06
Income tax effect on Non-GAAP adjustments
(7)
(0.10
)
(0.03
)
Non-GAAP EPS
$
1.17
$
2.83
(58.7
)%
(1)
Represents costs associated with our
restructuring efforts, primarily severance and asset impairments
related to certain company-operated store closures and impairment
of an intangible asset.
(2)
Includes transaction costs for the
acquisition of our East China joint venture; ongoing amortization
expense of acquired intangible assets associated with the
acquisition of East China and Starbucks Japan; and the related
post-acquisition integration costs, such as incremental information
technology and compensation-related costs.
(3)
Represents incremental stock-based
compensation award for U.S. partners (employees).
(4)
Represents costs associated with the
Global Coffee Alliance with Nestlé.
(5)
Non-GAAP G&A as a percentage of total
net revenues for fiscal years 2020, 2019 and 2018 was 7.1%, 6.5%
and 6.4%, respectively. Refer to the Starbucks Investor Relations
website for additional information regarding historical non-GAAP
information.
(6)
Represents the estimated impact of the
U.S. Tax Cuts and Jobs Act, specifically the transition tax on
undistributed foreign earnings, estimated incremental foreign
withholding taxes on expected repatriated earnings and the
re-measurement of deferred taxes.
(7)
Adjustments were determined based on the
nature of the underlying items and their relevant jurisdictional
tax rates.
YTD FY20 NON-GAAP DISCLOSURE
DETAILS
(Pretax $ in millions and
USD)
Q4 YTD FY20
Americas
International
Channel Development
Corporate and Other
Consolidated
Statement of Earnings Line Item
Restructuring, Impairment and
Optimization Costs
International Transaction and
Integration Costs
Restructuring, Impairment and
Optimization Costs
Nestlé Transaction and
Integration- Related Costs
International Transaction and
Integration Costs
Nestlé Transaction and
Integration- Related Costs
Restructuring, Impairment
& Optimization Costs
Total Non-GAAP
Adjustment
Net revenue
Production and distribution costs
—
Store operating expenses
16.2
16.2
Other operating expenses
46.9
46.9
Depreciation and amortization expenses
213.5
213.5
General and administrative expenses
13.2
1.7
0.6
0.5
0.2
16.2
Restructuring and impairments
257.6
(1.2
)
22.3
278.7
Income from equity investees
—
Total impact to operating income
(257.6
)
(242.9
)
(0.5
)
(46.9
)
(0.6
)
(0.5
)
(22.5
)
(571.5
)
STARBUCKS CORPORATION
RECONCILIATION OF SELECTED
GAAP MEASURES TO NON-GAAP MEASURES
(unaudited)
Quarter Ended
Year Ended
Consolidated
Dec 27, 2020
Oct 3, 2021
(Projected
13-weeks)
(Projected
53-weeks)
Operating Margin (GAAP)
14 - 15%
Restructuring costs (1)
1%
International transaction and
integration-related items (2)
1%
Non-GAAP Operating Margin
16 - 17%
Diluted net earnings per share (GAAP)
$ 0.32 - 0.37
$ 2.34 - 2.54
Restructuring costs (1)
0.19
0.27
International transaction and
integration-related items (2)
0.05
0.19
Income tax effect on Non-GAAP adjustments
(3)
(0.06)
(0.10)
Non-GAAP earnings per share
$ 0.50 - 0.55
$ 2.70 - 2.90
(1)
Represents costs associated with our
restructuring efforts in the U.S. and Canada company-operated
businesses.
(2)
Includes transaction costs for the
acquisition of our East China joint venture; ongoing amortization
expense of acquired intangible assets associated with the
acquisition of East China and Starbucks Japan; and the related
post-acquisition integration costs, such as incremental information
technology and compensation-related costs.
(3)
Adjustments were determined based on the
nature of the underlying items and their relevant jurisdictional
tax rates.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201029006207/en/
Starbucks Contact, Investor Relations: Durga Doraisamy
206-318-7118 investorrelations@starbucks.com
Starbucks Contact, Media: Reggie Borges 206-318-7100
press@starbucks.com
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