GAAP EPS Up 24% to a Q3 Record $0.51 Per Share; Non-GAAP EPS Up 17%
to a Record $0.49 Per Share
Comparable Store Sales Rise 7% in China, 4% in the U.S. and 4%
Globally
Revenues Up 7% to Q3 Record $5.2 Billion; Operating Income Up 9% to a
Q3 Record $1.0 Billion
Channel Development Revenues Increase 9%; Operating Income Jumps 31%
Starbucks Rewards Active Membership Up 18% YOY; Now Over 12 Million
Active Members in the U.S. and Canada
SEATTLE--(BUSINESS WIRE)--Jul. 21, 2016--
Starbucks Corporation (NASDAQ: SBUX) today reported financial results
for its 13-week fiscal third quarter and 39-week fiscal year to date
ended June 26, 2016. Fiscal 2016 and fiscal 2015 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.
Q3 Fiscal 2016 Highlights:
-
Global comparable store sales increased 4%, comprised of a 4% increase
in the Americas segment, a 3% increase in the China/Asia Pacific
segment, and a 1% decline in the EMEA segment
-
Consolidated net revenues grew 7% to a Q3 record $5.2 billion
-
Consolidated GAAP operating income increased 9% to a Q3 record $1.0
billion
-
Non-GAAP operating income increased 9% over Q3 FY15 non-GAAP, to a
Q3 record $1.0 billion
-
Consolidated GAAP operating margin increased 30 basis points to a Q3
record 19.5%
-
Non-GAAP operating margin expanded 30 basis points over Q3 FY15
non-GAAP, to a Q3 record 19.8%
-
GAAP EPS increased 24% to a Q3 record $0.51 per share
-
Non-GAAP EPS increased 17% over Q3 FY15 non-GAAP, to a record
$0.49 per share
-
Channel Development revenues grew 9% to a Q3 record $441 million;
operating income increased 31% to a Q3 record $188 million; operating
margin expanded 710 basis points to a Q3 record 43%
-
The company opened 474 net new stores globally in Q3, bringing total
stores to 24,395 in 74 countries worldwide
-
Mobile Order and Pay usage reached 5% of U.S. transactions, up from 4%
in Q2 FY16
-
Membership in the company's Starbucks Rewards loyalty program
increased 18% year-over-year to 12.3 million active loyalty members in
the U.S.
“Starbucks record Q3 performance, highlighted by strong 7% comp growth
and record revenues and profits in China and 18% year-over-year growth
in our Starbucks Rewards loyalty program, demonstrates the strength and
resilience of the Starbucks brand and business around the world,” said
Starbucks chairman and ceo Howard Schultz. “As we enter Q4 and approach
fiscal 2017, we have clear line of sight to returning our U.S. business
to historic levels of comp sales growth which had been at or above 5%
for the 25 consecutive quarters prior to Q3.”
“Starbucks third quarter results once again reflect strong revenue and
profit growth and represent the first non-holiday quarter in which our
operating income exceeded $1 billion,” said Scott Maw, cfo. “We are
confident in the correctness of the strategic, operational and digital
moves we outlined today and remain steadfast in our commitment to
deliver significant, profitable growth over the long term.”
Third Quarter Fiscal 2016 Summary
|
|
|
Quarter Ended Jun 26, 2016
|
|
Comparable Store Sales(1)
|
|
Sales Growth
|
|
Change in Transactions
|
|
Change in Ticket
|
|
Consolidated(2)
|
|
4%
|
|
0%
|
|
4%
|
|
Americas
|
|
4%
|
|
0%
|
|
4%
|
|
CAP(2)
|
|
3%
|
|
2%
|
|
1%
|
|
EMEA
|
|
(1)%
|
|
0%
|
|
(2)%
|
(1) Includes only Starbucks company-operated stores open 13
months or longer.
(2) Beginning in December of fiscal 2016, comparable store
sales include the results of the 1,009 company-operated stores acquired
as part of the acquisition of Starbucks Japan in the first quarter of
fiscal 2015.
|
Operating Results
|
|
Quarter Ended
|
|
|
|
($ in millions, except per share amounts)
|
|
Jun 26, 2016
|
|
Jun 28, 2015
|
|
Change
|
|
Net New Stores
|
|
474
|
|
431
|
|
43
|
|
Revenues
|
|
$5,238.0
|
|
$4,881.2
|
|
7%
|
|
Operating Income
|
|
$1,022.3
|
|
$938.6
|
|
9%
|
|
Operating Margin
|
|
19.5%
|
|
19.2%
|
|
30 bps
|
|
EPS
|
|
$0.51
|
|
$0.41
|
|
24%
|
Consolidated net revenues were $5.2 billion in Q3 FY16, an increase of
7% over Q3 FY15. The increase was primarily driven by the opening of
1,876 net new stores over the past 12 months and a 4% increase in global
comparable store sales.
Consolidated operating income grew 9% to $1,022.3 million in Q3 FY16, up
from $938.6 million in Q3 FY15. Consolidated operating margin expanded
30 basis points to 19.5%. The increase was primarily due to sales
leverage and lower commodity costs, primarily coffee, and was partially
offset by investments in our partners (employees) and digital platforms.
Q3 Americas Segment Results
|
|
|
Quarter Ended
|
|
|
|
($ in millions)
|
|
Jun 26, 2016
|
|
Jun 28, 2015
|
|
Change
|
|
Net New Stores
|
|
194
|
|
171
|
|
23
|
|
Revenues
|
|
$3,645.5
|
|
$3,414.6
|
|
7%
|
|
Operating Income
|
|
$898.5
|
|
$855.3
|
|
5%
|
|
Operating Margin
|
|
24.6%
|
|
25.0%
|
|
(40) bps
|
Net revenues for the Americas segment were $3.6 billion in Q3 FY16, an
increase of 7% over Q3 FY15. The increase was driven by a 4% increase in
comparable store sales and incremental revenues from 730 net new store
openings over the past 12 months.
Operating income of $898.5 million in Q3 FY16 grew 5% versus $855.3
million in Q3 FY15. Operating margin of 24.6% declined 40 basis points
primarily due to investments in our partners (employees), partially
offset by sales leverage and lower commodity costs.
Q3 China/Asia Pacific Segment Results
|
|
|
Quarter Ended
|
|
|
|
($ in millions)
|
|
Jun 26, 2016
|
|
Jun 28, 2015
|
|
Change
|
|
Net New Stores
|
|
209
|
|
205
|
|
4
|
|
Revenues
|
|
$768.2
|
|
$652.7
|
|
18%
|
|
Operating Income
|
|
$182.8
|
|
$150.0
|
|
22%
|
|
Operating Margin
|
|
23.8%
|
|
23.0%
|
|
80 bps
|
Net revenues for the China/Asia Pacific segment grew 18% over Q3 FY15 to
$768.2 million in Q3 FY16. The increase was primarily driven by
incremental revenues from 888 net new store openings over the past 12
months.
Operating income grew 22% over Q3 FY15 to $182.8 million in Q3 FY16.
Operating margin expanded 80 basis points to 23.8% primarily driven by
higher income from our joint venture operations and sales leverage,
partially offset by the impact of foreign currency translation.
Q3 EMEA Segment Results
|
|
|
Quarter Ended
|
|
|
|
($ in millions)
|
|
Jun 26, 2016
|
|
Jun 28, 2015
|
|
Change
|
|
Net New Stores
|
|
77
|
|
58
|
|
19
|
|
Revenues
|
|
$273.4
|
|
$294.7
|
|
(7)%
|
|
Operating Income
|
|
$29.9
|
|
$36.0
|
|
(17)%
|
|
Operating Margin
|
|
10.9%
|
|
12.2%
|
|
(130) bps
|
Net revenues for the EMEA segment were $273.4 million in Q3 FY16, a 7%
decrease versus Q3 FY15. The decrease was primarily due to the
conversion of 226 company-operated stores to licensed stores over the
past 12 months, which included the sale of our Germany retail operations
in Q3 FY16, and unfavorable foreign currency translation. Partially
offsetting the decrease were incremental revenues from the opening of
291 net new licensed stores over the past 12 months.
Operating income decreased 17% to $29.9 million in Q3 FY16, down from
$36.0 million in Q3 FY15. Operating margin declined 130 basis points to
10.9%, primarily due to the sale of our Germany retail operations,
driven by costs related to the sale and the resulting reduction of
company-operated revenue. Sales deleverage of certain company-operated
stores in the region also contributed. The margin decline was partially
offset by sales leverage driven by the shift in the portfolio towards
more licensed stores.
Q3 Channel Development Segment Results
|
|
|
Quarter Ended
|
|
|
|
($ in millions)
|
|
Jun 26, 2016
|
|
Jun 28, 2015
|
|
Change
|
|
Revenues
|
|
$440.8
|
|
$403.6
|
|
9%
|
|
Operating Income
|
|
$187.8
|
|
$143.4
|
|
31%
|
|
Operating Margin
|
|
42.6%
|
|
35.5%
|
|
710 bps
|
Net revenues for the Channel Development segment grew 9% over Q3 FY15 to
$440.8 million in Q3 FY16, primarily driven by increased sales of
premium single-serve products. Also contributing to the increase were
higher foodservice sales and sales of packaged coffee.
Operating income of $187.8 million in Q3 FY16 increased 31% compared to
Q3 FY15. Operating margin increased 710 basis points to 42.6%, primarily
driven by lower coffee costs, decreased marketing spend, higher income
from the North American Coffee Partnership, and leverage on cost of
sales.
Q3 All Other Segments Results
|
|
|
Quarter Ended
|
|
|
|
($ in millions)
|
|
Jun 26, 2016
|
|
Jun 28, 2015
|
|
Change
|
|
Net New Stores
|
|
(6)
|
|
(3)
|
|
(3)
|
|
Revenues
|
|
$110.1
|
|
$115.6
|
|
(5)%
|
|
Operating Loss
|
|
$(14.9)
|
|
$(13.1)
|
|
14%
|
Year to Date Financial Results
|
|
|
Three Quarters Ended Jun 26, 2016
|
|
Comparable Store Sales(1)
|
|
Sales Growth
|
|
Change in Transactions
|
|
Change in Ticket
|
|
Consolidated(2)
|
|
6%
|
|
2%
|
|
4%
|
|
Americas
|
|
7%
|
|
2%
|
|
5%
|
|
CAP(2)
|
|
4%
|
|
2%
|
|
2%
|
|
EMEA
|
|
0%
|
|
1%
|
|
0%
|
(1) Includes only Starbucks company-operated stores open 13
months or longer.
(2) Beginning in December of fiscal 2016, comparable store
sales include the results of the 1,009 company-operated stores acquired
as part of the acquisition of Starbucks Japan in the first quarter of
fiscal 2015.
|
Operating Results
|
|
Three Quarters Ended
|
|
|
|
($ in millions, except per share amounts)
|
|
Jun 26, 2016
|
|
Jun 28, 2015
|
|
Change
|
|
Net New Stores
|
|
1,352
|
|
1,153
|
|
199
|
|
Revenues
|
|
$15,604.7
|
|
$14,247.9
|
|
10%
|
|
Operating Income
|
|
$2,944.5
|
|
$2,631.6
|
|
12%
|
|
Operating Margin
|
|
18.9%
|
|
18.5%
|
|
40 bps
|
|
EPS
|
|
$1.35
|
|
$1.39
|
|
(3)%
|
Fiscal 2016 Targets
Starbucks fiscal year 2016 will include an extra week in the fourth
quarter, because it is a 53-week year for the company.
The company reiterates the following FY16 targets, unless otherwise
noted. FY16 targets are based on actual FY15 non-GAAP results and
projected FY16 non-GAAP results as noted. Please refer to the
reconciliation of GAAP measures to non-GAAP measures at the end of this
release.
-
Now expecting approximately 1,900 net new store openings in the fiscal
year (from 1,800):
-
Americas: now expecting approximately 750, half licensed (from 700)
-
China/Asia Pacific: approximately 900, two-thirds licensed
-
EMEA: now expecting approximately 250, primarily licensed (from
200)
-
Full year consolidated revenue growth now expected to be approximately
10% on a 52 week basis (from 10%+), the 53rd week expected to add
approximately 2%
-
Full year global comparable store sales growth now expected to be
mid-single digits (from somewhat above mid-single digits)
-
FY16 operating margin is expected to increase slightly versus prior
year:
-
Americas: now expected to increase slightly over prior year (from
moderate improvement)
-
China/Asia Pacific: now expected to increase slightly over prior
year (from roughly flat)
-
EMEA: now expected to be flat to prior year (from approaching 15%)
-
Channel Development: now expect strong expansion versus prior year
(from moderate improvement)
-
Consolidated tax rate now expected to be approximately 33% (from 34%)
-
Full year FY16 earnings per share, including an estimated $0.06 for
the 53rd week in Q4:
-
GAAP EPS now expected to be in the range of $1.88 to $1.89 (up
from a range of $1.85 to $1.86 due to the gain on the sale of our
Germany retail operations in Q3 FY16)
-
Non-GAAP EPS in the range of $1.88 to $1.89 (reiterated)
-
Introduced - Q4 FY16 earnings per share, including an
estimated $0.06 for the 53rd week:
-
GAAP EPS in the range of $0.53 to $0.54
-
Non-GAAP EPS in the range of $0.54 to $0.55
-
Capital expenditures of approximately $1.4 billion
Company Updates
-
Earlier this month, Starbucks announced its role as global licensee
and investor in the Italian restaurant Princi, a renowned boutique
bakery and café with locations in Milan and London. The investment
team, which includes Milan-based Angel Lab and Pekepan Investments,
will focus on expanding the number of standalone Princi locations
worldwide as well as making Princi the exclusive food purveyor at the
new Starbucks ReserveTM Roastery and Tasting Rooms and in
Starbucks Reserve®-only stores as they open beginning in
2017.
-
The company rolled out mobile payment in China and Japan in recent
months, building on its rapidly expanding portfolio of digital
innovations in the region.
-
In July, the company made announcements that reflect its ongoing
commitment to invest in its partners (employees); developments apply
to certain populations of U.S. partners and include base pay
increases, enhancements to Bean Stock, an evolving health care
program, a commitment to scheduling consideration, and changes to
dress code.
-
Starbucks opened its first location in the Central European country of
Slovakia in May; in partnership with AmRest, a long term strategic
partner of the company and the largest independent operator of
restaurant chains in Central and Eastern Europe.
-
In June, the company opened a flagship location inside Disneytown at
the new Shanghai Disney Resort, representing its 12th Starbucks store
inside a Disney resort globally.
-
Anheuser-Busch and Starbucks announced in June that they are working
together to produce, bottle, distribute and market the first Teavana
Ready-to-Drink (RTD) tea in the U.S., with an anticipated product
launch in 2017.
-
The company announced Shanghai, China as the location of its first
international Starbucks Reserve Roastery and Tasting Room. Scheduled
to open in late 2017, the 30,000 square-foot space will reflect a
similar, immersive all-sensory experience as the company’s first
location, which debuted in its hometown of Seattle, Washington in 2014.
-
In May, Starbucks announced that it had closed an underwritten public
offering of senior notes, including the first U.S. Corporate
Sustainability Bond. The company will use the net proceeds from the
offering of $500 million in 2.450% Senior Notes due 2026 to enhance
its sustainability programs around coffee supply chain management
through Eligible Sustainability Projects.
-
The Board of Directors declared a cash dividend of $0.20 per share,
payable on August 19, 2016 to shareholders of record as of August 4,
2016.
Conference Call
Starbucks will hold a conference call today at 2:00 p.m. Pacific Time,
which will be hosted by Howard Schultz, chairman and ceo; Kevin Johnson,
president and coo; and Scott Maw, 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 Saturday,
August 20, 2016.
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 and potential of our business, operations and brand, our
innovation, growth and growth opportunities and related investments, our
strategic, operational and digital moves, our long term financial
targets, earnings per share, revenues, operating margins, capital
expenditures, tax rate, anticipated costs related to the integration of
Starbucks Japan, comparable store sales and transactions, and net new
stores. 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 material breaches of our
information technology systems to the extent we experience a material
breach, potential negative effects of incidents involving food-borne
illnesses, food tampering, food contamination or mislabeling, 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 September 27, 2015. 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
|
|
|
|
Jun 26,
2016
|
|
Jun 28,
2015
|
|
%
Change
|
|
Jun 26,
2016
|
|
Jun 28,
2015
|
|
|
|
|
|
|
|
|
|
|
|
As a % of total
net revenues
|
|
Net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Company-operated stores
|
|
$
|
4,181.6
|
|
|
$
|
3,915.0
|
|
|
6.8
|
%
|
|
79.8
|
%
|
|
80.2
|
%
|
|
Licensed stores
|
|
527.2
|
|
|
475.2
|
|
|
10.9
|
|
|
10.1
|
|
|
9.7
|
|
|
CPG, foodservice and other
|
|
529.2
|
|
|
491.0
|
|
|
7.8
|
|
|
10.1
|
|
|
10.1
|
|
|
Total net revenues
|
|
5,238.0
|
|
|
4,881.2
|
|
|
7.3
|
|
|
100.0
|
|
|
100.0
|
|
|
Cost of sales including occupancy costs
|
|
2,060.3
|
|
|
1,953.9
|
|
|
5.4
|
|
|
39.3
|
|
|
40.0
|
|
|
Store operating expenses
|
|
1,529.4
|
|
|
1,392.4
|
|
|
9.8
|
|
|
29.2
|
|
|
28.5
|
|
|
Other operating expenses
|
|
137.5
|
|
|
131.6
|
|
|
4.5
|
|
|
2.6
|
|
|
2.7
|
|
|
Depreciation and amortization expenses
|
|
247.6
|
|
|
236.5
|
|
|
4.7
|
|
|
4.7
|
|
|
4.8
|
|
|
General and administrative expenses
|
|
323.4
|
|
|
288.5
|
|
|
12.1
|
|
|
6.2
|
|
|
5.9
|
|
|
Total operating expenses
|
|
4,298.2
|
|
|
4,002.9
|
|
|
7.4
|
|
|
82.1
|
|
|
82.0
|
|
|
Income from equity investees
|
|
82.5
|
|
|
60.3
|
|
|
36.8
|
|
|
1.6
|
|
|
1.2
|
|
|
Operating income
|
|
1,022.3
|
|
|
938.6
|
|
|
8.9
|
|
|
19.5
|
|
|
19.2
|
|
|
Interest income and other, net
|
|
72.9
|
|
|
25.5
|
|
|
185.9
|
|
|
1.4
|
|
|
0.5
|
|
|
Interest expense
|
|
(21.8
|
)
|
|
(19.1
|
)
|
|
14.1
|
|
|
(0.4
|
)
|
|
(0.4
|
)
|
|
Earnings before income taxes
|
|
1,073.4
|
|
|
945.0
|
|
|
13.6
|
|
|
20.5
|
|
|
19.4
|
|
|
Income tax expense
|
|
318.9
|
|
|
318.5
|
|
|
0.1
|
|
|
6.1
|
|
|
6.5
|
|
|
Net earnings including noncontrolling interests
|
|
754.5
|
|
|
626.5
|
|
|
20.4
|
|
|
14.4
|
|
|
12.8
|
|
|
Net earnings/(loss) attributable to noncontrolling interests
|
|
0.4
|
|
|
(0.2
|
)
|
|
nm
|
|
—
|
|
|
—
|
|
|
Net earnings attributable to Starbucks
|
|
$
|
754.1
|
|
|
$
|
626.7
|
|
|
20.3
|
|
|
14.4
|
%
|
|
12.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per common share - diluted
|
|
$
|
0.51
|
|
|
$
|
0.41
|
|
|
24.4
|
%
|
|
|
|
|
|
Weighted avg. shares outstanding - diluted
|
|
1,479.3
|
|
|
1,515.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared per share
|
|
$
|
0.20
|
|
|
$
|
0.16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
Store operating expenses as a percentage of company-operated store
revenues
|
|
|
|
|
|
|
|
36.6
|
%
|
|
35.6
|
%
|
|
Effective tax rate including noncontrolling interests
|
|
|
|
|
|
|
|
29.7
|
%
|
|
33.7
|
%
|
|
|
|
|
|
Three Quarters Ended
|
|
Three Quarters Ended
|
|
|
|
Jun 26,
2016
|
|
Jun 28,
2015
|
|
%
Change
|
|
Jun 26,
2016
|
|
Jun 28,
2015
|
|
|
|
|
|
|
|
|
|
|
|
As a % of total
net revenues
|
|
Net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Company-operated stores
|
|
$
|
12,336.3
|
|
|
$
|
11,310.7
|
|
|
9.1
|
%
|
|
79.1
|
%
|
|
79.4
|
%
|
|
Licensed stores
|
|
1,561.0
|
|
|
1,380.5
|
|
|
13.1
|
|
|
10.0
|
|
|
9.7
|
|
|
CPG, foodservice and other
|
|
1,707.4
|
|
|
1,556.7
|
|
|
9.7
|
|
|
10.9
|
|
|
10.9
|
|
|
Total net revenues
|
|
15,604.7
|
|
|
14,247.9
|
|
|
9.5
|
|
|
100.0
|
|
|
100.0
|
|
|
Cost of sales including occupancy costs
|
|
6,256.9
|
|
|
5,804.9
|
|
|
7.8
|
|
|
40.1
|
|
|
40.7
|
|
|
Store operating expenses
|
|
4,502.0
|
|
|
4,032.5
|
|
|
11.6
|
|
|
28.9
|
|
|
28.3
|
|
|
Other operating expenses
|
|
423.3
|
|
|
394.5
|
|
|
7.3
|
|
|
2.7
|
|
|
2.8
|
|
|
Depreciation and amortization expenses
|
|
730.9
|
|
|
659.6
|
|
|
10.8
|
|
|
4.7
|
|
|
4.6
|
|
|
General and administrative expenses
|
|
959.4
|
|
|
892.8
|
|
|
7.5
|
|
|
6.1
|
|
|
6.3
|
|
|
Total operating expenses
|
|
12,872.5
|
|
|
11,784.3
|
|
|
9.2
|
|
|
82.5
|
|
|
82.7
|
|
|
Income from equity investees
|
|
212.3
|
|
|
168.0
|
|
|
26.4
|
|
|
1.4
|
|
|
1.2
|
|
|
Operating income
|
|
2,944.5
|
|
|
2,631.6
|
|
|
11.9
|
|
|
18.9
|
|
|
18.5
|
|
|
Gain resulting from acquisition of joint venture
|
|
—
|
|
|
390.6
|
|
|
(100.0
|
)
|
|
—
|
|
|
2.7
|
|
|
Interest income and other, net
|
|
95.5
|
|
|
36.6
|
|
|
160.9
|
|
|
0.6
|
|
|
0.3
|
|
|
Interest expense
|
|
(56.6
|
)
|
|
(52.3
|
)
|
|
8.2
|
|
|
(0.4
|
)
|
|
(0.4
|
)
|
|
Earnings before income taxes
|
|
2,983.4
|
|
|
3,006.5
|
|
|
(0.8
|
)
|
|
19.1
|
|
|
21.1
|
|
|
Income taxes
|
|
966.2
|
|
|
899.7
|
|
|
7.4
|
|
|
6.2
|
|
|
6.3
|
|
|
Net earnings including noncontrolling interests
|
|
2,017.2
|
|
|
2,106.8
|
|
|
(4.3
|
)
|
|
12.9
|
|
|
14.8
|
|
|
Net earnings attributable to noncontrolling interests
|
|
0.4
|
|
|
1.9
|
|
|
(78.9
|
)
|
|
—
|
|
|
—
|
|
|
Net earnings attributable to Starbucks
|
|
$
|
2,016.8
|
|
|
$
|
2,104.9
|
|
|
(4.2
|
)%
|
|
12.9
|
%
|
|
14.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per common share - diluted
|
|
$
|
1.35
|
|
|
$
|
1.39
|
|
|
(2.9
|
)%
|
|
|
|
|
|
Weighted avg. shares outstanding - diluted
|
|
1,489.7
|
|
|
1,516.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared per share
|
|
$
|
0.60
|
|
|
$
|
0.48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
Store operating expenses as a percentage of company-operated store
revenues
|
|
|
|
|
|
|
|
36.5
|
%
|
|
35.7
|
%
|
|
Effective tax rate including noncontrolling interests
|
|
|
|
|
|
|
|
32.4
|
%
|
|
29.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Results (in millions)
Americas
|
|
|
|
|
|
|
|
|
|
|
|
Jun 26,
2016
|
|
Jun 28,
2015
|
|
%
Change
|
|
Jun 26,
2016
|
|
Jun 28,
2015
|
|
Quarter Ended
|
|
|
|
|
|
|
As a % of Americas
total net revenues
|
|
Net revenues:
|
|
|
|
|
|
|
|
|
|
|
Company-operated stores
|
$
|
3,269.0
|
|
|
$
|
3,061.3
|
|
|
6.8
|
%
|
|
89.7
|
%
|
|
89.7
|
%
|
|
Licensed stores
|
368.6
|
|
|
344.9
|
|
|
6.9
|
|
|
10.1
|
|
|
10.1
|
|
|
Foodservice and other
|
7.9
|
|
|
8.4
|
|
|
(6.0
|
)
|
|
0.2
|
|
|
0.2
|
|
|
Total net revenues
|
3,645.5
|
|
|
3,414.6
|
|
|
6.8
|
|
|
100.0
|
|
|
100.0
|
|
|
Cost of sales including occupancy costs
|
1,289.0
|
|
|
1,227.7
|
|
|
5.0
|
|
|
35.4
|
|
|
36.0
|
|
|
Store operating expenses
|
1,236.1
|
|
|
1,126.7
|
|
|
9.7
|
|
|
33.9
|
|
|
33.0
|
|
|
Other operating expenses
|
25.4
|
|
|
26.9
|
|
|
(5.6
|
)
|
|
0.7
|
|
|
0.8
|
|
|
Depreciation and amortization expenses
|
149.2
|
|
|
130.8
|
|
|
14.1
|
|
|
4.1
|
|
|
3.8
|
|
|
General and administrative expenses
|
47.3
|
|
|
47.2
|
|
|
0.2
|
|
|
1.3
|
|
|
1.4
|
|
|
Total operating expenses
|
2,747.0
|
|
|
2,559.3
|
|
|
7.3
|
|
|
75.4
|
|
|
75.0
|
|
|
Operating income
|
$
|
898.5
|
|
|
$
|
855.3
|
|
|
5.1
|
%
|
|
24.6
|
%
|
|
25.0
|
%
|
|
Supplemental Ratios:
|
|
|
|
|
|
|
|
|
|
|
Store operating expenses as a percentage of company-operated store
revenues
|
|
|
|
|
|
|
37.8
|
%
|
|
36.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Quarters Ended
|
|
|
|
|
|
|
|
|
|
|
Net revenues:
|
|
|
|
|
|
|
|
|
|
|
Company-operated stores
|
$
|
9,697.2
|
|
|
$
|
8,890.5
|
|
|
9.1
|
%
|
|
89.6
|
%
|
|
89.7
|
%
|
|
Licensed stores
|
1,108.0
|
|
|
993.0
|
|
|
11.6
|
|
|
10.2
|
|
|
10.0
|
|
|
Foodservice and other
|
22.0
|
|
|
26.0
|
|
|
(15.4
|
)
|
|
0.2
|
|
|
0.3
|
|
|
Total net revenues
|
10,827.2
|
|
|
9,909.5
|
|
|
9.3
|
|
|
100.0
|
|
|
100.0
|
|
|
Cost of sales including occupancy costs
|
3,865.9
|
|
|
3,624.4
|
|
|
6.7
|
|
|
35.7
|
|
|
36.6
|
|
|
Store operating expenses
|
3,649.6
|
|
|
3,276.1
|
|
|
11.4
|
|
|
33.7
|
|
|
33.1
|
|
|
Other operating expenses
|
85.7
|
|
|
93.4
|
|
|
(8.2
|
)
|
|
0.8
|
|
|
0.9
|
|
|
Depreciation and amortization expenses
|
441.6
|
|
|
386.5
|
|
|
14.3
|
|
|
4.1
|
|
|
3.9
|
|
|
General and administrative expenses
|
139.3
|
|
|
146.6
|
|
|
(5.0
|
)
|
|
1.3
|
|
|
1.5
|
|
|
Total operating expenses
|
8,182.1
|
|
|
7,527.0
|
|
|
8.7
|
|
|
75.6
|
|
|
76.0
|
|
|
Operating income
|
$
|
2,645.1
|
|
|
$
|
2,382.5
|
|
|
11.0
|
%
|
|
24.4
|
%
|
|
24.0
|
%
|
|
Supplemental Ratios:
|
|
|
|
|
|
|
|
|
|
|
Store operating expenses as a percentage of company-operated store
revenues
|
|
|
|
|
|
|
37.6
|
%
|
|
36.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
China/Asia Pacific (CAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jun 26,
2016
|
|
Jun 28,
2015
|
|
%
Change
|
|
Jun 26,
2016
|
|
Jun 28,
2015
|
|
Quarter Ended
|
|
|
|
|
|
|
|
As a % of CAP
total net revenues
|
|
Net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Company-operated stores
|
|
$
|
695.4
|
|
|
$
|
588.4
|
|
|
18.2
|
%
|
|
90.5
|
%
|
|
90.1
|
%
|
|
Licensed stores
|
|
71.6
|
|
|
63.1
|
|
|
13.5
|
|
|
9.3
|
|
|
9.7
|
|
|
Foodservice and other
|
|
1.2
|
|
|
1.2
|
|
|
—
|
|
|
0.2
|
|
|
0.2
|
|
|
Total net revenues
|
|
768.2
|
|
|
652.7
|
|
|
17.7
|
|
|
100.0
|
|
|
100.0
|
|
|
Cost of sales including occupancy costs
|
|
331.2
|
|
|
281.8
|
|
|
17.5
|
|
|
43.1
|
|
|
43.2
|
|
|
Store operating expenses
|
|
200.4
|
|
|
161.2
|
|
|
24.3
|
|
|
26.1
|
|
|
24.7
|
|
|
Other operating expenses
|
|
16.2
|
|
|
15.8
|
|
|
2.5
|
|
|
2.1
|
|
|
2.4
|
|
|
Depreciation and amortization expenses
|
|
45.7
|
|
|
41.2
|
|
|
10.9
|
|
|
5.9
|
|
|
6.3
|
|
|
General and administrative expenses
|
|
32.1
|
|
|
30.3
|
|
|
5.9
|
|
|
4.2
|
|
|
4.6
|
|
|
Total operating expenses
|
|
625.6
|
|
|
530.3
|
|
|
18.0
|
|
|
81.4
|
|
|
81.2
|
|
|
Income from equity investees
|
|
40.2
|
|
|
27.6
|
|
|
45.7
|
|
|
5.2
|
|
|
4.2
|
|
|
Operating income
|
|
$
|
182.8
|
|
|
$
|
150.0
|
|
|
21.9
|
%
|
|
23.8
|
%
|
|
23.0
|
%
|
|
Supplemental Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
Store operating expenses as a percentage of company-operated store
revenues
|
|
|
|
|
|
|
|
28.8
|
%
|
|
27.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Quarters Ended
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Company-operated stores
|
|
$
|
1,884.0
|
|
|
$
|
1,542.5
|
|
|
22.1
|
%
|
|
89.7
|
%
|
|
88.5
|
%
|
|
Licensed stores
|
|
210.7
|
|
|
197.6
|
|
|
6.6
|
|
|
10.0
|
|
|
11.3
|
|
|
Foodservice and other
|
|
4.9
|
|
|
3.5
|
|
|
40.0
|
|
|
0.2
|
|
|
0.2
|
|
|
Total net revenues
|
|
2,099.6
|
|
|
1,743.6
|
|
|
20.4
|
|
|
100.0
|
|
|
100.0
|
|
|
Cost of sales including occupancy costs
|
|
933.5
|
|
|
784.8
|
|
|
18.9
|
|
|
44.5
|
|
|
45.0
|
|
|
Store operating expenses
|
|
558.0
|
|
|
436.0
|
|
|
28.0
|
|
|
26.6
|
|
|
25.0
|
|
|
Other operating expenses
|
|
48.3
|
|
|
43.4
|
|
|
11.3
|
|
|
2.3
|
|
|
2.5
|
|
|
Depreciation and amortization expenses
|
|
131.7
|
|
|
106.3
|
|
|
23.9
|
|
|
6.3
|
|
|
6.1
|
|
|
General and administrative expenses
|
|
93.2
|
|
|
88.4
|
|
|
5.4
|
|
|
4.4
|
|
|
5.1
|
|
|
Total operating expenses
|
|
1,764.7
|
|
|
1,458.9
|
|
|
21.0
|
|
|
84.0
|
|
|
83.7
|
|
|
Income from equity investees
|
|
104.3
|
|
|
85.8
|
|
|
21.6
|
|
|
5.0
|
|
|
4.9
|
|
|
Operating income
|
|
$
|
439.2
|
|
|
$
|
370.5
|
|
|
18.5
|
%
|
|
20.9
|
%
|
|
21.2
|
%
|
|
Supplemental Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
Store operating expenses as a percentage of company-operated store
revenues
|
|
|
|
|
|
|
|
29.6
|
%
|
|
28.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jun 26,
2016
|
|
Jun 28,
2015
|
|
%
Change
|
|
Jun 26,
2016
|
|
Jun 28,
2015
|
|
Quarter Ended
|
|
|
|
|
|
|
|
As a % of EMEA
total net revenues
|
|
Net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Company-operated stores
|
|
$
|
174.3
|
|
|
$
|
217.8
|
|
|
(20.0
|
)%
|
|
63.8
|
%
|
|
73.9
|
%
|
|
Licensed stores
|
|
86.2
|
|
|
65.5
|
|
|
31.6
|
|
|
31.5
|
|
|
22.2
|
|
|
Foodservice
|
|
12.9
|
|
|
11.4
|
|
|
13.2
|
|
|
4.7
|
|
|
3.9
|
|
|
Total net revenues
|
|
273.4
|
|
|
294.7
|
|
|
(7.2
|
)
|
|
100.0
|
|
|
100.0
|
|
|
Cost of sales including occupancy costs
|
|
139.2
|
|
|
143.1
|
|
|
(2.7
|
)
|
|
50.9
|
|
|
48.6
|
|
|
Store operating expenses
|
|
69.0
|
|
|
78.4
|
|
|
(12.0
|
)
|
|
25.2
|
|
|
26.6
|
|
|
Other operating expenses
|
|
13.4
|
|
|
12.9
|
|
|
3.9
|
|
|
4.9
|
|
|
4.4
|
|
|
Depreciation and amortization expenses
|
|
10.3
|
|
|
12.4
|
|
|
(16.9
|
)
|
|
3.8
|
|
|
4.2
|
|
|
General and administrative expenses
|
|
11.6
|
|
|
12.8
|
|
|
(9.4
|
)
|
|
4.2
|
|
|
4.3
|
|
|
Total operating expenses
|
|
243.5
|
|
|
259.6
|
|
|
(6.2
|
)
|
|
89.1
|
|
|
88.1
|
|
|
Income from equity investees
|
|
—
|
|
|
0.9
|
|
|
(100.0
|
)
|
|
—
|
|
|
0.3
|
|
|
Operating income
|
|
$
|
29.9
|
|
|
$
|
36.0
|
|
|
(16.9
|
)%
|
|
10.9
|
%
|
|
12.2
|
%
|
|
Supplemental Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
Store operating expenses as a percentage of company-operated store
revenues
|
|
|
|
|
|
|
|
39.6
|
%
|
|
36.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Quarters Ended
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Company-operated stores
|
|
$
|
576.0
|
|
|
$
|
688.0
|
|
|
(16.3
|
)%
|
|
67.4
|
%
|
|
75.7
|
%
|
|
Licensed stores
|
|
239.3
|
|
|
185.4
|
|
|
29.1
|
|
|
28.0
|
|
|
20.4
|
|
|
Foodservice
|
|
39.4
|
|
|
35.0
|
|
|
12.6
|
|
|
4.6
|
|
|
3.9
|
|
|
Total net revenues
|
|
854.7
|
|
|
908.4
|
|
|
(5.9
|
)
|
|
100.0
|
|
|
100.0
|
|
|
Cost of sales including occupancy costs
|
|
427.2
|
|
|
434.4
|
|
|
(1.7
|
)
|
|
50.0
|
|
|
47.8
|
|
|
Store operating expenses
|
|
209.4
|
|
|
240.4
|
|
|
(12.9
|
)
|
|
24.5
|
|
|
26.5
|
|
|
Other operating expenses
|
|
42.0
|
|
|
40.0
|
|
|
5.0
|
|
|
4.9
|
|
|
4.4
|
|
|
Depreciation and amortization expenses
|
|
32.4
|
|
|
38.9
|
|
|
(16.7
|
)
|
|
3.8
|
|
|
4.3
|
|
|
General and administrative expenses
|
|
39.4
|
|
|
41.6
|
|
|
(5.3
|
)
|
|
4.6
|
|
|
4.6
|
|
|
Total operating expenses
|
|
750.4
|
|
|
795.3
|
|
|
(5.6
|
)
|
|
87.8
|
|
|
87.5
|
|
|
Income from equity investees
|
|
1.5
|
|
|
2.1
|
|
|
(28.6
|
)
|
|
0.2
|
|
|
0.2
|
|
|
Operating income
|
|
$
|
105.8
|
|
|
$
|
115.2
|
|
|
(8.2
|
)%
|
|
12.4
|
%
|
|
12.7
|
%
|
|
Supplemental Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
Store operating expenses as a percentage of company-operated store
revenues
|
|
|
|
|
|
|
|
36.4
|
%
|
|
34.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Channel Development
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jun 26,
2016
|
|
Jun 28,
2015
|
|
%
Change
|
|
Jun 26,
2016
|
|
Jun 28,
2015
|
|
Quarter Ended
|
|
|
|
|
|
|
|
As a % of
Channel Development
total net
revenues
|
|
Net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
CPG
|
|
$
|
333.0
|
|
|
$
|
302.2
|
|
|
10.2
|
%
|
|
75.5
|
%
|
|
74.9
|
%
|
|
Foodservice
|
|
107.8
|
|
|
101.4
|
|
|
6.3
|
|
|
24.5
|
|
|
25.1
|
|
|
Total net revenues
|
|
440.8
|
|
|
403.6
|
|
|
9.2
|
|
|
100.0
|
|
|
100.0
|
|
|
Cost of sales
|
|
232.3
|
|
|
228.3
|
|
|
1.8
|
|
|
52.7
|
|
|
56.6
|
|
|
Other operating expenses
|
|
58.0
|
|
|
58.9
|
|
|
(1.5
|
)
|
|
13.2
|
|
|
14.6
|
|
|
Depreciation and amortization expenses
|
|
0.7
|
|
|
0.7
|
|
|
—
|
|
|
0.2
|
|
|
0.2
|
|
|
General and administrative expenses
|
|
4.3
|
|
|
4.1
|
|
|
4.9
|
|
|
1.0
|
|
|
1.0
|
|
|
Total operating expenses
|
|
295.3
|
|
|
292.0
|
|
|
1.1
|
|
|
67.0
|
|
|
72.3
|
|
|
Income from equity investees
|
|
42.3
|
|
|
31.8
|
|
|
33.0
|
|
|
9.6
|
|
|
7.9
|
|
|
Operating income
|
|
$
|
187.8
|
|
|
$
|
143.4
|
|
|
31.0
|
%
|
|
42.6
|
%
|
|
35.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Quarters Ended
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
CPG
|
|
$
|
1,086.5
|
|
|
$
|
975.8
|
|
|
11.3
|
%
|
|
76.8
|
%
|
|
76.6
|
%
|
|
Foodservice
|
|
327.5
|
|
|
298.4
|
|
|
9.8
|
|
|
23.2
|
|
|
23.4
|
|
|
Total net revenues
|
|
1,414.0
|
|
|
1,274.2
|
|
|
11.0
|
|
|
100.0
|
|
|
100.0
|
|
|
Cost of sales
|
|
770.6
|
|
|
722.2
|
|
|
6.7
|
|
|
54.5
|
|
|
56.7
|
|
|
Other operating expenses
|
|
171.8
|
|
|
160.9
|
|
|
6.8
|
|
|
12.1
|
|
|
12.6
|
|
|
Depreciation and amortization expenses
|
|
2.1
|
|
|
2.0
|
|
|
5.0
|
|
|
0.1
|
|
|
0.2
|
|
|
General and administrative expenses
|
|
13.0
|
|
|
12.5
|
|
|
4.0
|
|
|
0.9
|
|
|
1.0
|
|
|
Total operating expenses
|
|
957.5
|
|
|
897.6
|
|
|
6.7
|
|
|
67.7
|
|
|
70.4
|
|
|
Income from equity investees
|
|
106.5
|
|
|
80.1
|
|
|
33.0
|
|
|
7.5
|
|
|
6.3
|
|
|
Operating income
|
|
$
|
563.0
|
|
|
$
|
456.7
|
|
|
23.3
|
%
|
|
39.8
|
%
|
|
35.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other Segments
|
|
|
|
|
|
|
|
|
|
Jun 26,
2016
|
|
Jun 28,
2015
|
|
%
Change
|
|
|
|
|
Quarter Ended
|
|
|
|
|
|
|
|
Net revenues:
|
|
|
|
|
|
|
|
Company-operated stores
|
|
$
|
42.9
|
|
|
$
|
47.5
|
|
|
(9.7
|
)%
|
|
Licensed stores
|
|
0.8
|
|
|
1.7
|
|
|
(52.9
|
)
|
|
CPG, foodservice and other
|
|
66.4
|
|
|
66.4
|
|
|
—
|
|
|
Total net revenues
|
|
110.1
|
|
|
115.6
|
|
|
(4.8
|
)
|
|
Cost of sales including occupancy costs
|
|
68.3
|
|
|
72.7
|
|
|
(6.1
|
)
|
|
Store operating expenses
|
|
23.9
|
|
|
26.1
|
|
|
(8.4
|
)
|
|
Other operating expenses
|
|
24.3
|
|
|
17.3
|
|
|
40.5
|
|
|
Depreciation and amortization expenses
|
|
3.1
|
|
|
4.3
|
|
|
(27.9
|
)
|
|
General and administrative expenses
|
|
5.4
|
|
|
8.3
|
|
|
(34.9
|
)
|
|
Total operating expenses
|
|
125.0
|
|
|
128.7
|
|
|
(2.9
|
)
|
|
Operating loss
|
|
$
|
(14.9
|
)
|
|
$
|
(13.1
|
)
|
|
13.7
|
%
|
|
|
|
|
|
|
|
|
|
Three Quarters Ended
|
|
|
|
|
|
|
|
Net revenues:
|
|
|
|
|
|
|
|
Company-operated stores
|
|
$
|
179.1
|
|
|
$
|
189.7
|
|
|
(5.6
|
)%
|
|
Licensed stores
|
|
3.0
|
|
|
4.5
|
|
|
(33.3
|
)
|
|
CPG, foodservice and other
|
|
227.1
|
|
|
218.0
|
|
|
4.2
|
|
|
Total net revenues
|
|
409.2
|
|
|
412.2
|
|
|
(0.7
|
)
|
|
Cost of sales including occupancy costs
|
|
246.7
|
|
|
242.5
|
|
|
1.7
|
|
|
Store operating expenses
|
|
85.0
|
|
|
80.0
|
|
|
6.3
|
|
|
Other operating expenses
|
|
75.3
|
|
|
57.1
|
|
|
31.9
|
|
|
Depreciation and amortization expenses
|
|
10.1
|
|
|
12.2
|
|
|
(17.2
|
)
|
|
General and administrative expenses
|
|
20.2
|
|
|
27.2
|
|
|
(25.7
|
)
|
|
Total operating expenses
|
|
437.3
|
|
|
419.0
|
|
|
4.4
|
|
|
Operating loss
|
|
$
|
(28.1
|
)
|
|
$
|
(6.8
|
)
|
|
313.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Information
The following supplemental information is provided for historical and
comparative purposes.
U.S. Supplemental Data
|
|
|
Quarter Ended
|
|
|
|
($ in millions)
|
|
Jun 26, 2016
|
|
Jun 28, 2015
|
|
Change
|
|
Revenues
|
|
$3,327.1
|
|
$3,091.0
|
|
8%
|
|
Comparable Store Sales Growth(1)
|
|
4%
|
|
8%
|
|
|
|
Change in Transactions
|
|
0%
|
|
4%
|
|
|
|
Change in Ticket
|
|
4%
|
|
4%
|
|
|
(1) Includes only Starbucks company-operated stores open 13
months or longer.
Store Data
|
|
|
Net stores opened/(closed) and transferred during the period
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Three Quarters Ended
|
|
Stores open as of
|
|
|
|
Jun 26,
2016
|
|
Jun 28,
2015
|
|
Jun 26,
2016
|
|
Jun 28,
2015
|
|
Jun 26,
2016
|
|
Jun 28,
2015
|
|
Americas(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company-operated stores
|
|
85
|
|
|
68
|
|
|
204
|
|
|
187
|
|
|
8,875
|
|
|
8,582
|
|
Licensed stores
|
|
109
|
|
|
103
|
|
|
293
|
|
|
192
|
|
|
6,425
|
|
|
5,988
|
|
Total Americas
|
|
194
|
|
|
171
|
|
|
497
|
|
|
379
|
|
|
15,300
|
|
|
14,570
|
|
China/Asia Pacific(2):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company-operated stores
|
|
79
|
|
|
82
|
|
|
223
|
|
|
1,219
|
|
|
2,675
|
|
|
2,351
|
|
Licensed stores
|
|
130
|
|
|
123
|
|
|
442
|
|
|
(604
|
)
|
|
3,452
|
|
|
2,888
|
|
Total China/Asia Pacific
|
|
209
|
|
|
205
|
|
|
665
|
|
|
615
|
|
|
6,127
|
|
|
5,239
|
|
EMEA(3):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company-operated stores
|
|
(147
|
)
|
|
(9
|
)
|
|
(196
|
)
|
|
(33
|
)
|
|
541
|
|
|
784
|
|
Licensed stores
|
|
224
|
|
|
67
|
|
|
399
|
|
|
184
|
|
|
2,024
|
|
|
1,507
|
|
Total EMEA
|
|
77
|
|
|
58
|
|
|
203
|
|
|
151
|
|
|
2,565
|
|
|
2,291
|
|
All Other Segments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company-operated stores
|
|
(5
|
)
|
|
(1
|
)
|
|
(10
|
)
|
|
9
|
|
|
365
|
|
|
378
|
|
Licensed stores
|
|
(1
|
)
|
|
(2
|
)
|
|
(3
|
)
|
|
(1
|
)
|
|
38
|
|
|
41
|
|
Total All Other Segments
|
|
(6
|
)
|
|
(3
|
)
|
|
(13
|
)
|
|
8
|
|
|
403
|
|
|
419
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Company
|
|
474
|
|
|
431
|
|
|
1,352
|
|
|
1,153
|
|
|
24,395
|
|
|
22,519
|
(1) Americas store data includes the closure of 132 Target
Canada licensed stores in the second quarter of fiscal 2015.
(2) China/Asia Pacific store data includes the transfer of
1,009 Japan stores from licensed stores to company-operated as a result
of the acquisition of Starbucks Japan in the first quarter of fiscal
2015.
(3) EMEA store data includes the transfer of 144 Germany
company-operated retail stores to licensed stores as a result of the
sale to AmRest Holdings SE in the third quarter of fiscal 2016.
Non-GAAP Disclosure
In addition to the GAAP results provided in this release, the company
provides consolidated non-GAAP operating income, consolidated non-GAAP
operating margin and consolidated non-GAAP earnings per share ("non-GAAP
EPS") for Q3 fiscal 2016 and fiscal 2015; China/Asia Pacific (“CAP”)
segment non-GAAP operating income and non-GAAP operating margin for Q3
fiscal 2016 and fiscal 2015; Europe, Middle East, and Africa (“EMEA”)
segment non-GAAP operating income and non-GAAP operating margin for Q3
fiscal 2016 and fiscal 2015; and consolidated non-GAAP EPS for Q4 and
full year fiscal 2015, as well as projected consolidated non-GAAP EPS
for Q4 and full year fiscal 2016. These non-GAAP financial measures are
not in accordance with, or alternatives for, generally accepted
accounting principles in the United States. 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. The company’s management
believes that providing these non-GAAP financial measures better enables
investors to understand and evaluate the company’s historical and
prospective operating performance.
The consolidated Q3 fiscal 2016 as well as the consolidated Q3 fiscal
2015 non-GAAP financial measures exclude certain Starbucks Japan
acquisition-related items, specifically amortization expense from
acquired intangible assets and transaction and integration costs. The
consolidated Q3 fiscal 2016 non-GAAP operating income and non-GAAP
operating margin financial measures also exclude divestiture-related
costs related to the sale of the German retail operations. The
consolidated Q3 fiscal 2016 non-GAAP EPS financial measure also excludes
a gain on sale of the German retail operations, which is net of
divestiture-related costs, and an incremental tax benefit related to
prior fiscal years for a U.S. manufacturing deduction. The Q3 fiscal
2016 and fiscal 2015 CAP segment non-GAAP financial measures exclude the
amortization expense from acquired intangible assets related to the
acquisition of Starbucks Japan. The Q3 fiscal 2016 CAP segment non-GAAP
financial measures also exclude integration costs, such as incremental
information technology and compensation-related costs associated with
the acquisition. The Q3 fiscal 2016 EMEA segment non-GAAP financial
measures exclude divestiture-related costs related to the sale of the
German retail operations. The consolidated Q4 and full year fiscal 2015
non-GAAP EPS financial measures exclude the Starbucks Japan
acquisition-related items, losses and costs related to the redemption of
the company's $550 million of 6.250% 2017 Senior Notes and an
incremental tax benefit related to a U.S. manufacturing deduction.
Losses and costs related to the redemption of the company's $550 million
of 6.250% 2017 Senior Notes are included as debt extinguishment-related
items. The consolidated full year fiscal 2015 non-GAAP EPS financial
measure also excludes a gain resulting from a fair value adjustment of
Starbucks preexisting 39.5% ownership interest in Starbucks Japan prior
to the acquisition. Management excludes the acquisition-related
transaction costs as well as the divestiture-related costs described
above because they believe 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 believes it is
useful to exclude the Starbucks Japan integration costs and the
amortization of the acquired intangible assets when evaluating
performance because they 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 amortization was fixed at the time of
acquisition and generally cannot subsequently be changed or influenced
by management in a future period. Management excludes the Starbucks
Japan fair value gain, debt extinguishment-related items, gain on sale
of the German retail operations and the incremental tax benefits because
they believe these items do not reflect future gains, losses, costs or
tax benefits and do not contribute to a meaningful evaluation of the
company’s fiscal 2016 or fiscal 2015 operating performance or
comparisons of the company’s fiscal 2016 or fiscal 2015 operating
performance to the company’s past or future operating performance.
The projected consolidated non-GAAP EPS for Q4 and full year fiscal 2016
financial measures exclude certain Starbucks Japan acquisition-related
items comprised of projected amortization expense from acquired
intangible assets and transaction and integration costs. The projected
full year fiscal 2016 financial measure also excludes the net gain on
sale of the German retail operations and incremental tax benefit related
to prior years for a U.S. manufacturing deduction. Management is
excluding these items from our projected non-GAAP financial measures for
the same reasons described above.
These non-GAAP financial measures may have limitations as analytical
tools, and these measures should not be considered in isolation or as a
substitute for analysis of the company’s results as reported under GAAP.
Other companies may calculate these non-GAAP financial measures
differently than the company does, limiting the usefulness of those
measures for comparative purposes.
|
STARBUCKS CORPORATION
|
|
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
|
|
|
Jun 26,
2016
|
|
Jun 28,
2015
|
|
Change
|
|
Consolidated
|
|
|
|
|
|
|
|
Operating income, as reported (GAAP)
|
|
$
|
1,022.3
|
|
|
$
|
938.6
|
|
|
8.9%
|
|
Starbucks Japan acquisition-related items - other(1)
|
|
14.5
|
|
|
11.5
|
|
|
|
|
Costs incurred on sale of Germany retail operations
|
|
2.8
|
|
|
—
|
|
|
|
|
Non-GAAP operating income
|
|
$
|
1,039.6
|
|
|
$
|
950.1
|
|
|
9.4%
|
|
|
|
|
|
|
|
|
|
Operating margin, as reported (GAAP)
|
|
19.5
|
%
|
|
19.2
|
%
|
|
30 bps
|
|
Starbucks Japan acquisition-related items - other(1)
|
|
0.3
|
|
|
0.2
|
|
|
|
|
Costs incurred on sale of Germany retail operations
|
|
0.1
|
|
|
—
|
|
|
|
|
Non-GAAP operating margin
|
|
19.8
|
%
|
|
19.5
|
%
|
|
30 bps
|
|
|
|
|
|
|
|
|
|
Diluted net earnings per share, as reported (GAAP)
|
|
$
|
0.51
|
|
|
$
|
0.41
|
|
|
24.4%
|
|
Starbucks Japan acquisition-related items - other(1)
|
|
0.01
|
|
|
0.01
|
|
|
|
|
Gain on sale of Germany retail operations(2)
|
|
(0.02
|
)
|
|
—
|
|
|
|
|
Income tax effect on Non-GAAP adjustments(3)
|
|
—
|
|
|
—
|
|
|
|
|
Other tax matters(4)
|
|
(0.01
|
)
|
|
—
|
|
|
|
|
Non-GAAP net earnings per share
|
|
$
|
0.49
|
|
|
$
|
0.42
|
|
|
16.7%
|
|
|
|
|
|
|
|
|
|
China/Asia Pacific (CAP)
|
|
|
|
|
|
|
|
Operating income, as reported (GAAP)
|
|
$
|
182.8
|
|
|
$
|
150.0
|
|
|
21.9%
|
|
Starbucks Japan acquisition-related items(5)
|
|
13.8
|
|
|
11.0
|
|
|
|
|
Non-GAAP operating income
|
|
$
|
196.6
|
|
|
$
|
161.0
|
|
|
22.1%
|
|
|
|
|
|
|
|
|
|
Operating margin, as reported (GAAP)
|
|
23.8
|
%
|
|
23.0
|
%
|
|
80 bps
|
|
Starbucks Japan acquisition-related items(5)
|
|
1.8
|
|
|
1.7
|
|
|
|
|
Non-GAAP operating margin
|
|
25.6
|
%
|
|
24.7
|
%
|
|
90 bps
|
|
|
|
|
|
|
|
|
|
EMEA
|
|
|
|
|
|
|
|
Operating income, as reported (GAAP)
|
|
$
|
29.9
|
|
|
$
|
36.0
|
|
|
(16.9)%
|
|
Costs incurred on sale of Germany retail operations
|
|
2.8
|
|
|
—
|
|
|
|
|
Non-GAAP operating income
|
|
$
|
32.7
|
|
|
$
|
36.0
|
|
|
(9.2)%
|
|
|
|
|
|
|
|
|
|
Operating margin, as reported (GAAP)
|
|
10.9
|
%
|
|
12.2
|
%
|
|
(130) bps
|
|
Costs incurred on sale of Germany retail operations
|
|
1.0
|
|
|
—
|
|
|
|
|
Non-GAAP operating margin
|
|
12.0
|
%
|
|
12.2
|
%
|
|
(20) 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) The gain is net of certain costs associated with the
transfer of Germany company-operated retail stores to licensed stores;
these costs are also adjusted for in our Consolidated and EMEA operating
income and operating margin results.
(3) Income tax effect on Non-GAAP adjustments was determined
based on the nature of the underlying items and their relevant
jurisdictional tax rates.
(4) Other tax matters include incremental benefit from
additional domestic manufacturing deductions claimed in our U.S.
consolidated tax returns for periods prior to FY16.
(5) Includes ongoing amortization expense of acquired
intangible assets associated with the acquisition; Q3 FY16 also includes
post-acquisition integration costs, including incremental IT and
compensation-related costs.
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
|
|
|
Oct 2,
2016
|
|
Sep 27,
2015
|
|
|
|
Consolidated
|
|
(Projected
14-weeks)
|
|
(As Reported
13-weeks)
|
|
Change
|
|
Diluted net earnings per share (GAAP)
|
|
$0.53 - $0.54
|
|
|
$
|
0.43
|
|
|
23% - 26%
|
|
Starbucks Japan acquisition-related items - other(1)
|
|
0.01
|
|
|
0.01
|
|
|
|
|
Debt extinguishment-related items(2)
|
|
—
|
|
|
0.04
|
|
|
|
|
Income tax effect on Non-GAAP adjustments(3)
|
|
(0.01
|
)
|
|
(0.02
|
)
|
|
|
|
Other tax matters(4)
|
|
—
|
|
|
(0.04
|
)
|
|
|
|
Non-GAAP net earnings per share
|
|
$0.54 - $0.55
|
|
|
$
|
0.43
|
|
|
26% - 28%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
|
|
|
|
|
|
Oct 2,
2016
|
|
Sep 27,
2015
|
|
|
|
Consolidated
|
|
(Projected
53-weeks)
|
|
(As Reported
52-weeks)
|
|
Change
|
|
Diluted net earnings per share (GAAP)
|
|
$1.88 - $1.89
|
|
|
$
|
1.82
|
|
|
3% - 4%
|
|
Starbucks Japan acquisition-related items - gain(5)
|
|
—
|
|
|
(0.26
|
)
|
|
|
|
Starbucks Japan acquisition-related items - other(1)
|
|
0.04
|
|
|
0.04
|
|
|
|
|
Debt extinguishment-related items(2)
|
|
—
|
|
|
0.04
|
|
|
|
|
Gain on sale of Germany retail operations(6)
|
|
(0.02
|
)
|
|
—
|
|
|
|
|
Income tax effect on Non-GAAP adjustments(3)
|
|
(0.01
|
)
|
|
(0.02
|
)
|
|
|
|
Other tax matters(4)
|
|
(0.01
|
)
|
|
(0.04
|
)
|
|
|
|
Non-GAAP net earnings per share
|
|
$1.88 - $1.89
|
|
|
$
|
1.58
|
|
|
19% - 20%
|
(1) Includes ongoing amortization expense of acquired
intangible assets and transaction and integration costs, such as
incremental IT and compensation-related costs associated with the
acquisition.
(2) Represents the loss on extinguishment of debt ($61.1M),
which is comprised of the cost of the optional redemption provision,
unamortized debt issuance costs, and unamortized discount associated
with the $550 million of 6.250% 2017 Senior Notes redeemed in Q4 FY15,
as well as the related unamortized interest rate hedge loss ($2.0M),
which was recorded in interest expense.
(3) Income tax effect on Non-GAAP adjustments was determined
based on the nature of the underlying items and their relevant
jurisdictional tax rates.
(4) Other tax matters include the incremental benefit from
additional domestic manufacturing deductions claimed in our U.S.
consolidated tax returns for periods prior to the years presented.
(5) Gain represents the fair value adjustment of Starbucks
preexisting 39.5% ownership interest in Starbucks Japan upon
acquisition, which was almost entirely non-taxable.
(6) The gain is net of certain costs associated with the
transfer of Germany company-operated retail stores to licensed stores in
Q3 FY16.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160721006293/en/
Source: Starbucks Corporation
Starbucks Contact, Investor Relations:
Durga Doraisamy,
206-318-7118
investorrelations@starbucks.com
or
Starbucks
Contact, Media:
Alisha Damodaran, 206-318-7100
press@starbucks.com