Starbucks Q4 EPS Rises 37% to a Record $0.63 Per Share

Wed Oct 30, 2013 4:03pm EDT

* Reuters is not responsible for the content in this press release.

Starbucks Q4 EPS Rises 37% to a Record $0.63 Per Share

Revenue grows 13% to $3.8 billion with continued strong comp growth of 8% in the Americas and 7% globally

Margins expand in all segments; consolidated operating margin reaches record 17.6%

Board increases quarterly cash dividend 24% on strong performance and robust outlook

Starbucks Corporation (NASDAQ: SBUX) today reported financial results for its 13-week fiscal fourth quarter and 52-week fiscal year ended September 29, 2013.

Q4 Fiscal 2013 Highlights:

  • Total net revenues increased 13% to $3.8 billion
  • Global comparable store sales grew 7% driven by a 5% increase in traffic
    • 8% comp growth in the Americas and the U.S.
    • 2% comp growth in EMEA
    • 8% comp growth in China/Asia Pacific
  • Consolidated operating income increased 29% to $669 million
  • Consolidated operating margin expanded 220 basis points to 17.6%
  • Earnings per share increased 37% to $0.63 per share, including a $0.03 non-routine gain on the sale of Starbucks equity in Chile and Argentina joint ventures
  • Opened 558 net new stores in the quarter, including the 1,000th store in both China and Japan
  • The Board of Directors declared a cash dividend of $0.26 per share, an increase of 24%

Fiscal Year 2013 Highlights:

  • Total net revenues increased 12% to $14.9 billion
  • Global comparable store sales grew 7%, driven by a 5% increase in traffic
    • 7% comp growth in the Americas, driven by 8% comp growth in the U.S.
    • Comp sales flat in EMEA, traffic increased 2%
    • 9% comp growth in China/Asia Pacific, driven by a 7% increase in traffic
  • Consolidated operating income increased 23% to $2.5 billion
  • Consolidated operating margin expanded 150 basis points to a record 16.5%
  • Earnings per share increased 26% to $2.26 per share, including non-routine gains of $0.03 in Q2 and $0.03 in Q4 on the sale of Starbucks equity in Mexico, Chile and Argentina joint ventures
  • Opened 1,701 net new stores in the year; ended fiscal 2013 with 19,767 stores globally
  • Returned $1.2 billion to shareholders through dividend payments and share repurchases

“The fourth quarter of fiscal 2013 capped off by far the best year in Starbucks 42-year-history,” said Howard Schultz, chairman, president and ceo of Starbucks Coffee Company. “Our results were driven by disciplined, ongoing efforts to elevate the value and relevance of the Starbucks brand, continued innovation and the success of our efforts to deepen our connection to customers and communities around the world.”

“Today Starbucks announced incredible fourth quarter results in what has been a truly outstanding year,” said Troy Alstead, cfo and group president. “Outstanding global sales growth combined with record earnings and operating margin demonstrate the fundamental health of our business model and our continued ability to successfully execute on new initiatives while maintaining financial discipline. The strong momentum of the fourth quarter gives us further confidence in our robust outlook for fiscal 2014.”

     

Fourth Quarter Fiscal 2013 Summary

 
Quarter Ended Sep 29, 2013
Comparable Store Sales(1)       Sales Growth     Change in Transactions     Change in Ticket
Consolidated 7%     5%     2%
Americas 8% 5% 3%
United States 8% 5% 3%
EMEA 2% 3% (1)%
CAP       8%     6%     2%
(1) Includes only Starbucks company-operated stores open 13 months or longer.
 
             
Operating Results Quarter Ended    
($ in millions, except per share amounts)       Sep 29, 2013     Sep 30, 2012     Change
Net New Stores 558     415 143
Revenues $3,795.0 $3,364.2 13%
Operating Income $668.9 $519.6 29%
Operating Margin 17.6% 15.4% 220 bps
EPS       $0.63     $0.46     37%
 

Consolidated net revenues were $3.8 billion in Q4 FY13, an increase of 13% over Q4 FY12. The increase was primarily driven by 7% growth in global comparable store sales and incremental revenues from 1,701 net new store openings over the past 12 months.

Consolidated operating income increased 29% to $668.9 million, compared to $519.6 million for the same period a year ago. Operating margin of 17.6% expanded 220 basis points compared to the prior year quarter, primarily driven by sales leverage, store portfolio optimization in Europe and lower commodity costs.

             

Q4 Americas Segment Results

             
Quarter Ended
($ in millions)       Sep 29, 2013  

 

Sep 30, 2012     Change
Net New Stores(1) 340 256 84
Revenues $2,779.5 $2,511.7 11%
Operating Income $605.9 $523.6 16%
Operating Margin       21.8%     20.8%     100 bps
(1) Americas store data has been adjusted to exclude Seattle's Best Coffee and Evolution Fresh, which are now reported within All Other Segments.
 

Net revenues for the Americas segment were $2.8 billion in Q4 FY13, an increase of 11% over Q4 FY12. The increase was primarily due to an 8% increase in comparable store sales. Also contributing to the net revenue increase was incremental revenue from 680 net new store openings over the past 12 months.

Operating income increased to $605.9 million in Q4 FY13, growth of 16% compared to $523.6 million for the same period a year ago. Operating margin of 21.8% expanded 100 basis points compared to the prior year quarter and was primarily driven by sales leverage.

             

Q4 EMEA Segment Results

             
Quarter Ended
($ in millions)       Sep 29, 2013     Sep 30, 2012     Change
Net New Stores 28 33 (5)
Revenues $293.4 $283.7 3%
Operating Income (Loss) $27.3 ($6.7) nm
Operating Margin       9.3%     (2.4)%     1,170 bps
 

Net revenues for the EMEA segment were $293.4 million in Q4 FY13, an increase of 3% over Q4 FY12. The increase was due to licensed stores revenue growth of 26%, primarily driven by the opening of 129 net new stores in the last 12 months. A 2% increase in comparable store sales also contributed to the net revenue increase.

Operating income increased to $27.3 million in Q4 FY13, from a loss of $6.7 million in the prior year quarter. Operating margin expanded 1,170 basis points to 9.3%, primarily driven by lower costs related to store portfolio optimization activities that began in Q4 of the prior year.

             

Q4 China/Asia Pacific Segment Results

             
Quarter Ended
($ in millions)       Sep 29, 2013     Sep 30, 2012     Change
Net New Stores 197 132 65
Revenues $255.7 $198.0 29%
Operating Income $96.0 $65.6 46%
Operating Margin       37.5%     33.1%     440 bps
 

Net revenues for the China/Asia Pacific segment were $255.7 million in Q4 FY13, an increase of 29% over Q4 FY12. The increase was primarily due to incremental revenue from 588 net new store openings over the past 12 months. An 8% increase in comparable store sales also contributed to the net revenue increase.

Operating income of $96.0 million in Q4 FY13 increased 46% compared to the same period a year ago. Operating margin expanded 440 basis points to 37.5% this quarter compared to 33.1% in Q4 FY12. The margin expansion was primarily driven by sales leverage and lower operating costs, as well as a reduction to the estimated asset retirement obligations of our store leases in the region.

             

Q4 Channel Development Segment Results

             
Quarter Ended
($ in millions)       Sep 29, 2013     Sep 30, 2012     Change
Revenues $360.9 $318.5 13%
Operating Income $128.4 $98.9 30%
Operating Margin       35.6%     31.1%     450 bps
 

Net revenues for the Channel Development segment were $360.9 million in Q4 FY13, an increase of 13% over Q4 FY12. The increase was primarily driven by increased sales of premium single serve products. Foodservice revenue growth of 13% also contributed to the increase.

Operating income grew 30% to $128.4 million in Q4 FY13 compared to $98.9 million for the same period a year ago. Operating margin increased 450 basis points to 35.6% in Q4 FY13 compared to the prior year period. The margin expansion was primarily due to lower coffee costs and sales leverage.

             

Q4 All Other Segments Results

             
Quarter Ended
($ in millions)       Sep 29, 2013     Sep 30, 2012     Change
Net New Stores (7) (6) (1)
Revenues $105.5 $52.3 102%
Operating loss       ($16.5)     ($8.6)     92%
 

Net revenues for All Other Segments were $105.5 million in Q4 FY13, an increase of 102% over Q4 FY12, primarily driven by the addition of Teavana retail store sales beginning in Q2 of FY13.

Q4 FY13 operating loss was $16.5 million compared to a loss of $8.6 million in Q4 FY12. The increased operating loss was driven by investment spending on emerging brands.

     

Full Year Financial Results

 
Year Ended Sep 29, 2013
Comparable Store Sales(1)       Sales Growth     Change in Transactions     Change in Ticket
Consolidated 7%     5%     2%
Americas 7% 5%

2%

United States 8% 5% 2%
EMEA 0% 2% (2)%
CAP       9%     7%     2%
(1) Includes only Starbucks company-operated stores open 13 months or longer.
 
             
Operating Results Year Ended    
($ in millions, except per share amounts)       Sep 29, 2013     Sep 30, 2012     Change
Net New Stores(1) 1,701     1,063 638
Revenues $14,892.2 $13,299.5 12%
Operating Income $2,458.7 $1,997.4 23%
Operating Margin 16.5% 15.0% 150 bps
EPS       $2.26     $1.79     26%
(1) Includes 366 Teavana stores added in fiscal 2013.
 

Fiscal 2014 Targets

The company updates and reaffirms the following fiscal 2014 targets:

  • Revenue growth of 10% or greater
  • Global comparable store sales growth in the mid single digits
  • Consolidated operating margin improvement of approximately 150 to 200 basis points over FY13:
    • Americas: moderate improvement over FY13
    • EMEA: operating margin improving toward the high single digits
    • CAP: operating margin percentage moving toward the low 30's
    • Channel Development: modest improvement over FY13
  • Consolidated tax rate of approximately 34.5%
  • Earnings per share in the range of $2.55 to $2.65:
    • Q1 EPS in the range of $0.67 to $0.69
    • Q2 EPS in the range of $0.54 to $0.55
  • Approximately 1,500 net new stores now expected:
    • Americas: approximately 600
    • EMEA: increased to approximately 150
    • CAP: increased to approximately 750
  • Capital expenditures of approximately $1.2 billion

Company Updates

  • Starbucks long-term business partner Alsea, S.A.B. de C.V., acquired Starbucks 82% equity in Chile and its 18% equity in Argentina in the quarter and assumed full operational responsibilities for the 118 stores across both markets.
  • The company announced its intent to open its first store in Colombia in 2014, a joint venture between Starbucks two business partners in the Latin America region - Alsea and Grupo Nutresa.
  • On October 23, almost one year after its acquisition of Teavana, Starbucks opened the first-of-its-kind Teavana Fine Teas + Tea Bar in New York City’s Upper East Side. The Tea Bar elevates the premium tea experience by delivering an assortment of handcrafted tea beverages, premium loose leaf teas, tea-inspired food offerings and tea merchandise.
  • The company raised $750 million in proceeds in September from a public offering of 3.85% senior notes due 2023. The company plans to use the net proceeds for general corporate purposes.
  • Starbucks continued the rollout of La Boulange™ bakery products in Starbucks stores by launching in Phoenix, Chicago, Boston and New York City in Q4, bringing the total number of Starbucks stores that carry La Boulange™ products to nearly 3,300 at the end of fiscal 2013.
  • The company opened a state-of-the-art juicery that will quadruple production of cold-pressed Evolution Fresh™ juice and allows the brand to significantly increase innovation and distribution capacity.
  • The Board of Directors declared a cash dividend of $0.26 per share, payable on November 29, 2013 to shareholders of record as of November 14, 2013. The company also increased its targeted payout ratio to 35% to 45%, demonstrating an ongoing commitment to increasing returns to its shareholders.
  • The company repurchased 10.8 million shares of common stock in fiscal 2013; approximately 26 million shares remain available for purchase under previous authorizations.

Conference Call

Starbucks will be holding a conference call today at 2:00 p.m. Pacific Time, which will be hosted by Howard Schultz, chairman, president and ceo, Troy Alstead, cfo and group president, and John Culver, group president, China/Asia Pacific and Channel Development and Emerging Brands. The call will be webcast and can be accessed at http://investor.starbucks.com. A replay of the webcast will be available through approximately 9:00 p.m. Pacific Time on Friday, November 29, 2013. A replay of the call will also be available via telephone through 9:00 p.m. Pacific Time on Saturday, November 2, 2013 by calling 1-855-859-2056, reservation number 22399523.

The company’s consolidated statements of earnings, operating segment results, and other additional information have been provided on the following pages in accordance with current year classifications. This information should be reviewed in conjunction with this press release. Please refer to the company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2012 for additional information.

About Starbucks

Since 1971, Starbucks Coffee Company has been committed to ethically sourcing and roasting the highest quality arabica coffee in the world. Today, with stores around the globe, the company is the premier roaster and retailer of specialty coffee in the world. Through our unwavering commitment to excellence and our guiding principles, we bring the unique Starbucks Experience to life for every customer through every cup. To share in the experience, please visit us in our stores or online at www.starbucks.com.

Forward-Looking Statements

This release contains forward-looking statements relating to certain company initiatives, strategies and plans, as well as trends in or expectations regarding our diversified business model, the strength, health and potential of our business, operations and brand, business momentum, growth and growth opportunities, earnings per share, dividend payout ratios, revenues, operating margins, profits, capital expenditures, tax rates, comparable store sales and store openings and closings. These forward-looking statements are based on currently available operating, financial and competitive information and are subject to a number of significant risks and uncertainties. Actual future results may differ materially depending on a variety of factors including, but not limited to, coffee, dairy and other raw material prices and availability, costs associated with, and the successful execution of, the company's initiatives, strategies and plans, the acceptance of the company's products by our customers, fluctuations in U.S. and international economies and currencies, the impact of competition, the effect of legal proceedings, and other risks detailed in the company filings with the Securities and Exchange Commission, including the “Risk Factors” section of Starbucks Annual Report on Form 10-K for the fiscal year ended September 30, 2012. 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

Sep 29,     Sep 30,     % Sep 29,     Sep 30,
2013     2012     Change 2013     2012
As a % of total
net revenues
Net revenues:
Company-operated stores $ 3,009.6 $ 2,665.9 12.9 % 79.3 % 79.2 %
Licensed stores 346.3 305.3 13.4 9.1 9.1
CPG, foodservice and other 439.1   393.0   11.7 11.6   11.7  
Total net revenues 3,795.0 3,364.2

 

12.8 100.0 100.0
Cost of sales including occupancy costs 1,633.7 1,459.2 12.0 43.0 43.4
Store operating expenses 1,073.9 989.9 8.5 28.3 29.4
Other operating expenses 107.3 111.9 (4.1 ) 2.8 3.3
Depreciation and amortization expenses 166.1 141.7 17.2 4.4 4.2
General and administrative expenses 226.1   203.8   10.9 6.0   6.1  
Total operating expenses 3,207.1 2,906.5 10.3 84.5 86.4
Income from equity investees 81.0   61.9   30.9 2.1   1.8  
Operating income 668.9 519.6 28.7 17.6 15.4
Interest income and other, net 72.1 26.3 174.1 1.9 0.8
Interest expense (9.1 ) (6.4 ) 42.2 (0.2 ) (0.2 )
Earnings before income taxes 731.9 539.5 35.7 19.3 16.0
Income taxes 250.9   180.2   39.2 6.6   5.4  
Net earnings including noncontrolling interests 481.0 359.3 33.9 12.7 10.7
Net earnings attributable to noncontrolling interests (0.1 ) 0.3   nm    
Net earnings attributable to Starbucks $ 481.1   $ 359.0   34.0 % 12.7 % 10.7 %
 
Net earnings per common share - diluted $ 0.63   $ 0.46   37.0 %
Weighted avg. shares outstanding - diluted 764.5 773.5
 
Cash dividends declared per share $ 0.26 $ 0.21
 
Supplemental Ratios:
Store operating expenses as a percentage of company-operated stores revenue 35.7 % 37.1 %
Effective tax rate including noncontrolling interest 34.3 % 33.4 %
 
 
STARBUCKS CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS

(unaudited, in millions, except per share data)

 
     

Year Ended

   

Year Ended

Sep 29,     Sep 30,     % Sep 29,     Sep 30,
2013     2012     Change 2013     2012

 

As a % of total

net revenues
Net revenues:
Company-operated stores $ 11,793.2 $ 10,534.5 11.9 % 79.2 % 79.2 %
Licensed stores 1,360.5 1,210.3 12.4 9.1 9.1
CPG, foodservice and other 1,738.5   1,554.7   11.8 11.7   11.7  
Total net revenues 14,892.2 13,299.5 12.0 100.0 100.0
Cost of sales including occupancy costs 6,382.3 5,813.3 9.8 42.9 43.7
Store operating expenses 4,286.1 3,918.1 9.4 28.8 29.5
Other operating expenses 457.2 429.9 6.4 3.1 3.2
Depreciation and amortization expenses 621.4 550.3 12.9 4.2 4.1
General and administrative expenses 937.9   801.2   17.1 6.3   6.0  
Total operating expenses 12,684.9 11,512.8 10.2 85.2 86.6
Income from equity investees 251.4   210.7   19.3 1.7   1.6  
Operating income 2,458.7 1,997.4 23.1 16.5 15.0
Interest income and other, net 123.6 94.4 30.9 0.8 0.7
Interest expense (28.1 ) (32.7 ) (14.1 ) (0.2 ) (0.2 )
Earnings before income taxes 2,554.2 2,059.1 24.0 17.2 15.5
Income taxes 832.3   674.4   23.4 5.6   5.1  
Net earnings including noncontrolling interests 1,721.9 1,384.7 24.4 11.6 10.4
Net earnings attributable to noncontrolling interests 0.5   0.9   (44.4 )    
Net earnings attributable to Starbucks $ 1,721.4   $ 1,383.8   24.4 % 11.6 % 10.4 %
 
Net earnings per common share - diluted $ 2.26   $ 1.79   26.3 %
Weighted avg. shares outstanding - diluted 762.3 773.0
 
Cash dividends declared per share $ 0.89 $ 0.72
 
Supplemental Ratios:
Store operating expenses as a percentage of company-operated stores revenue 36.3 % 37.2 %
Effective tax rate including noncontrolling interest 32.6 % 32.8 %
 

Segment Results

The tables below present reportable segment results net of intersegment eliminations (in millions):

                     

Americas

                     
Sep 29, Sep 30, % Sep 29, Sep 30,
2013     2012     Change 2013     2012

As a % of Americas

Quarter Ended

total net revenues
Net revenues:
Company-operated stores $ 2,538.7 $ 2,294.2 10.7 % 91.3 % 91.3 %
Licensed stores 231.0 202.2 14.2 8.3 8.1
CPG, foodservice and other 9.8   15.3   (35.9 ) 0.4   0.6  
Total net revenues 2,779.5 2,511.7 10.7 100.0 100.0
Cost of sales including occupancy costs 1,071.3 972.0 10.2 38.5 38.7
Store operating expenses 923.6 857.6 7.7 33.2 34.1
Other operating expenses 22.8 24.4 (6.6 ) 0.8 1.0
Depreciation and amortization expenses 113.1 100.9 12.1 4.1 4.0
General and administrative expenses 42.8   33.2   28.9 1.5   1.3  
Total operating expenses 2,173.6   1,988.1   9.3 78.2   79.2  
Operating income $ 605.9   $ 523.6   15.7 % 21.8 % 20.8 %
Supplemental Ratios:
Store operating expenses as a percentage of company-operated stores revenue 36.4 % 37.4 %
 

Year Ended

Net revenues:
Company-operated stores $ 10,038.3 $ 9,077.0 10.6 % 91.3 % 91.4 %
Licensed stores 915.4 825.8 10.9 8.3 8.3
CPG, foodservice and other 47.1   33.2   41.9 0.4   0.3  
Total net revenues 11,000.8 9,936.0 10.7 100.0 100.0
Cost of sales including occupancy costs 4,214.9 3,885.5 8.5 38.3 39.1
Store operating expenses 3,710.2 3,427.8 8.2 33.7 34.5
Other operating expenses 96.9 83.8 15.6 0.9 0.8
Depreciation and amortization expenses 429.3 392.4 9.4 3.9 3.9
General and administrative expenses 186.7   128.2   45.6 1.7   1.3  
Total operating expenses 8,638.0 7,917.7 9.1 78.5 79.7
Income from equity investees 2.4   2.1   14.3    
Operating income $ 2,365.2   $ 2,020.4   17.1 % 21.5 % 20.3 %
Supplemental Ratios:
Store operating expenses as a percentage of company-operated stores revenue 37.0 % 37.8 %
 
                     

EMEA

                     

 

Sep 29, Sep 30, % Sep 29, Sep 30,

 

2013     2012     Change 2013     2012
As a % of EMEA

Quarter Ended

total net revenues
Net revenues:
Company-operated stores $ 232.9 $ 233.2 (0.1 )% 79.4 % 82.2 %
Licensed stores 50.8 40.4

25.7

17.3 14.2
CPG, foodservice and other 9.7   10.1   (4.0 ) 3.3   3.6  
Total net revenues 293.4 283.7 3.4 100.0 100.0
Cost of sales including occupancy costs 150.1 153.2 (2.0 ) 51.2 54.0
Store operating expenses 80.1 97.1 (17.5 ) 27.3 34.2
Other operating expenses 9.5 7.6 25.0 3.2 2.7
Depreciation and amortization expenses 13.9 14.2 (2.1 ) 4.7 5.0
General and administrative expenses 12.9   18.3   (29.5 ) 4.4   6.5  
Total operating expenses 266.5 290.4 (8.2 ) 90.8 102.4
Income from equity investees 0.4     nm 0.1    
Operating income $ 27.3   $ (6.7 ) nm 9.3 % (2.4 )%
Supplemental Ratios:
Store operating expenses as a percentage of company-operated stores revenue 34.4 % 41.6 %
 

Year Ended

Net revenues:
Company-operated stores $ 932.8 $ 968.3 (3.7 )% 80.4 % 84.8 %
Licensed stores 190.3 139.5 36.4 16.4 12.2
CPG, foodservice and other 36.9   33.5   10.1 3.2   2.9  
Total net revenues 1,160.0 1,141.3 1.6 100.0 100.0
Cost of sales including occupancy costs 590.9 597.3 (1.1 ) 50.9 52.3
Store operating expenses 339.4 371.1 (8.5 ) 29.3 32.5
Other operating expenses 38.5 33.6 14.6 3.3 2.9
Depreciation and amortization expenses 55.5 57.1 (2.8 ) 4.8 5.0
General and administrative expenses 71.9   75.7   (5.0 ) 6.2   6.6  
Total operating expenses 1,096.2 1,134.8 (3.4 ) 94.5 99.4
Income from equity investees 0.4   0.3   33.3    
Operating income $ 64.2   $ 6.8   844.1 % 5.5 % 0.6 %
Supplemental Ratios:
Store operating expenses as a percentage of company-operated stores revenue 36.4 % 38.3 %
 
                     

China / Asia Pacific (CAP)

                     

Sep 29,

Sep 30,

%

Sep 29,

Sep 30,

2013

   

2012

   

Change

2013

    2012
As a % of CAP

Quarter Ended

total net revenues
Net revenues:
Company-operated stores $ 193.2 $ 138.5 39.5 % 75.6 % 69.9 %
Licensed stores 62.5   59.5   5.0 24.4   30.1  
Total net revenues 255.7 198.0 29.1 100.0 100.0
Cost of sales including occupancy costs 125.6 100.1 25.5 49.1 50.6
Store operating expenses 48.2 35.2 36.9 18.9 17.8
Other operating expenses 12.4 14.6 (15.1 ) 4.8 7.4
Depreciation and amortization expenses 9.3 6.7 38.8 3.6 3.4
General and administrative expenses 10.9   7.6   43.4 4.3   3.8  
Total operating expenses 206.4 164.2 25.7 80.7 82.9
Income from equity investees 46.7   31.8   46.9 18.3   16.1  
Operating income $ 96.0   $ 65.6   46.3 % 37.5 % 33.1 %
Supplemental Ratios:
Store operating expenses as a percentage of company-operated stores revenue 24.9 % 25.4 %
 

Year Ended

Net revenues:

Company-operated stores $ 671.7 $ 489.2 37.3 % 73.2 % 67.8 %
Licensed stores 245.3   232.2   5.6 26.8   32.2  
Total net revenues 917.0 721.4 27.1 100.0 100.0
Cost of sales including occupancy costs 449.5 362.8 23.9 49.0 50.3
Store operating expenses 170.0 119.2 42.6 18.5 16.5
Other operating expenses 46.1 47.0 (1.9 ) 5.0 6.5
Depreciation and amortization expenses 33.8 23.2 45.7 3.7 3.2
General and administrative expenses 48.4   39.0   24.1 5.3   5.4  
Total operating expenses 747.8 591.2 26.5 81.5 82.0
Income from equity investees 152.0   122.4   24.2 16.6   17.0  
Operating income $ 321.2   $ 252.6   27.2 % 35.0 % 35.0 %
Supplemental Ratios:
Store operating expenses as a percentage of company-operated stores revenue 25.3 % 24.4 %
 
                     

Channel Development

                     
Sep 29, Sep 30, % Sep 29, Sep 30,
2013     2012     Change 2013     2012
As a % of
Channel Development

Quarter Ended

total net revenues
Net revenues:
CPG $ 266.2 $ 235.0 13.3 % 73.8 % 73.8 %
Foodservice 94.7   83.5   13.4 26.2   26.2  
Total net revenues 360.9 318.5 13.3 100.0 100.0
Cost of sales 217.5 201.2 8.1 60.3 63.2
Other operating expenses 44.4 43.8 1.4 12.3 13.8
Depreciation and amortization expenses 0.2 0.3 (33.3 ) 0.1 0.1
General and administrative expenses 4.3   4.1   4.9 1.2   1.3  
Total operating expenses 266.4 249.4 6.8 73.8 78.3
Income from equity investees 33.9   29.8   13.8 9.4   9.4  
Operating income $ 128.4   $ 98.9   29.8 % 35.6 % 31.1 %
 

Year Ended

Net revenues:
CPG $ 1,056.0 $ 952.1 10.9 % 74.3 % 73.7 %
Foodservice 364.7   340.1   7.2 25.7   26.3  
Total net revenues 1,420.7 1,292.2 9.9 100.0 100.0
Cost of sales 878.4 827.6 6.1 61.8 64.0
Other operating expenses 201.2 191.1 5.3 14.2 14.8
Depreciation and amortization expenses 1.1 1.3 (15.4 ) 0.1 0.1
General and administrative expenses 21.1   17.0   24.1 1.5   1.3  
Total operating expenses 1,101.8 1,037.0 6.2 77.6 80.3
Income from equity investees 96.6   85.2   13.4 6.8   6.6  
Operating income $ 415.5   $ 340.4   22.1 % 29.2 % 26.3 %
 
             

All Other Segments

             
Sep 29, Sep 30, %
2013     2012     Change

Quarter Ended

Net revenues:
Company-operated stores $ 44.8 $ nm
Licensed stores 2.0 3.2 (37.5 )
CPG, foodservice and other 58.7   49.1   19.6
Total net revenues 105.5 52.3 101.7
Cost of sales including occupancy costs 67.3 33.5 100.9
Store operating expenses 22.0 nm
Other operating expenses 18.7 21.6 (13.4 )
Depreciation and amortization expenses 3.9 0.8 387.5
General and administrative expenses 10.1   5.3   90.6
Total operating expenses 122.0 61.2 99.3
Income from equity investees   0.3   (100.0 )
Operating loss $ (16.5 ) $ (8.6 ) 91.9 %
 

Year Ended

Net revenues:
Company-operated stores $ 150.4 $ nm
Licensed stores 9.5 12.8 (25.8 )
CPG, foodservice and other 233.8   195.8   19.4
Total net revenues 393.7 208.6 88.7
Cost of sales including occupancy costs 239.8 140.1 71.2
Store operating expenses 66.5 nm
Other operating expenses 75.3 74.4 1.2
Depreciation and amortization expenses 11.7 2.5 368.0
General and administrative expenses 34.9   19.7   77.2
Total operating expenses 428.2 236.7 80.9
Income from equity investees   0.7   (100.0 )
Operating loss $ (34.5 ) $ (27.4 ) 25.9 %
 
 
STARBUCKS CORPORATION
CONSOLIDATED BALANCE SHEETS

(in millions, except per share data)

(unaudited)

 
      Sep 29,     Sep 30,
2013 2012
ASSETS
Current assets:
Cash and cash equivalents $ 2,575.7 $ 1,188.6
Short-term investments 658.1 848.4
Accounts receivable, net 561.4 485.9
Inventories 1,111.2 1,241.5
Prepaid expenses and other current assets 287.7 196.5
Deferred income taxes, net 214.8   238.7
Total current assets 5,408.9 4,199.6
Long-term investments 58.3 116.0
Equity and cost investments 496.5 459.9
Property, plant and equipment, net 3,200.5 2,658.9
Other assets 202.1 242.0
Other intangible assets 274.8 143.7
Goodwill 862.9   399.1
TOTAL ASSETS $ 10,504.0   $ 8,219.2
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $ 491.7 $ 398.1
Accrued liabilities 1,270.8 1,133.8
Insurance reserves 178.5 167.7
Deferred revenue 653.7   510.2
Total current liabilities 2,594.7 2,209.8
Long-term debt 1,299.4 549.6
Other long-term liabilities 414.4   345.3
Total liabilities 4,308.5 3,104.7
Shareholders’ equity:
Common stock ($0.001 par value) — authorized, 1,200.0 shares; issued and outstanding, 753.2 shares and 749.3 shares (includes 3.4 common stock units), respectively 0.8 0.7
Additional paid-in capital 282.1 39.4
Retained earnings 5,843.5 5,046.2
Accumulated other comprehensive income 67.0   22.7
Total shareholders’ equity 6,193.4 5,109.0
Noncontrolling interests 2.1   5.5
Total equity 6,195.5   5,114.5
TOTAL LIABILITIES AND EQUITY $ 10,504.0   $ 8,219.2
 
 
STARBUCKS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited and in millions)

 
      Sep 29,     Sep 30,     Oct 2,

Fiscal Year Ended

2013 2012 2011
OPERATING ACTIVITIES:
Net earnings including noncontrolling interests $ 1,721.9 $ 1,384.7 $ 1,248.0
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization 655.6 580.6 550.0
Gain on sale of properties (30.2 )
Deferred income taxes, net 65.2 61.1 106.2
Income earned from equity method investees, net of distributions (56.2 ) (49.3 ) (32.9 )

Gain resulting from sale/acquisition of equity in joint ventures

(80.1 ) (55.2 )
Stock-based compensation 142.3 153.6 145.2
Other 33.5 23.6 33.3
Cash provided/(used) by changes in operating assets and liabilities:
Accounts receivable (68.3 ) (90.3 ) (88.7 )
Inventories 152.5 (273.3 ) (422.3 )
Accounts payable 88.7 (105.2 ) 227.5
Accrued liabilities and insurance reserves 47.5 23.7 (81.8 )
Deferred revenue 139.9 60.8 35.8
Prepaid expenses, other current assets and other assets 76.3   (19.7 ) (22.5 )
Net cash provided by operating activities 2,918.8 1,750.3 1,612.4
INVESTING ACTIVITIES:
Purchase of investments (785.9 ) (1,748.6 ) (966.0 )
Sales, maturities and calls of investments 1,040.2 1,796.4 430.0
Acquisitions, net of cash acquired (610.4 ) (129.1 ) (55.8 )
Additions to property, plant and equipment (1,161.7 ) (856.2 ) (531.9 )
Proceeds from the sale of property, plant, and equipment 15.3 5.3 117.4
Proceeds from sale of equity in joint ventures 108.0
Other (27.2 ) (41.8 ) (13.2 )
Net cash used by investing activities (1,421.7 ) (974.0 ) (1,019.5 )
FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt 749.7
Principal payments on long-term debt (35.2 )
(Payments)/proceeds from short-term borrowings (30.8 ) 30.8
Purchase of noncontrolling interest (27.5 )
Proceeds from issuance of common stock 247.2 236.6 250.4
Excess tax benefit from exercise of stock options 258.1 169.8 103.9
Cash dividends paid (628.9 ) (513.0 ) (389.5 )
Repurchase of common stock (588.1 ) (549.1 ) (555.9 )
Minimum tax withholdings on share-based awards (121.4 ) (58.5 ) (15.0 )
Other 10.4   (0.5 ) (5.2 )
Net cash used by financing activities (108.2 ) (745.5 ) (608.0 )
Effect of exchange rate changes on cash and cash equivalents (1.8 ) 9.7   (0.8 )
Net increase/(decrease) in cash and cash equivalents 1,387.1 40.5 (15.9 )
CASH AND CASH EQUIVALENTS:
Beginning of period 1,188.6   1,148.1   1,164.0  
End of period $ 2,575.7   $ 1,188.6   $ 1,148.1  
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest, net of capitalized interest $ 34.4 $ 34.4 $ 34.4
Income taxes $ 539.1 $ 416.9 $ 350.1
 

Supplemental Information

The following supplemental information is provided for historical and comparative purposes.

             

Fiscal Fourth Quarter 2013 U.S. Supplemental Data

             
Quarter Ended
($ in millions)       Sep 29, 2013     Sep 30, 2012     Change
Revenues $2,451.3 $2,204.7 11%
Operating Income $583.8 $495.2 18%
Operating Margin       23.8%     22.5%     130 bps
 
             

Store Data:

 
Net stores opened (closed) during the period        
Quarter Ended     Year Ended Stores open as of
Sep 29,     Sep 30, Sep 29,     Sep 30, Sep 29, Sep 30,
2013 2012 2013 2012 2013 2012
Americas

 

Company-operated stores(1) 164 150 276 228 8,078 7,802
Licensed stores(1) 176 106 404 280 5,415 5,011
340 256 680 508 13,493 12,813
EMEA

Company-operated stores(2)

(6) 3 (29) 10 853 882
Licensed stores(2) 34 30 129 101 1,116 987
28 33 100 111 1,969 1,869
CAP
Company-operated stores 79 59 240 154 906 666
Licensed stores 118 73 348 294 2,976 2,628
197 132 588 448 3,882 3,294
All Other Segments
Company-operated stores 7 343 357 14
Licensed stores (14) (6) (10) (4) 66 76
(7) (6) 333 (4) 423 90
           
Total Company 558 415 1,701 1,063 19,767 18,066
 

(1) Americas store data has been adjusted for the sale of store locations in Chile to a joint venture partner in the fourth quarter of fiscal 2013 by reclassifying historical information from company-operated stores to licensed stores, and to exclude Seattle's Best Coffee and Evolution Fresh, which are now reported within All Other Segments.

(2) EMEA store data has been adjusted for the transfer of certain company-operated stores to licensees in the fourth quarter of fiscal 2012.

© 2013 Starbucks Coffee Company. All rights reserved.

Starbucks Corporation
Investor Relations:
JoAnn DeGrande / Greg Smith, 206-318-7118
investorrelations@starbucks.com
or
Media:
Jim Olson, 206-318-7100
press@starbucks.com