Starbucks Reports Record Q2 FY17 Revenues and EPS
Q2 Comp Store Sales Up 3% Globally, Up 3% in U.S. and Up 7% in China
U.S. Comp Store Sales Accelerate Sequentially Through Q2; Reach 4% in March and Accelerate Further in April
Consolidated Net Revenues Grow 6% to Q2 Record $5.3 Billion; Operating Margin Expands to Q2 Record 17.7%
GAAP and Non-GAAP Earnings Per Share Up 15% to Q2 Record $0.45
Starbucks Corporation (NASDAQ: SBUX) today reported financial results for its 13-week fiscal second quarter and 26-week fiscal
year to date ended April 2, 2017. Fiscal 2017 and fiscal 2016 GAAP results include items which 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.
Q2 Fiscal 2017 Highlights:
- Global comparable store sales increased 3%
- Americas comp store sales increased 3%
- U.S. comp store sales increased 3% comprised of a 4% increase in average ticket and a 2%
decrease in transactions. Adjusting for the estimated impact of order consolidation related to the new Starbucks
RewardsTM loyalty program, average ticket grew 3% with transactions flat to prior year.
- CAP comp store sales increased 3%
- China comp store sales increased 7% driven by a 6% increase in transactions
- Consolidated net revenues grew 6% to a Q2 record $5.3 billion
- Consolidated operating income increased 8% to a Q2 record $935 million
- Consolidated operating margin expanded 40 basis points to a Q2 record 17.7%
- GAAP and non-GAAP earnings per share grew 15% to a Q2 record $0.45 per share
- Active U.S. membership in Starbucks Rewards grew 11% year-over-year to 13.3 million members
- Starbucks Rewards represented 36% of U.S. company-operated sales in the quarter, with Mobile Payment
reaching 29% of transactions and Mobile Order and Pay growing to 8% of transactions
- Total stores reached 26,161 in 75 countries globally, with the opening of 427 net new stores in the
quarter
“With our U.S. business accelerating throughout the quarter and strong performance in China, we are poised to deliver strong
revenue growth in the second half and into the future,” said Kevin Johnson, Starbucks president and ceo. “Our success in
opening over 2,000 stores around the world annually, delivering record AUV and profit, despite a very difficult period for many
brick-and-mortar retailers is a testament to the 330,000 partners who proudly wear the green apron.”
“Starbucks U.S. comp sales accelerated sequentially through the quarter - culminating with a 4% U.S. comp in March - and we’re
seeing further acceleration into April," said Scott Maw, Starbucks cfo. “Investments we are making to increase throughput and
further premiumize the Starbucks brand are paying off. And increased capacity combined with accelerating momentum and the beverage,
food and technology innovation we will be introducing in the months ahead gives us great confidence in our ability to deliver
strong comp sales and revenue growth in the back half of fiscal 2017.”
“Starbucks Roasteries under design or construction in the iconic, global cities of Shanghai, New York, Tokyo, Milan and Chicago
will join our Seattle Roastery in delivering an immersive, ultra-premium, coffee-forward experience like none other anywhere in the
world - further elevating the Starbucks brand, enhancing our customer experience and extending our global leadership around
all-things-coffee,” said Howard Schultz, Starbucks executive chairman. “Together our Roasteries, Reserve stores and Reserve bars
will broaden - and deepen - the enduring emotional connection that exists between our customers and the Starbucks brand
everywhere.”
|
Second Quarter Fiscal 2017 Summary
|
|
|
|
|
|
Quarter Ended Apr 2, 2017 |
| Comparable Store Sales (1) |
|
Sales Growth |
|
Change in Transactions |
|
Change in Ticket |
| Consolidated |
|
3% |
|
(1)% |
|
4% |
| Americas |
|
3% |
|
(1)% |
|
4% |
| CAP |
|
3% |
|
1% |
|
1% |
| EMEA |
|
(1)% |
|
0% |
|
(1)% |
| (1) |
|
Includes only Starbucks company-operated stores open 13 months or longer. Comparable
store sales exclude the effect of fluctuations in foreign currency exchange rates. |
|
|
|
|
|
| Operating Results |
|
Quarter Ended |
|
Change |
| ($ in millions, except per share amounts) |
|
Apr 2, 2017 |
|
Mar 27, 2016 |
|
| Net New Stores |
|
427 |
|
350 |
|
77 |
| Revenues |
|
$5,294.0 |
|
$4,993.2 |
|
6% |
| Operating Income |
|
$935.4 |
|
$864.2 |
|
8% |
| Operating Margin |
|
17.7% |
|
17.3% |
|
40 bps |
| EPS |
|
$0.45 |
|
$0.39 |
|
15% |
Consolidated net revenues were $5.3 billion in Q2 FY17, an increase of 6% over Q2 FY16. The increase was primarily driven by
incremental revenues from the opening of 2,240 net new stores over the past 12 months and 3% growth in global comparable store
sales.
Consolidated operating income grew 8% to $935.4 million in Q2 FY17, up from $864.2 million in Q2 FY16. Consolidated operating
margin expanded 40 basis points to 17.7% primarily due to sales leverage and was partially offset by higher investments in our
store partners (employees), primarily in the Americas segment.
|
Q2 Americas Segment Results
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
Change |
| ($ in millions) |
|
Apr 2, 2017 |
|
Mar 27, 2016 |
|
| Net New Stores |
|
200 |
|
132 |
|
68 |
| Revenues |
|
$3,720.4 |
|
$3,455.6 |
|
8% |
| Operating Income |
|
$826.1 |
|
$812.0 |
|
2% |
| Operating Margin |
|
22.2% |
|
23.5% |
|
(130) bps |
Net revenues for the Americas segment were $3.7 billion in Q2 FY17, an increase of 8% over Q2 FY16. The increase was driven by
incremental revenues from 952 net new store openings over the past 12 months and 3% growth in comparable store sales.
Operating income of $826.1 million in Q2 FY17 grew 2% versus $812.0 million in Q2 FY16. Operating margin of 22.2% declined 130
basis points primarily due to higher investments in our store partners (employees) and the impact of product sales mix. These
decreases were partially offset by sales leverage.
|
Q2 China/Asia Pacific Segment Results
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
Change |
| ($ in millions) |
|
Apr 2, 2017 |
|
Mar 27, 2016 |
|
| Net New Stores |
|
187 |
|
175 |
|
12 |
| Revenues |
|
$768.9 |
|
$677.9 |
|
13% |
| Operating Income |
|
$175.9 |
|
$129.3 |
|
36% |
| Operating Margin |
|
22.9% |
|
19.1% |
|
380 bps |
Net revenues for the China/Asia Pacific segment grew 13% over Q2 FY16 to $768.9 million in Q2 FY17. The increase was primarily
driven by incremental revenues from 1,015 net new store openings over the past 12 months and 3% growth in comparable store
sales.
Q2 FY17 operating income of $175.9 million grew 36% over Q2 FY16 operating income of $129.3 million. Operating margin expanded
380 basis points to 22.9% primarily driven by the transition to China's value added tax structure in Q3 FY16 and sales
leverage.
|
Q2 EMEA Segment Results
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
Change |
| ($ in millions) |
|
Apr 2, 2017 |
|
Mar 27, 2016 |
|
| Net New Stores |
|
46 |
|
47 |
|
(1) |
| Revenues |
|
$231.7 |
|
$268.3 |
|
(14)% |
| Operating Income |
|
$27.7 |
|
$27.6 |
|
0% |
| Operating Margin |
|
12.0% |
|
10.3% |
|
170 bps |
Net revenues for the EMEA segment were $231.7 million in Q2 FY17, a 14% decrease versus Q2 FY16. The decrease was primarily
driven by the absence of revenue related to the sale of our Germany retail operations in Q3 FY16 as part of the ongoing shift to
more licensed stores in the region as well as unfavorable foreign currency translation. Partially offsetting these decreases were
incremental revenues from the opening of 304 net new licensed stores over the past 12 months.
Operating income of $27.7 million in Q2 FY17 was nearly flat to operating income of $27.6 million in Q2 FY16. Operating margin
expanded 170 basis points to 12.0% primarily due to sales leverage driven by the shift in the portfolio towards more licensed
stores, primarily related to the sale of our Germany retail operations in Q3 FY16. Partially offsetting the margin expansion was
unfavorable foreign currency exchange and sales deleverage in certain company-operated stores.
|
Q2 Channel Development Segment Results
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
Change |
| ($ in millions) |
|
Apr 2, 2017 |
|
Mar 27, 2016 |
|
| Revenues |
|
$461.3 |
|
$461.2 |
|
0% |
| Operating Income |
|
$193.6 |
|
$182.0 |
|
6% |
| Operating Margin |
|
42.0% |
|
39.5% |
|
250 bps |
Net revenues for the Channel Development segment of $461.3 million in Q2 FY17 were flat to Q2 FY16. Increased sales of packaged
coffee as well as higher international and foodservice sales were offset by an unfavorable revenue deduction adjustment pertaining
to prior periods of $20.6 million, an immaterial amount of which pertained to Q2 FY16. When excluding this adjustment, revenue
growth was approximately 5%.
Operating income of $193.6 million in Q2 FY17 increased 6% compared to Q2 FY16. Operating margin expanded 250 basis points to
42.0% primarily driven by lower coffee costs and leverage on cost of sales as well as higher income from the North American Coffee
Partnership. The margin expansion was partially offset by the unfavorable revenue deduction adjustment noted above.
|
Q2 All Other Segments Results
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
Change |
| ($ in millions) |
|
Apr 2, 2017 |
|
Mar 27, 2016 |
|
| Net New Stores |
|
(6) |
|
(4) |
|
(2) |
| Revenues |
|
$111.7 |
|
$130.2 |
|
(14)% |
| Operating Loss |
|
$(25.5) |
|
$(19.2) |
|
33% |
| |
|
Year to Date Financial Results
|
|
|
|
|
|
|
|
|
|
Two Quarters Ended |
| Comparable Store Sales (1) |
|
Sales Growth |
|
Change in Transactions |
|
Change in Ticket |
| Consolidated |
|
3% |
|
(1)% |
|
4% |
| Americas |
|
3% |
|
(1)% |
|
4% |
| CAP |
|
4% |
|
2% |
|
2% |
| EMEA |
|
(1)% |
|
(1)% |
|
0% |
| (1) |
|
Includes only Starbucks company-operated stores open 13 months or longer. Comparable
store sales exclude the effect of fluctuations in foreign currency exchange rates. |
|
|
|
|
|
|
|
| Operating Results |
|
Two Quarters Ended |
|
Change |
| ($ in millions, except per share amounts) |
|
Apr 2, 2017 |
|
Mar 27, 2016 |
|
| Net New Stores |
|
1,076 |
|
878 |
|
198 |
| Revenues |
|
$11,027.0 |
|
$10,366.8 |
|
6% |
| Operating Income |
|
$2,068.3 |
|
$1,922.3 |
|
8% |
| Operating Margin |
|
18.8% |
|
18.5% |
|
30 bps |
| EPS |
|
$0.96 |
|
$0.84 |
|
14% |
|
|
|
|
|
|
|
Targets
The company's earnings press release will no longer contain forward looking targets. The company will continue its practice of
providing detail regarding its business outlook during its regularly scheduled quarterly earnings conference calls.
Company Updates
- Starbucks held its 2017 Annual Meeting of Shareholders on March 22. The company reiterated its intent
to open 12,000 new stores globally and 3,400 net new stores in the U.S. by Fiscal 2021. In addition, Starbucks shareholders
elected Rosalind Brewer, former President and Chief Executive Officer of Sam's Club; Jørgen Vig Knudstorp, Executive Chairman of
the LEGO Brand Group; and Satya Nadella, CEO of Microsoft Corporation, to the Starbucks Board of Directors, along with returning
directors.
- In February, the company announced its fifth Starbucks Reserve™ Roastery location on Piazza Cordusio
in Milan, Italy. Set to open in late 2018, the Milan Roastery will be the first Starbucks Reserve Roastery to open in the Europe,
Middle East and Africa region.
- In April, Starbucks announced plans to open its sixth Roastery in an iconic building on Chicago’s
Magnificent Mile in 2019, and confirmed one of the first Starbucks Reserve® stores will be on the West Loop, opening
in 2018. In addition to new store experiences, Starbucks launched the new Mercato lunch menu earlier this month, which includes a
selection of grab-and-go salads, hearty sandwiches and sides, in more than 100 Starbucks stores in downtown Chicago.
- Starbucks announced the offering of a critical illness insurance plan for the parents of its eligible
full-time partners (employees) in company-operated stores across Mainland China beginning June 1. This industry-leading
investment will benefit over 10,000 parents of its Chinese partners.
- In February, Starbucks launched a new social gifting feature in partnership with China’s leading
mobile social communications service, Weixin. “用星说” (Say it with Starbucks) is a pioneering online-to-offline social gifting
innovation that enables users to instantly gift a Starbucks beverage or digital gift card. Starbucks is the first retail brand to
bring a locally-relevant social gifting experience in China.
- The company announced that it had closed an underwritten public offering of senior notes, comprising
the first global yen-denominated Corporate Sustainability Bond issued in the Japanese market. The company will use the net
proceeds from the offering of 85 billion Japanese Yen in 0.372% Senior Notes due 2024 to enhance its sustainability programs
around coffee supply chain management through Eligible Sustainability Projects.
- The company repurchased 11.3 million shares of common stock in Q2 FY17; 99 million shares remain
available for purchase under current authorizations.
- The Board of Directors declared a cash dividend of $0.25 per share, payable on May 26, 2017 to
shareholders of record as May 11, 2017.
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;
Belinda Wong, ceo, Starbucks China; Scott Maw, cfo; and Howard Schultz, executive chairman. 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 Saturday, May 27,
2017.
About Starbucks
Since 1971, Starbucks Coffee Company has been committed to ethically sourcing and roasting high-quality arabica coffee.
Today, with stores around the globe, the company is the premier roaster and retailer of specialty coffee in the world. Through our
unwavering commitment to excellence and our guiding principles, we bring the unique Starbucks Experience to life for every
customer through every cup. To share in the experience, please visit us in our stores or online at news.starbucks.com or www.starbucks.com.
Forward-Looking Statements
This release contains forward-looking statements relating to certain company initiatives, strategies and plans, as well as
trends in or expectations regarding our diversified business model, the strength, resilience, momentum and potential of our
business, operations and brand, our customer base, our innovation, growth and growth opportunities and related investments, our
Starbucks Reserve® Roasteries and Starbucks Reserve® stores, return to shareholders, our strategic, operational and digital moves,
revenues, operating margins, comparable store sales and transactions and net new stores and their performance. 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, fluctuations in U.S. and international economies and currencies, our ability to preserve, grow and
leverage our brands, potential negative effects of incidents involving food or beverage-borne illnesses, tampering, 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 Starbucks Japan, the acceptance of the company’s products by our
customers, the impact of competition, coffee, dairy and other raw materials prices and availability, 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, 2016. 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 |
|
|
Apr 2,
2017 |
|
Mar 27,
2016 |
|
%
Change
|
|
Apr 2,
2017 |
|
Mar 27,
2016 |
|
|
|
|
|
|
|
|
|
As a % of total
net revenues |
| Net revenues: |
|
|
|
|
|
|
|
|
|
|
| Company-operated stores |
|
$ |
4,195.4 |
|
|
$ |
3,944.2 |
|
|
6.4 |
% |
|
79.2 |
% |
|
79.0 |
% |
| Licensed stores |
|
546.7 |
|
|
493.1 |
|
|
10.9 |
|
|
10.3 |
|
|
9.9 |
|
| CPG, foodservice and other(1) |
|
551.9 |
|
|
555.9 |
|
|
(0.7 |
) |
|
10.4 |
|
|
11.1 |
|
| Total net revenues |
|
5,294.0 |
|
|
4,993.2 |
|
|
6.0 |
|
|
100.0 |
|
|
100.0 |
|
| Cost of sales including occupancy costs |
|
2,141.2 |
|
|
2,010.3 |
|
|
6.5 |
|
|
40.4 |
|
|
40.3 |
|
| Store operating expenses |
|
1,586.4 |
|
|
1,466.4 |
|
|
8.2 |
|
|
30.0 |
|
|
29.4 |
|
| Other operating expenses |
|
134.7 |
|
|
139.6 |
|
|
(3.5 |
) |
|
2.5 |
|
|
2.8 |
|
| Depreciation and amortization expenses |
|
253.6 |
|
|
247.8 |
|
|
2.3 |
|
|
4.8 |
|
|
5.0 |
|
| General and administrative expenses |
|
326.8 |
|
|
330.5 |
|
|
(1.1 |
) |
|
6.2 |
|
|
6.6 |
|
| Total operating expenses |
|
4,442.7 |
|
|
4,194.6 |
|
|
5.9 |
|
|
83.9 |
|
|
84.0 |
|
| Income from equity investees |
|
84.1 |
|
|
65.6 |
|
|
28.2 |
|
|
1.6 |
|
|
1.3 |
|
| Operating income |
|
935.4 |
|
|
864.2 |
|
|
8.2 |
|
|
17.7 |
|
|
17.3 |
|
| Interest income and other, net(2) |
|
67.9 |
|
|
14.5 |
|
|
368.3 |
|
|
1.3 |
|
|
0.3 |
|
| Interest expense |
|
(22.9 |
) |
|
(18.3 |
) |
|
25.1 |
|
|
(0.4 |
) |
|
(0.4 |
) |
| Earnings before income taxes |
|
980.4 |
|
|
860.4 |
|
|
13.9 |
|
|
18.5 |
|
|
17.2 |
|
| Income tax expense |
|
327.6 |
|
|
285.4 |
|
|
14.8 |
|
|
6.2 |
|
|
5.7 |
|
| Net earnings including noncontrolling interests |
|
652.8 |
|
|
575.0 |
|
|
13.5 |
|
|
12.3 |
|
|
11.5 |
|
| Net loss attributable to noncontrolling interests |
|
— |
|
|
(0.1 |
) |
|
(100.0 |
) |
|
— |
|
|
— |
|
| Net earnings attributable to Starbucks |
|
$ |
652.8 |
|
|
$ |
575.1 |
|
|
13.5 |
|
|
12.3 |
% |
|
11.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
| Net earnings per common share - diluted |
|
$ |
0.45 |
|
|
$ |
0.39 |
|
|
15.4 |
% |
|
|
|
|
| Weighted avg. shares outstanding - diluted |
|
1,464.8 |
|
|
1,486.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash dividends declared per share |
|
$ |
0.25 |
|
|
$ |
0.20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Supplemental Ratios: |
|
|
|
|
|
|
|
|
|
|
| Store operating expenses as a % of company-operated store revenues |
|
|
|
|
|
|
|
37.8 |
% |
|
37.2 |
% |
| Other operating expenses as a % of non-company-operated store revenues |
|
|
|
|
|
|
|
12.3 |
% |
|
13.3 |
% |
| Effective tax rate including noncontrolling interests |
|
|
|
|
|
|
|
33.4 |
% |
|
33.2 |
% |
| (1) |
|
CPG revenues in Q2 FY17 included an unfavorable revenue deduction adjustment pertaining to prior
periods of $20.6 million.
|
| (2) |
|
Included in interest income and other, net is the gain on the sale of our investment
in Square, Inc. warrants of $40.5 million in Q2 FY17. |
|
|
|
|
|
|
|
|
|
|
|
|
|
Two Quarters Ended |
|
Two Quarters Ended |
|
|
Apr 2,
2017 |
|
Mar 27,
2016 |
|
%
Change
|
|
Apr 2,
2017 |
|
Mar 27,
2016 |
|
|
|
|
|
|
|
|
|
As a % of total
net revenues |
| Net revenues: |
|
|
|
|
|
|
|
|
|
|
| Company-operated stores |
|
$ |
8,664.7 |
|
|
$ |
8,154.8 |
|
|
6.3 |
% |
|
78.6 |
% |
|
78.7 |
% |
| Licensed stores |
|
1,149.1 |
|
|
1,033.8 |
|
|
11.2 |
|
|
10.4 |
|
|
10.0 |
|
| CPG, foodservice and other(1) |
|
1,213.2 |
|
|
1,178.2 |
|
|
3.0 |
|
|
11.0 |
|
|
11.4 |
|
| Total net revenues |
|
11,027.0 |
|
|
10,366.8 |
|
|
6.4 |
|
|
100.0 |
|
|
100.0 |
|
| Cost of sales including occupancy costs |
|
4,436.2 |
|
|
4,196.5 |
|
|
5.7 |
|
|
40.2 |
|
|
40.5 |
|
| Store operating expenses |
|
3,224.6 |
|
|
2,972.6 |
|
|
8.5 |
|
|
29.2 |
|
|
28.7 |
|
| Other operating expenses |
|
280.1 |
|
|
285.8 |
|
|
(2.0 |
) |
|
2.5 |
|
|
2.8 |
|
| Depreciation and amortization expenses |
|
503.3 |
|
|
483.3 |
|
|
4.1 |
|
|
4.6 |
|
|
4.7 |
|
| General and administrative expenses |
|
683.1 |
|
|
636.0 |
|
|
7.4 |
|
|
6.2 |
|
|
6.1 |
|
| Total operating expenses |
|
9,127.3 |
|
|
8,574.2 |
|
|
6.5 |
|
|
82.8 |
|
|
82.7 |
|
| Income from equity investees |
|
168.6 |
|
|
129.7 |
|
|
30.0 |
|
|
1.5 |
|
|
1.3 |
|
| Operating income |
|
2,068.3 |
|
|
1,922.3 |
|
|
7.6 |
|
|
18.8 |
|
|
18.5 |
|
| Interest income and other, net(2) |
|
92.0 |
|
|
22.5 |
|
|
308.9 |
|
|
0.8 |
|
|
0.2 |
|
| Interest expense |
|
(46.7 |
) |
|
(34.8 |
) |
|
34.2 |
|
|
(0.4 |
) |
|
(0.3 |
) |
| Earnings before income taxes |
|
2,113.6 |
|
|
1,910.0 |
|
|
10.7 |
|
|
19.2 |
|
|
18.4 |
|
| Income tax expense |
|
709.0 |
|
|
647.4 |
|
|
9.5 |
|
|
6.4 |
|
|
6.2 |
|
| Net earnings including noncontrolling interests |
|
1,404.6 |
|
|
1,262.6 |
|
|
11.2 |
|
|
12.7 |
|
|
12.2 |
|
|
Net loss attributable to noncontrolling interests
|
|
|
(0.3
|
)
|
|
|
—
|
|
|
nm
|
|
|
—
|
|
|
—
|
|
| Net earnings attributable to Starbucks |
|
$ |
1,404.9 |
|
|
$ |
1,262.6 |
|
|
11.3 |
% |
|
12.7 |
% |
|
12.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
| Net earnings per common share - diluted |
|
$ |
0.96 |
|
|
$ |
0.84 |
|
|
14.3 |
% |
|
|
|
|
| Weighted avg. shares outstanding - diluted |
|
1,467.7 |
|
|
1,495.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash dividends declared per share |
|
$ |
0.50 |
|
|
$ |
0.40 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Supplemental Ratios: |
|
|
|
|
|
|
|
|
|
|
| Store operating expenses as a % of company-operated store revenues |
|
|
|
|
|
|
|
37.2 |
% |
|
36.5 |
% |
| Other operating expenses as a % of non-company-operated store revenues |
|
|
|
|
|
|
|
11.9 |
% |
|
12.9 |
% |
| Effective tax rate including noncontrolling interests |
|
|
|
|
|
|
|
33.5 |
% |
|
33.9 |
% |
| (1) |
|
CPG revenues in Q2 FY17 included an unfavorable revenue deduction adjustment pertaining to prior
periods of $20.6 million.
|
| (2) |
|
Included in interest income and other, net is the gain on the sale of our investment
in Square, Inc. warrants of $40.5 million in Q2 FY17. |
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Results (in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
|
|
|
|
|
|
|
|
|
|
|
Apr 2,
2017
|
|
Mar 27,
2016
|
|
%
Change
|
|
Apr 2,
2017
|
|
Mar 27,
2016
|
|
Quarter Ended
|
|
|
|
|
|
|
|
As a % of Americas
total net revenues
|
| Net revenues: |
|
|
|
|
|
|
|
|
|
|
| Company-operated stores |
|
$ |
3,334.9 |
|
|
$ |
3,097.5 |
|
|
7.7 |
% |
|
89.6 |
% |
|
89.6 |
% |
| Licensed stores |
|
376.7 |
|
|
351.8 |
|
|
7.1 |
|
|
10.1 |
|
|
10.2 |
|
| Foodservice and other |
|
8.8 |
|
|
6.3 |
|
|
39.7 |
|
|
0.2 |
|
|
0.2 |
|
| Total net revenues |
|
3,720.4 |
|
|
3,455.6 |
|
|
7.7 |
|
|
100.0 |
|
|
100.0 |
|
| Cost of sales including occupancy costs |
|
1,354.9 |
|
|
1,230.0 |
|
|
10.2 |
|
|
36.4 |
|
|
35.6 |
|
| Store operating expenses |
|
1,299.1 |
|
|
1,186.7 |
|
|
9.5 |
|
|
34.9 |
|
|
34.3 |
|
| Other operating expenses |
|
31.5 |
|
|
27.7 |
|
|
13.7 |
|
|
0.8 |
|
|
0.8 |
|
| Depreciation and amortization expenses |
|
155.4 |
|
|
151.7 |
|
|
2.4 |
|
|
4.2 |
|
|
4.4 |
|
| General and administrative expenses |
|
53.4 |
|
|
47.5 |
|
|
12.4 |
|
|
1.4 |
|
|
1.4 |
|
| Total operating expenses |
|
2,894.3 |
|
|
2,643.6 |
|
|
9.5 |
|
|
77.8 |
|
|
76.5 |
|
| Operating income |
|
$ |
826.1 |
|
|
$ |
812.0 |
|
|
1.7 |
% |
|
22.2 |
% |
|
23.5 |
% |
| Supplemental Ratios: |
|
|
|
|
|
|
|
|
|
|
| Store operating expenses as a % of company-operated store revenues |
|
|
|
|
|
|
|
39.0 |
% |
|
38.3 |
% |
| Other operating expenses as a % of non-company-operated store revenues |
|
|
|
|
|
|
|
8.2 |
% |
|
7.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Two Quarters Ended
|
|
|
|
|
|
|
|
|
|
|
| Net revenues: |
|
|
|
|
|
|
|
|
|
|
| Company-operated stores |
|
$ |
6,895.9 |
|
|
$ |
6,428.2 |
|
|
7.3 |
% |
|
89.4 |
% |
|
89.5 |
% |
| Licensed stores |
|
798.0 |
|
|
739.4 |
|
|
7.9 |
|
|
10.3 |
|
|
10.3 |
|
| Foodservice and other |
|
17.9 |
|
|
14.2 |
|
|
26.1 |
|
|
0.2 |
|
|
0.2 |
|
| Total net revenues |
|
7,711.8 |
|
|
7,181.8 |
|
|
7.4 |
|
|
100.0 |
|
|
100.0 |
|
| Cost of sales including occupancy costs |
|
2,795.2 |
|
|
2,576.9 |
|
|
8.5 |
|
|
36.2 |
|
|
35.9 |
|
| Store operating expenses |
|
2,655.5 |
|
|
2,413.5 |
|
|
10.0 |
|
|
34.4 |
|
|
33.6 |
|
| Other operating expenses |
|
63.4 |
|
|
60.4 |
|
|
5.0 |
|
|
0.8 |
|
|
0.8 |
|
| Depreciation and amortization expenses |
|
307.8 |
|
|
292.5 |
|
|
5.2 |
|
|
4.0 |
|
|
4.1 |
|
| General and administrative expenses |
|
105.3 |
|
|
92.0 |
|
|
14.5 |
|
|
1.4 |
|
|
1.3 |
|
| Total operating expenses |
|
5,927.2 |
|
|
5,435.3 |
|
|
9.1 |
|
|
76.9 |
|
|
75.7 |
|
| Operating income |
|
$ |
1,784.6 |
|
|
$ |
1,746.5 |
|
|
2.2 |
% |
|
23.1 |
% |
|
24.3 |
% |
| Supplemental Ratios: |
|
|
|
|
|
|
|
|
|
|
| Store operating expenses as a % of company-operated store revenues |
|
|
|
|
|
|
|
38.5 |
% |
|
37.5 |
% |
| Other operating expenses as a % of non-company-operated store revenues |
|
|
|
|
|
|
|
7.8 |
% |
|
8.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
China/Asia Pacific (CAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
Apr 2,
2017
|
|
Mar 27,
2016
|
|
%
Change
|
|
Apr 2,
2017
|
|
Mar 27,
2016
|
|
Quarter Ended
|
|
|
|
|
|
|
|
As a % of CAP
total net revenues
|
| Net revenues: |
|
|
|
|
|
|
|
|
|
|
| Company-operated stores |
|
$ |
687.8 |
|
|
$ |
608.5 |
|
|
13.0 |
% |
|
89.5 |
% |
|
89.8 |
% |
| Licensed stores |
|
78.4 |
|
|
67.0 |
|
|
17.0 |
|
|
10.2 |
|
|
9.9 |
|
| Foodservice and other |
|
2.7 |
|
|
2.4 |
|
|
12.5 |
|
|
0.4 |
|
|
0.4 |
|
| Total net revenues |
|
768.9 |
|
|
677.9 |
|
|
13.4 |
|
|
100.0 |
|
|
100.0 |
|
| Cost of sales including occupancy costs |
|
333.5 |
|
|
307.2 |
|
|
8.6 |
|
|
43.4 |
|
|
45.3 |
|
| Store operating expenses |
|
202.5 |
|
|
182.3 |
|
|
11.1 |
|
|
26.3 |
|
|
26.9 |
|
| Other operating expenses |
|
17.6 |
|
|
17.2 |
|
|
2.3 |
|
|
2.3 |
|
|
2.5 |
|
| Depreciation and amortization expenses |
|
49.3 |
|
|
44.0 |
|
|
12.0 |
|
|
6.4 |
|
|
6.5 |
|
| General and administrative expenses |
|
34.2 |
|
|
30.6 |
|
|
11.8 |
|
|
4.4 |
|
|
4.5 |
|
| Total operating expenses |
|
637.1 |
|
|
581.3 |
|
|
9.6 |
|
|
82.9 |
|
|
85.8 |
|
| Income from equity investees |
|
44.1 |
|
|
32.7 |
|
|
34.9 |
|
|
5.7 |
|
|
4.8 |
|
| Operating income |
|
$ |
175.9 |
|
|
$ |
129.3 |
|
|
36.0 |
% |
|
22.9 |
% |
|
19.1 |
% |
| Supplemental Ratios: |
|
|
|
|
|
|
|
|
|
|
| Store operating expenses as a % of company-operated store revenues |
|
|
|
|
|
|
|
29.4 |
% |
|
30.0 |
% |
| Other operating expenses as a % of non-company-operated store revenues |
|
|
|
|
|
|
|
21.7 |
% |
|
24.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Two Quarters Ended
|
|
|
|
|
|
|
|
|
|
|
| Net revenues: |
|
|
|
|
|
|
|
|
|
|
| Company-operated stores |
|
$ |
1,379.2 |
|
|
$ |
1,188.6 |
|
|
16.0 |
% |
|
89.6 |
% |
|
89.3 |
% |
| Licensed stores |
|
156.4 |
|
|
139.1 |
|
|
12.4 |
|
|
10.2 |
|
|
10.4 |
|
| Foodservice and other |
|
4.0 |
|
|
3.7 |
|
|
8.1 |
|
|
0.3 |
|
|
0.3 |
|
| Total net revenues |
|
1,539.6 |
|
|
1,331.4 |
|
|
15.6 |
|
|
100.0 |
|
|
100.0 |
|
| Cost of sales including occupancy costs |
|
670.8 |
|
|
602.3 |
|
|
11.4 |
|
|
43.6 |
|
|
45.2 |
|
| Store operating expenses |
|
406.8 |
|
|
357.6 |
|
|
13.8 |
|
|
26.4 |
|
|
26.9 |
|
| Other operating expenses |
|
36.7 |
|
|
32.1 |
|
|
14.3 |
|
|
2.4 |
|
|
2.4 |
|
| Depreciation and amortization expenses |
|
98.0 |
|
|
86.1 |
|
|
13.8 |
|
|
6.4 |
|
|
6.5 |
|
| General and administrative expenses |
|
74.8 |
|
|
61.1 |
|
|
22.4 |
|
|
4.9 |
|
|
4.6 |
|
| Total operating expenses |
|
1,287.1 |
|
|
1,139.2 |
|
|
13.0 |
|
|
83.6 |
|
|
85.6 |
|
| Income from equity investees |
|
86.6 |
|
|
63.9 |
|
|
35.5 |
|
|
5.6 |
|
|
4.8 |
|
| Operating income |
|
$ |
339.1 |
|
|
$ |
256.1 |
|
|
32.4 |
% |
|
22.0 |
% |
|
19.2 |
% |
| Supplemental Ratios: |
|
|
|
|
|
|
|
|
|
|
| Store operating expenses as a % of company-operated store revenues |
|
|
|
|
|
|
|
29.5 |
% |
|
30.1 |
% |
| Other operating expenses as a % of non-company-operated store revenues |
|
|
|
|
|
|
|
22.9 |
% |
|
22.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA
|
|
|
|
|
|
|
|
|
|
|
|
|
Apr 2,
2017
|
|
Mar 27,
2016
|
|
%
Change
|
|
Apr 2,
2017
|
|
Mar 27,
2016
|
|
Quarter Ended
|
|
|
|
|
|
|
|
As a % of EMEA
total net revenues
|
| Net revenues: |
|
|
|
|
|
|
|
|
|
|
| Company-operated stores |
|
$ |
127.5 |
|
|
$ |
182.8 |
|
|
(30.3 |
)% |
|
55.0 |
% |
|
68.1 |
% |
| Licensed stores |
|
90.9 |
|
|
73.3 |
|
|
24.0 |
|
|
39.2 |
|
|
27.3 |
|
| Foodservice |
|
13.3 |
|
|
12.2 |
|
|
9.0 |
|
|
5.7 |
|
|
4.5 |
|
| Total net revenues |
|
231.7 |
|
|
268.3 |
|
|
(13.6 |
) |
|
100.0 |
|
|
100.0 |
|
| Cost of sales including occupancy costs |
|
122.6 |
|
|
136.6 |
|
|
(10.2 |
) |
|
52.9 |
|
|
50.9 |
|
| Store operating expenses |
|
50.3 |
|
|
66.5 |
|
|
(24.4 |
) |
|
21.7 |
|
|
24.8 |
|
| Other operating expenses |
|
14.1 |
|
|
13.9 |
|
|
1.4 |
|
|
6.1 |
|
|
5.2 |
|
| Depreciation and amortization expenses |
|
7.6 |
|
|
10.7 |
|
|
(29.0 |
) |
|
3.3 |
|
|
4.0 |
|
| General and administrative expenses |
|
9.4 |
|
|
13.3 |
|
|
(29.3 |
) |
|
4.1 |
|
|
5.0 |
|
| Total operating expenses |
|
204.0 |
|
|
241.0 |
|
|
(15.4 |
) |
|
88.0 |
|
|
89.8 |
|
| Income from equity investees |
|
— |
|
|
0.3 |
|
|
(100.0 |
) |
|
— |
|
|
0.1 |
|
| Operating income |
|
$ |
27.7 |
|
|
$ |
27.6 |
|
|
0.4 |
% |
|
12.0 |
% |
|
10.3 |
% |
| Supplemental Ratios: |
|
|
|
|
|
|
|
|
|
|
| Store operating expenses as a % of company-operated store revenues |
|
|
|
|
|
|
|
39.5 |
% |
|
36.4 |
% |
| Other operating expenses as a % of non-company-operated store revenues |
|
|
|
|
|
|
|
13.5 |
% |
|
16.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Two Quarters Ended
|
|
|
|
|
|
|
|
|
|
|
| Net revenues: |
|
|
|
|
|
|
|
|
|
|
| Company-operated stores |
|
$ |
273.4 |
|
|
$ |
401.7 |
|
|
(31.9 |
)% |
|
55.4 |
% |
|
69.1 |
% |
| Licensed stores |
|
193.0 |
|
|
153.1 |
|
|
26.1 |
|
|
39.1 |
|
|
26.3 |
|
| Foodservice |
|
27.5 |
|
|
26.6 |
|
|
3.4 |
|
|
5.6 |
|
|
4.6 |
|
| Total net revenues |
|
493.9 |
|
|
581.4 |
|
|
(15.0 |
) |
|
100.0 |
|
|
100.0 |
|
| Cost of sales including occupancy costs |
|
258.7 |
|
|
288.0 |
|
|
(10.2 |
) |
|
52.4 |
|
|
49.5 |
|
| Store operating expenses |
|
97.1 |
|
|
140.4 |
|
|
(30.8 |
) |
|
19.7 |
|
|
24.1 |
|
| Other operating expenses |
|
30.2 |
|
|
28.7 |
|
|
5.2 |
|
|
6.1 |
|
|
4.9 |
|
| Depreciation and amortization expenses |
|
15.2 |
|
|
22.2 |
|
|
(31.5 |
) |
|
3.1 |
|
|
3.8 |
|
| General and administrative expenses |
|
21.1 |
|
|
27.8 |
|
|
(24.1 |
) |
|
4.3 |
|
|
4.8 |
|
| Total operating expenses |
|
422.3 |
|
|
507.1 |
|
|
(16.7 |
) |
|
85.5 |
|
|
87.2 |
|
| Income from equity investees |
|
— |
|
|
1.5 |
|
|
(100.0 |
) |
|
— |
|
|
0.3 |
|
| Operating income |
|
$ |
71.6 |
|
|
$ |
75.8 |
|
|
(5.5 |
)% |
|
14.5 |
% |
|
13.0 |
% |
| Supplemental Ratios: |
|
|
|
|
|
|
|
|
|
|
| Store operating expenses as a % of company-operated store revenues |
|
|
|
|
|
|
|
35.5 |
% |
|
35.0 |
% |
| Other operating expenses as a % of non-company-operated store revenues |
|
|
|
|
|
|
|
13.7 |
% |
|
16.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Channel Development
|
|
|
|
|
|
|
|
|
|
|
|
|
Apr 2,
2017
|
|
Mar 27,
2016
|
|
%
Change
|
|
Apr 2,
2017
|
|
Mar 27,
2016
|
|
Quarter Ended
|
|
|
|
|
|
|
|
As a % of
Channel Development
total net revenues |
| Net revenues: |
|
|
|
|
|
|
|
|
|
|
| CPG(1) |
|
$ |
346.3 |
|
|
$ |
354.4 |
|
|
(2.3 |
)% |
|
75.1 |
% |
|
76.8 |
% |
| Foodservice |
|
115.0 |
|
|
106.8 |
|
|
7.7 |
|
|
24.9 |
|
|
23.2 |
|
| Total net revenues |
|
461.3 |
|
|
461.2 |
|
|
— |
|
|
100.0 |
|
|
100.0 |
|
| Cost of sales |
|
254.5 |
|
|
252.9 |
|
|
0.6 |
|
|
55.2 |
|
|
54.8 |
|
| Other operating expenses |
|
50.5 |
|
|
53.5 |
|
|
(5.6 |
) |
|
10.9 |
|
|
11.6 |
|
| Depreciation and amortization expenses |
|
0.6 |
|
|
0.7 |
|
|
(14.3 |
) |
|
0.1 |
|
|
0.2 |
|
| General and administrative expenses |
|
2.1 |
|
|
4.7 |
|
|
(55.3 |
) |
|
0.5 |
|
|
1.0 |
|
| Total operating expenses |
|
307.7 |
|
|
311.8 |
|
|
(1.3 |
) |
|
66.7 |
|
|
67.6 |
|
| Income from equity investees |
|
40.0 |
|
|
32.6 |
|
|
22.7 |
|
|
8.7 |
|
|
7.1 |
|
| Operating income |
|
$ |
193.6 |
|
|
$ |
182.0 |
|
|
6.4 |
% |
|
42.0 |
% |
|
39.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Two Quarters Ended
|
|
|
|
|
|
|
|
|
|
|
| Net revenues: |
|
|
|
|
|
|
|
|
|
|
| CPG(1) |
|
$ |
783.3 |
|
|
$ |
753.6 |
|
|
3.9 |
% |
|
77.2 |
% |
|
77.4 |
% |
| Foodservice |
|
231.6 |
|
|
219.7 |
|
|
5.4 |
|
|
22.8 |
|
|
22.6 |
|
| Total net revenues |
|
1,014.9 |
|
|
973.3 |
|
|
4.3 |
|
|
100.0 |
|
|
100.0 |
|
| Cost of sales |
|
543.0 |
|
|
538.4 |
|
|
0.9 |
|
|
53.5 |
|
|
55.3 |
|
| Other operating expenses |
|
110.9 |
|
|
113.8 |
|
|
(2.5 |
) |
|
10.9 |
|
|
11.7 |
|
| Depreciation and amortization expenses |
|
1.2 |
|
|
1.4 |
|
|
(14.3 |
) |
|
0.1 |
|
|
0.1 |
|
| General and administrative expenses |
|
5.4 |
|
|
8.8 |
|
|
(38.6 |
) |
|
0.5 |
|
|
0.9 |
|
| Total operating expenses |
|
660.5 |
|
|
662.4 |
|
|
(0.3 |
) |
|
65.1 |
|
|
68.1 |
|
| Income from equity investees |
|
82.0 |
|
|
64.3 |
|
|
27.5 |
|
|
8.1 |
|
|
6.6 |
|
| Operating income |
|
$ |
436.4 |
|
|
$ |
375.2 |
|
|
16.3 |
% |
|
43.0 |
% |
|
38.5 |
% |
| |
|
(1) CPG revenues in Q2 FY17 included an unfavorable revenue deduction adjustment
pertaining to prior periods of $20.6 million.
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other Segments
|
|
|
|
|
|
|
|
|
Apr 2,
2017
|
|
Mar 27,
2016
|
|
%
Change
|
|
Quarter Ended
|
|
|
|
|
|
|
| Net revenues: |
|
|
|
|
|
|
| Company-operated stores |
|
$ |
45.2 |
|
|
$ |
55.4 |
|
|
(18.4 |
)% |
| Licensed stores |
|
0.7 |
|
|
1.0 |
|
|
(30.0 |
) |
| CPG, foodservice and other |
|
65.8 |
|
|
73.8 |
|
|
(10.8 |
) |
| Total net revenues |
|
111.7 |
|
|
130.2 |
|
|
(14.2 |
) |
| Cost of sales including occupancy costs |
|
74.1 |
|
|
83.0 |
|
|
(10.7 |
) |
| Store operating expenses |
|
34.5 |
|
|
30.9 |
|
|
11.7 |
|
| Other operating expenses |
|
20.7 |
|
|
27.2 |
|
|
(23.9 |
) |
| Depreciation and amortization expenses |
|
3.5 |
|
|
3.4 |
|
|
2.9 |
|
| General and administrative expenses |
|
4.4 |
|
|
4.9 |
|
|
(10.2 |
) |
| Total operating expenses |
|
137.2 |
|
|
149.4 |
|
|
(8.2 |
) |
| Operating loss |
|
$ |
(25.5 |
) |
|
$ |
(19.2 |
) |
|
32.8 |
% |
|
|
|
|
|
|
|
|
Two Quarters Ended
|
|
|
|
|
|
|
| Net revenues: |
|
|
|
|
|
|
| Company-operated stores |
|
$ |
116.2 |
|
|
$ |
136.3 |
|
|
(14.7 |
)% |
| Licensed stores |
|
1.7 |
|
|
2.2 |
|
|
(22.7 |
) |
| CPG, foodservice and other |
|
148.9 |
|
|
160.4 |
|
|
(7.2 |
) |
| Total net revenues |
|
266.8 |
|
|
298.9 |
|
|
(10.7 |
) |
| Cost of sales including occupancy costs |
|
164.5 |
|
|
178.3 |
|
|
(7.7 |
) |
| Store operating expenses |
|
65.2 |
|
|
61.1 |
|
|
6.7 |
|
| Other operating expenses |
|
38.2 |
|
|
50.8 |
|
|
(24.8 |
) |
| Depreciation and amortization expenses |
|
6.3 |
|
|
7.0 |
|
|
(10.0 |
) |
| General and administrative expenses |
|
8.0 |
|
|
14.8 |
|
|
(45.9 |
) |
| Total operating expenses |
|
282.2 |
|
|
312.0 |
|
|
(9.6 |
) |
| Operating loss |
|
$ |
(15.4 |
) |
|
$ |
(13.1 |
) |
|
17.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Information
The following supplemental information is provided for historical and comparative purposes.
|
U.S. Supplemental Data
|
|
|
|
|
|
|
Quarter Ended |
|
|
| ($ in millions) |
|
Apr 2, 2017 |
|
Mar 27, 2016 |
|
Change |
| Revenues |
|
$3,417.0 |
|
$3,186.5 |
|
7% |
| Comparable Store Sales Growth(1) |
|
3% |
|
7% |
|
|
| Change in Transactions |
|
(2)% |
|
3% |
|
|
| Change in Ticket |
|
4% |
|
5% |
|
|
| (1) |
|
Includes only Starbucks company-operated stores open 13 months or longer. Comparable
store sales exclude the effect of fluctuations in foreign currency exchange rates. |
| |
|
Store Data
|
|
|
Net stores opened/(closed) and transferred during the
period |
|
|
|
|
|
|
Quarter Ended |
|
Two Quarters Ended |
|
Stores open as of |
|
|
Apr 2,
2017 |
|
Mar 27,
2016 |
|
Apr 2,
2017 |
|
Mar 27,
2016 |
|
Apr 2,
2017 |
|
Mar 27,
2016 |
| Americas: |
|
|
|
|
|
|
|
|
|
|
|
|
| Company-operated stores |
|
82 |
|
|
38 |
|
|
157 |
|
|
119 |
|
|
9,176 |
|
|
8,790 |
| Licensed stores |
|
118 |
|
|
94 |
|
|
294 |
|
|
184 |
|
|
6,882 |
|
|
6,316 |
| Total Americas |
|
200 |
|
|
132 |
|
|
451 |
|
|
303 |
|
|
16,058 |
|
|
15,106 |
| China/Asia Pacific: |
|
|
|
|
|
|
|
|
|
|
|
|
| Company-operated stores |
|
67 |
|
|
54 |
|
|
171 |
|
|
144 |
|
|
2,982 |
|
|
2,596 |
| Licensed stores |
|
120 |
|
|
121 |
|
|
319 |
|
|
312 |
|
|
3,951 |
|
|
3,322 |
| Total China/Asia Pacific |
|
187 |
|
|
175 |
|
|
490 |
|
|
456 |
|
|
6,933 |
|
|
5,918 |
| EMEA: |
|
|
|
|
|
|
|
|
|
|
|
|
| Company-operated stores |
|
— |
|
|
(10 |
) |
|
(18 |
) |
|
(49 |
) |
|
505 |
|
|
688 |
| Licensed stores |
|
46 |
|
|
57 |
|
|
159 |
|
|
175 |
|
|
2,278 |
|
|
1,800 |
| Total EMEA |
|
46 |
|
|
47 |
|
|
141 |
|
|
126 |
|
|
2,783 |
|
|
2,488 |
| All Other Segments: |
|
|
|
|
|
|
|
|
|
|
|
|
| Company-operated stores |
|
(7 |
) |
|
(4 |
) |
|
(9 |
) |
|
(5 |
) |
|
349 |
|
|
370 |
| Licensed stores |
|
1 |
|
|
— |
|
|
3 |
|
|
(2 |
) |
|
38 |
|
|
39 |
| Total All Other Segments |
|
(6 |
) |
|
(4 |
) |
|
(6 |
) |
|
(7 |
) |
|
387 |
|
|
409 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Company |
|
427 |
|
|
350 |
|
|
1,076 |
|
|
878 |
|
|
26,161 |
|
|
23,921 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Disclosure
In addition to the GAAP results provided in this release, the company provides certain non-GAAP financial measures. Non-GAAP
financial measures are not in accordance with, or alternatives for, generally accepted accounting principles in the United States.
Our non-GAAP financial measures of non-GAAP operating income, non-GAAP operating margin and non-GAAP EPS exclude the below listed
items. The GAAP measures most directly comparable to non-GAAP operating income, non-GAAP operating margin and non-GAAP EPS are
operating income, operating margin and diluted net earnings per share, respectively.
| Non-GAAP Exclusion |
|
Rationale |
| Starbucks Japan acquisition-related items |
|
Management excludes Starbucks Japan acquisition-related transaction
costs as these items 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. In addition, management excludes
Starbucks Japan integration costs and amortization of the acquired intangible assets when evaluating performance because these
expenses are not representative of our core business operations. Although these items will affect earnings per share beyond the
current fiscal year, the majority of these costs will be recognized over a finite period of time. More specifically,
integration costs are expected to be concentrated in the first several years post-acquisition. Additionally, the amounts of the
acquired intangible assets are specific to the transaction, and the related future amortization was fixed at the time of
acquisition and generally cannot subsequently be changed or influenced by management. |
| Sale of Germany retail operations |
|
Management excludes the net gain, associated costs and changes in
estimated indemnifications related to the sale of our Germany retail operations as these items do not reflect future gains,
losses or tax impacts and do not contribute to a meaningful evaluation of the company's past or future operating
performance. |
| Other tax matters |
|
Management excludes incremental tax benefits in the U.S. as these tax
benefits do not contribute to a meaningful evaluation of the company's past or future operating performance. |
Non-GAAP operating income, non-GAAP operating margin 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.
| STARBUCKS CORPORATION |
| RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES |
|
(unaudited)
|
| |
|
|
Quarter Ended |
|
|
|
|
Apr 2,
2017 |
|
Mar 27,
2016 |
|
Change |
|
Consolidated
|
|
|
|
|
|
|
| Operating income, as reported (GAAP) |
|
$ |
935.4 |
|
|
$ |
864.2 |
|
|
8.2% |
| Starbucks Japan acquisition-related items - other(1) |
|
13.8 |
|
|
13.9 |
|
|
|
| Non-GAAP operating income |
|
$ |
949.2 |
|
|
$ |
878.1 |
|
|
8.1% |
|
|
|
|
|
|
|
| Operating margin, as reported (GAAP) |
|
17.7 |
% |
|
17.3 |
% |
|
40 bps |
| Starbucks Japan acquisition-related items - other(1) |
|
0.3 |
|
|
0.3 |
|
|
|
| Non-GAAP operating margin |
|
17.9 |
% |
|
17.6 |
% |
|
30 bps |
|
|
|
|
|
|
|
| Diluted net earnings per share, as reported (GAAP) |
|
$ |
0.45 |
|
|
$ |
0.39 |
|
|
15.4% |
| Starbucks Japan acquisition-related items - other(1) |
|
0.01 |
|
|
0.01 |
|
|
|
| Sale of Germany retail operations(2) |
|
(0.01 |
) |
|
— |
|
|
|
| Income tax effect on Non-GAAP adjustments(3) |
|
— |
|
|
— |
|
|
|
| Non-GAAP net earnings per share |
|
$ |
0.45 |
|
|
$ |
0.39 |
|
|
15.4% |
|
|
|
|
|
|
|
|
China/Asia Pacific (CAP)
|
|
|
|
|
|
|
| Operating income, as reported (GAAP) |
|
$ |
175.9 |
|
|
$ |
129.3 |
|
|
36.0% |
| Starbucks Japan acquisition-related items(1) |
|
13.7 |
|
|
13.1 |
|
|
|
| Non-GAAP operating income |
|
$ |
189.6 |
|
|
$ |
142.4 |
|
|
33.1% |
|
|
|
|
|
|
|
| Operating margin, as reported (GAAP) |
|
22.9 |
% |
|
19.1 |
% |
|
380 bps |
| Starbucks Japan acquisition-related items(1) |
|
1.8 |
|
|
1.9 |
|
|
|
| Non-GAAP operating margin |
|
24.7 |
% |
|
21.0 |
% |
|
370 bps |
| (1) |
|
Includes ongoing amortization expense of acquired intangible assets and transaction
and integration costs, such as incremental information technology ("IT") and compensation-related costs associated with the
acquisition. |
| (2) |
|
Represents a Q2 FY17 adjustment associated with estimated indemnifications related to
the sale of our Germany retail operations, which occurred in FY16. |
| (3) |
|
Income tax effect on non-GAAP adjustments was determined based on the nature of the
underlying items and their relevant jurisdictional tax rates. |
Starbucks Contact, Investor Relations:
Tom Shaw, 206-318-7118
investorrelations@starbucks.com
or
Starbucks Contact, Media:
Alisha Damodaran, 206-318-7100
press@starbucks.com
View source version on businesswire.com: http://www.businesswire.com/news/home/20170427006662/en/