Q4 GAAP Earnings Per Share of $0.54; Non-GAAP Earnings Per Share
Increases to $0.55
Q4 Global and U.S. Comps Up 2%, Up 3% adjusted for Hurricane Impact;
China Up 8%; Global Traffic Up 1%
Board Approves 20% Increase in Quarterly Dividend, to $0.30 Per Share
Company Commits to Returning $15 Billion to Shareholders Over Next 3
Years; Updates Long Term Financial Targets
SEATTLE--(BUSINESS WIRE)--
Starbucks Corporation (NASDAQ: SBUX) today reported financial results
for its 13-week fiscal fourth quarter and 52-week fiscal year ended
October 1, 2017. Note that fiscal 2016 contained an extra week in the
fourth quarter, resulting in incremental revenue and income in the
comparable periods, which had 14- and 53-weeks, respectively. Further,
GAAP results in fiscal 2017 include items related to strategic actions
the company is taking as it focuses on accelerating growth in
high-returning businesses and streamlining its operations. These items
include restructuring and impairment charges, transaction and
integration costs, gains related to changes in ownership of
international markets, and other items, which are excluded from non-GAAP
results. A reconciliation of non-GAAP measures with their corresponding
GAAP measures is available at the end of this release.
The company will hold a conference call, hosted by Kevin Johnson,
president and ceo, and Scott Maw, cfo, today at 2:00 p.m. Pacific Time,
in order to provide further commentary around Starbucks non-GAAP
business results. The call will be webcast and can be accessed at http://investor.starbucks.com.
Q4 Fiscal 2017 Highlights
-
Global comparable store sales increased 2%, driven by a 2%
increase in average ticket and a 1% increase in transactions; up 3%
excluding the impact from Hurricanes Harvey and Irma
-
Americas comp store sales increased 3%, driven by a 2%
increase in average ticket and a 1% increase in transactions
-
U.S. comp store sales increased 2%; excluding the impact from
Hurricanes Harvey and Irma, U.S. comp sales up 3%, driven by a 1%
increase in transactions
-
CAP comp store sales increased 2%; China comp store sales
increased 8%, driven by a 7% increase in transactions
-
Consolidated net revenues of $5.7 billion versus $5.7 billion in the
prior year quarter. Excluding $412.4 million for the extra week in Q4
FY16, consolidated net revenues grew 8%
-
GAAP operating income of $1.0 billion declined 16.7% compared to the
prior year quarter. Non-GAAP operating income grew 2.8% to $1.1 billion
-
GAAP operating margin of 17.9% declined 360 basis points compared to
the prior year quarter. Non-GAAP operating margin of 20.0% declined 90
basis points primarily due to increased investments in our store
partners
-
GAAP Earnings Per Share of $0.54 was flat to the prior year quarter.
Non-GAAP EPS grew 10.0% to $0.55 per share
-
The company opened 603 net new stores globally, bringing total store
count to 27,339 across 75 countries
-
Membership in Starbucks Rewards grew 11% year-over-year to 13.3
million active members in the U.S., with member spend representing 36%
of U.S. company-operated sales
-
Mobile Order and Pay reached 10% of transactions in U.S.
company-operated stores
Fiscal Year 2017 Highlights
-
Global comparable store sales increased 3%, comprised of a 3%
increase in the Americas segment and a 3% increase in the CAP
segment
-
U.S. comp store sales increased 3%; China comp store sales
increased 7%, driven by a 5% increase in transactions
-
Consolidated net revenues of $22.4 billion grew 5% versus the prior
year. Excluding $412.4 million for the extra week in Q4 FY16,
consolidated net revenues grew 7% year over year
-
GAAP operating income of $4.1 billion declined 0.9% compared to the
prior year. Non-GAAP operating income grew 7.8% to $4.4 billion
-
GAAP operating margin of 18.5% declined 110 basis points compared to
the prior year. Non-GAAP operating margin expanded 10 basis points to
19.7%
-
GAAP Earnings Per Share of $1.97 grew 3.7% versus the prior year.
Non-GAAP EPS grew 11.4% to $2.06 per share
"Today, Starbucks reported another quarter – and year – of strong
performance, with each of our business segments around the world
contributing to record results,” said Kevin Johnson, ceo and president.
“Food, beverage and digital innovation are bringing customers into our
stores at the same time as ongoing operational improvements are enabling
us to drive increased throughput - particularly in our busiest stores at
peak - and deliver a further elevated Starbucks Experience to our
customers.”
“Starbucks delivered solid top and bottom line growth – and our
strongest quarterly traffic number in the U.S. since mid-2016 – despite
a difficult operating environment in both the quarter and year,” said
Scott Maw, cfo. “Continued strong growth and performance from CAP
demonstrates that Starbucks now has two significant profit engines
driving our global returns, our North America business and the broader
CAP market.”
Long Term Financial Targets
The company provides the following updates to long term financial
targets; more detail will be provided during its Q4 FY17 earnings
conference call today at 2:00 p.m. Pacific Time. Following the call,
these items can be accessed on the company's Investor Relations website.
-
Annual global comparable store sales growth of 3% to 5%
-
Annual consolidated net revenue growth in the high single digits
-
Annual earnings per share growth of 12% or greater
-
Annual ROIC of 25% or greater
Fiscal Year 2018 Financial Targets
The company will introduce fiscal year 2018 financial targets during its
Q4 FY17 earnings conference call starting today at 2:00 p.m. Pacific
Time. These items can be accessed on the company's Investor Relations
website during and after the call.
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Fourth Quarter Fiscal 2017 Summary
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Quarter Ended Oct 1, 2017
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Comparable Store Sales(1)
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Sales Growth
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Change in Transactions
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Change in Ticket
|
Consolidated
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2%
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1%
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2%
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Americas
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3%
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1%
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2%
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CAP
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2%
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1%
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1%
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EMEA(2)
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1%
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(2)%
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3%
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(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. For fiscal 2016,
comparable store sales percentages were calculated excluding the 53rd
week.
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(2) Company-operated stores represent 17% of the EMEA
segment store portfolio as of October 1, 2017.
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Operating Results
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Quarter Ended
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Change
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Oct 1, 2017
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Oct 2, 2016
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($ in millions, except per share amounts)
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(13 Weeks Ended)
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(14 Weeks Ended)
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Net New Stores (1)
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603
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690
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(87)
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Revenues
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$5,698.3
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$5,711.2
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0%
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Operating Income
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$1,022.5
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$1,227.5
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(17)%
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Operating Margin
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17.9%
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21.5%
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(360) bps
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EPS
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$0.54
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$0.54
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0%
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(1) Q4 2017 net new stores include the closure of 54
Teavana-branded stores.
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Consolidated net revenues of $5.7 billion in Q4 FY17 were flat to the
prior year quarter, which included an extra week. Excluding $412.4
million for the extra week in Q4 FY16, consolidated net revenues grew
8%, driven by incremental revenues from the opening of 2,254 net new
stores over the past 12 months and a 2% growth in global comparable
store sales. The impact from Hurricanes Irma and Harvey affected
consolidated and U.S. comp growth by 1% as over 1,000 stores were
temporarily closed for storm related reasons.
Consolidated operating income declined 17% to $1,022.5 million in Q4
FY17, down from $1,227.5 million in Q4 FY16. Consolidated operating
margin declined 360 basis points to 17.9%, primarily due to increased
partner investments, largely in the Americas segment, and the lapping of
the 53rd week in Q4 FY16. Additionally, operating margin was adversely
impacted by product mix shift, largely towards food, a higher donation
to The Starbucks Foundation, and costs related to restructuring and
impairments. These were partially offset by sales leverage.
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Q4 Americas Segment Results
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Quarter Ended
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Change
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Oct 1, 2017
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Oct 2, 2016
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($ in millions)
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(13 Weeks Ended)
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(14 Weeks Ended)
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Net New Stores
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257
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307
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(50)
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Revenues
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$3,949.0
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$3,968.1
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0%
|
Operating Income
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$903.7
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$1,096.9
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(18)%
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Operating Margin
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22.9%
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27.6%
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(470) bps
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Net revenues for the Americas segment of $3.9 billion in Q4 FY17 were
flat to the prior year quarter, which included an extra week. Excluding
$288.9 million for the extra week in Q4 FY16, net revenues grew 7%,
driven by incremental revenues from 952 net new store openings over the
past 12 months and a 3% growth in comparable store sales.
Operating income of $903.7 million in Q4 FY17 declined 18% versus
$1,096.9 million in Q4 FY16. Operating margin of 22.9% declined 470
basis points primarily due to increased investments in our store
partners (employees), product mix shift, largely towards food, and the
lapping of the 53rd week in Q4 FY16.
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Q4 China/Asia Pacific Segment Results
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Quarter Ended
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Change
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Oct 1, 2017
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Oct 2, 2016
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($ in millions)
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(13 Weeks Ended)
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(14 Weeks Ended)
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Net New Stores
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296
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316
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(20)
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Revenues
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$859.9
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$839.2
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2%
|
Operating Income
|
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$201.7
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$192.4
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5%
|
Operating Margin
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23.5%
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22.9%
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60 bps
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Net revenues for the China/Asia Pacific segment grew 2% over Q4 FY16 to
$859.9 million in Q4 FY17. Excluding $56.9 million for the extra week in
Q4 FY16, net revenues grew 10%, primarily driven by incremental revenues
from 1,036 net new store openings over the past 12 months and a 2%
growth in comparable store sales. The increase was partially offset by
unfavorable foreign currency translation.
Q4 FY17 operating income of $201.7 million grew 5% over Q4 FY16
operating income of $192.4 million. Operating margin expanded 60 basis
points to 23.5%, primarily driven by higher income from our joint
venture operations and partially offset by the lapping of the 53rd week
in Q4 FY16.
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Q4 EMEA Segment Results
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Quarter Ended
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Change
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Oct 1, 2017
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Oct 2, 2016
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($ in millions)
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(13 Weeks Ended)
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(14 Weeks Ended)
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Net New Stores
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104
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77
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27
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Revenues
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$269.9
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$270.2
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0%
|
Operating Income
|
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$34.8
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$45.8
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(24)%
|
Operating Margin
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12.9%
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17.0%
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(410) bps
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Net revenues for the EMEA segment of $269.9 million in Q4 FY17 were flat
to the prior year quarter, which included an extra week. Excluding $18.3
million for the extra week in Q4 FY16, net revenues grew 7%, driven by
incremental revenues from the opening of 339 net new licensed stores
over the past 12 months.
Operating income of $34.8 million in Q4 FY17 declined 24% versus
operating income of $45.8 million in Q4 FY16. Operating margin declined
410 basis points to 12.9% primarily driven by sales deleverage in
certain company-operated stores, the impact of a tax settlement, and the
lapping of the 53rd week in Q4 FY16. Partially offsetting the decline
was sales leverage due to the shift in the portfolio towards more
licensed stores.
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Q4 Channel Development Segment Results
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Quarter Ended
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Change
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|
Oct 1, 2017
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Oct 2, 2016
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($ in millions)
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(13 Weeks Ended)
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|
(14 Weeks Ended)
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|
|
Revenues
|
|
|
|
$514.9
|
|
|
$518.5
|
|
|
(1)%
|
Operating Income
|
|
|
|
$246.7
|
|
|
$244.3
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1%
|
Operating Margin
|
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47.9%
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47.1%
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80 bps
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Net revenues for the Channel Development segment of $514.9 million in Q4
FY17 declined 1% versus the prior year quarter, which included an extra
week. Excluding $39.9 million for the extra week in Q4 FY16, net
revenues grew 8%, driven by higher sales through our foodservice,
international and U.S. packaged coffee channels.
Operating income of $246.7 million in Q4 FY17 increased 1% compared to
Q4 FY16. Operating margin expanded 80 basis points to 47.9% primarily
driven by the lapping of the 53rd week in Q4 FY16.
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Q4 All Other Segments Results
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Quarter Ended
|
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|
Change
|
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|
Oct 1, 2017
|
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|
Oct 2, 2016
|
|
|
($ in millions)
|
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|
(13 Weeks Ended)
|
|
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(14 Weeks Ended)
|
|
|
Net New Stores
|
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(54)
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(10)
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(44)
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Revenues
|
|
|
|
$104.6
|
|
|
$115.2
|
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|
(9)%
|
Operating Loss
|
|
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|
$(46.0)
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|
$(10.1)
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355%
|
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All Other Segments primarily includes Teavana-branded stores, Seattle’s
Best Coffee, as well as Starbucks Reserve® and Roastery
businesses. The increase in the operating loss in Q4 FY17 compared to Q4
FY16 was primarily due to restructuring and impairment costs related to
our strategy to close Teavana retail stores and focus on Teavana tea
within Starbucks stores.
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Full Year Financial Results
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Year Ended October 1, 2017
|
Comparable Store Sales(1)
|
|
|
|
Sales Growth
|
|
|
Change in Transactions
|
|
|
Change in Ticket
|
Consolidated
|
|
|
|
3%
|
|
|
0%
|
|
|
3%
|
Americas
|
|
|
|
3%
|
|
|
0%
|
|
|
4%
|
CAP
|
|
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3%
|
|
|
1%
|
|
|
1%
|
EMEA(2)
|
|
|
|
1%
|
|
|
(1)%
|
|
|
1%
|
(1) Includes only Starbucks company-operated stores open
13 months or longer. Comparable store sales exclude the effect of
fluctuations in foreign currency exchange rates. For fiscal 2016,
comparable store sales percentages were calculated excluding the 53rd
week.
|
(2) Company-operated stores represent 17% of the EMEA
segment store portfolio as of October 1, 2017.
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Results
|
|
|
|
Year Ended
|
|
|
Change
|
|
|
|
|
Oct 1, 2017
|
|
|
Oct 2, 2016
|
|
|
($ in millions, except per share amounts)
|
|
|
|
(52 Weeks Ended)
|
|
|
(53 Weeks Ended)
|
|
|
Net New Stores (1)
|
|
|
|
2,254
|
|
|
2,042
|
|
|
212
|
Revenues
|
|
|
|
$22,386.8
|
|
|
$21,315.9
|
|
|
5%
|
Operating Income
|
|
|
|
$4,134.7
|
|
|
$4,171.9
|
|
|
(1)%
|
Operating Margin
|
|
|
|
18.5%
|
|
|
19.6%
|
|
|
(110) bps
|
EPS
|
|
|
|
$1.97
|
|
|
$1.90
|
|
|
4%
|
(1) Fiscal 2017 net new stores include the net closure of
64 Teavana-branded stores.
|
|
Company Updates
-
Starbucks appointed Rosalind Brewer as group president, Americas and
chief operating officer, effective October 2nd. Brewer reports to
Kevin Johnson and serves as a member of the Starbucks senior
leadership team. She also continues to serve on the Starbucks board of
directors. As group president, Americas and chief operating officer,
Brewer leads the company’s operating businesses across the Americas
(U.S., Canada, and Latin America), as well as the global functions of
supply chain, product innovation, and store development organizations.
-
Unilever and Starbucks today announced entry into a definitive
agreement for Unilever to acquire the assets of the TAZO®
brand including TAZO®’s signature recipes, intellectual
property and inventory for $384 million. In turn, Starbucks will drive
a single tea brand strategy and focus with its super premium tea
brand, Teavana.
-
The company announced in September that it had entered into an
agreement with its long-time strategic partner Maxim’s Caterers
Limited – a leading restaurant operator of multiple brands across Asia
– to fully license Starbucks operations in Singapore, including
transitioning the more than 130 company-operated Starbucks stores open
in the market today. The partnership between Starbucks and Maxim’s
started in 2000 in Hong Kong. Currently, they operate more than 210
Starbucks stores across Cambodia, Hong Kong, Macau and Vietnam.
-
On September 20th the company launched Starbucks Rewards™ in Japan, a
loyalty program which offers members exclusive and personalized
benefits. Alongside the launch of the program, the company launched a
redesigned mobile app for iPhone® and Android™, with updates that make
it easier to track stars earned and to redeem rewards. Additionally,
the new digital Starbucks Card feature allows users to instantly
receive a digital card, makes joining Starbucks Rewards™ quick and
convenient, and provides a fast and convenient way for customers to
pay at the more than 1,200 stores across the country.
-
In the wake of unprecedented storms impacting Texas, Florida and
Puerto Rico, Starbucks granted more than 2,100 Caring Unites Partners
(CUP) Fund grants to impacted partners. And Starbucks customers
engaged in the overall relief effort as well, donating nearly $900,000
to the American Red Cross, Center for Disaster Philanthropy and Music
City Cares Fund through the Starbucks mobile app and in stores.
-
The company repurchased 15.1 million shares of common stock in Q4
FY17; approximately 80 million shares remain available for purchase
under current authorizations.
-
The Board of Directors declared a cash dividend of $0.30 per share, an
increase of 20%, payable on December 1, 2017, to shareholders of
record as of November 16, 2017.
-
The company announced a new commitment of returning $15 billion to
shareholders over the next 3 years through dividends and share
repurchases.
Conference Call
Starbucks will hold a conference call today at 2:00 p.m. Pacific Time,
which will be hosted by Kevin Johnson, president and ceo, and 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,
December 2, 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, the impact of our food, beverage and digital innovation,
operational improvements, our two significant profit engines driving our
global returns, our customer base, our focus on accelerating growth in
high-returning businesses and streamlining operations, revenues,
operating margins, comparable store sales, and ROIC, our commitment of
returning $15 billion to shareholders over the next three years through
dividends and share buybacks, our fiscal 2018 and long-term financial
targets, and our strategic, operational, and digital moves, including
the purchase of the remaining 50% ownership of the East China market and
the closure of Teavana 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 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
purchase of the remaining 50% ownership of the East China market and the
closure of Teavana stores, the acceptance of the company’s products by
our customers, our ability to obtain financing on acceptable terms, 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
|
|
|
|
Oct 1, 2017
|
|
|
Oct 2, 2016
|
|
|
% Change
|
|
|
Oct 1, 2017
|
|
|
Oct 2, 2016
|
|
|
|
|
(13 Weeks Ended)
|
|
|
(14 Weeks Ended)
|
|
|
|
|
As a % of total net revenues
|
Net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company-operated stores
|
|
|
|
$
|
4,477.0
|
|
|
|
$
|
4,507.8
|
|
|
|
(0.7
|
)%
|
|
|
78.6
|
%
|
|
|
78.9
|
%
|
Licensed stores
|
|
|
|
617.6
|
|
|
|
593.2
|
|
|
|
4.1
|
|
|
|
10.8
|
|
|
|
10.4
|
|
CPG, foodservice and other
|
|
|
|
603.7
|
|
|
|
610.2
|
|
|
|
(1.1
|
)
|
|
|
10.6
|
|
|
|
10.7
|
|
Total net revenues
|
|
|
|
5,698.3
|
|
|
|
5,711.2
|
|
|
|
(0.2
|
)
|
|
|
100.0
|
|
|
|
100.0
|
|
Cost of sales including occupancy costs(1)
|
|
|
|
2,352.9
|
|
|
|
2,254.2
|
|
|
|
4.4
|
|
|
|
41.3
|
|
|
|
39.5
|
|
Store operating expenses
|
|
|
|
1,639.8
|
|
|
|
1,562.3
|
|
|
|
5.0
|
|
|
|
28.8
|
|
|
|
27.4
|
|
Other operating expenses
|
|
|
|
131.1
|
|
|
|
122.1
|
|
|
|
7.4
|
|
|
|
2.3
|
|
|
|
2.1
|
|
Depreciation and amortization expenses
|
|
|
|
255.4
|
|
|
|
249.9
|
|
|
|
2.2
|
|
|
|
4.5
|
|
|
|
4.4
|
|
General and administrative expenses
|
|
|
|
385.2
|
|
|
|
401.2
|
|
|
|
(4.0
|
)
|
|
|
6.8
|
|
|
|
7.0
|
|
Restructuring and impairments(2)
|
|
|
|
33.3
|
|
|
|
—
|
|
|
|
nm
|
|
|
0.6
|
|
|
|
—
|
|
Total operating expenses
|
|
|
|
4,797.7
|
|
|
|
4,589.7
|
|
|
|
4.5
|
|
|
|
84.2
|
|
|
|
80.4
|
|
Income from equity investees
|
|
|
|
121.9
|
|
|
|
106.0
|
|
|
|
15.0
|
|
|
|
2.1
|
|
|
|
1.9
|
|
Operating income
|
|
|
|
1,022.5
|
|
|
|
1,227.5
|
|
|
|
(16.7
|
)
|
|
|
17.9
|
|
|
|
21.5
|
|
Interest income and other, net(3)
|
|
|
|
151.6
|
|
|
|
12.5
|
|
|
|
1,112.8
|
|
|
|
2.7
|
|
|
|
0.2
|
|
Interest expense
|
|
|
|
(22.3
|
)
|
|
|
(24.7
|
)
|
|
|
(9.7
|
)
|
|
|
(0.4
|
)
|
|
|
(0.4
|
)
|
Earnings before income taxes
|
|
|
|
1,151.8
|
|
|
|
1,215.3
|
|
|
|
(5.2
|
)
|
|
|
20.2
|
|
|
|
21.3
|
|
Income tax expense
|
|
|
|
362.5
|
|
|
|
413.5
|
|
|
|
(12.3
|
)
|
|
|
6.4
|
|
|
|
7.2
|
|
Net earnings including noncontrolling interests
|
|
|
|
789.3
|
|
|
|
801.8
|
|
|
|
(1.6
|
)
|
|
|
13.9
|
|
|
|
14.0
|
|
Net earnings/(loss) attributable to noncontrolling interests
|
|
|
|
0.8
|
|
|
|
0.8
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Net earnings attributable to Starbucks
|
|
|
|
$
|
788.5
|
|
|
|
$
|
801.0
|
|
|
|
(1.6
|
)
|
|
|
13.8
|
%
|
|
|
14.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per common share - diluted
|
|
|
|
$
|
0.54
|
|
|
|
$
|
0.54
|
|
|
|
—
|
%
|
|
|
|
|
|
|
Weighted avg. shares outstanding - diluted
|
|
|
|
1,451.2
|
|
|
|
1,478.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared per share
|
|
|
|
$
|
0.30
|
|
|
|
$
|
0.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Store operating expenses as a % of company-operated store revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
36.6
|
%
|
|
|
34.7
|
%
|
Other operating expenses as a % of non-company-operated store
revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
10.7
|
%
|
|
|
10.1
|
%
|
Effective tax rate including noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
31.5
|
%
|
|
|
34.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
As a result of our restructuring efforts, $11.3 million was recorded
in cost of sales including occupancy cost related to inventory
write-offs.
|
(2)
|
|
|
Represents restructuring charges of $27.3 million associated with
our Teavana-branded stores, $4.1 million related to our Starbucks
Canada retail business and $1.9 million related to our e-commerce
business.
|
(3)
|
|
|
Included in interest income and other, net is the Q4 FY17 gain on
the sale of our Singapore retail operations of $83.9 million.
|
|
|
|
|
|
|
|
|
Year Ended
|
|
|
Year Ended
|
|
|
|
Oct 1, 2017
|
|
|
Oct 2, 2016
|
|
|
%
Change
|
|
|
Oct 1, 2017
|
|
|
Oct 2, 2016
|
|
|
|
(52 Weeks Ended)
|
|
|
(53 Weeks Ended)
|
|
|
|
|
As a % of total net revenues
|
Net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company-operated stores
|
|
|
$
|
17,650.7
|
|
|
|
$
|
16,844.1
|
|
|
|
4.8
|
%
|
|
|
78.8
|
%
|
|
|
79.0
|
%
|
Licensed stores
|
|
|
|
2,355.0
|
|
|
|
2,154.2
|
|
|
|
9.3
|
|
|
|
10.5
|
|
|
|
10.1
|
|
CPG, foodservice and other(1)
|
|
|
|
2,381.1
|
|
|
|
2,317.6
|
|
|
|
2.7
|
|
|
|
10.6
|
|
|
|
10.9
|
|
Total net revenues
|
|
|
|
22,386.8
|
|
|
|
21,315.9
|
|
|
|
5.0
|
|
|
|
100.0
|
|
|
|
100.0
|
|
Cost of sales including occupancy costs(2)
|
|
|
|
9,038.2
|
|
|
|
8,511.1
|
|
|
|
6.2
|
|
|
|
40.4
|
|
|
|
39.9
|
|
Store operating expenses
|
|
|
|
6,493.3
|
|
|
|
6,064.3
|
|
|
|
7.1
|
|
|
|
29.0
|
|
|
|
28.4
|
|
Other operating expenses
|
|
|
|
553.8
|
|
|
|
545.4
|
|
|
|
1.5
|
|
|
|
2.5
|
|
|
|
2.6
|
|
Depreciation and amortization expenses
|
|
|
|
1,011.4
|
|
|
|
980.8
|
|
|
|
3.1
|
|
|
|
4.5
|
|
|
|
4.6
|
|
General and administrative expenses
|
|
|
|
1,393.3
|
|
|
|
1,360.6
|
|
|
|
2.4
|
|
|
|
6.2
|
|
|
|
6.4
|
|
Restructuring and impairments(3)
|
|
|
|
153.5
|
|
|
|
—
|
|
|
|
nm
|
|
|
0.7
|
|
|
|
—
|
|
Total operating expenses
|
|
|
|
18,643.5
|
|
|
|
17,462.2
|
|
|
|
6.8
|
|
|
|
83.3
|
|
|
|
81.9
|
|
Income from equity investees
|
|
|
|
391.4
|
|
|
|
318.2
|
|
|
|
23.0
|
|
|
|
1.7
|
|
|
|
1.5
|
|
Operating income
|
|
|
|
4,134.7
|
|
|
|
4,171.9
|
|
|
|
(0.9
|
)
|
|
|
18.5
|
|
|
|
19.6
|
|
Interest income and other, net(4)
|
|
|
|
275.3
|
|
|
|
108.0
|
|
|
|
154.9
|
|
|
|
1.2
|
|
|
|
0.5
|
|
Interest expense
|
|
|
|
(92.5
|
)
|
|
|
(81.3
|
)
|
|
|
13.8
|
|
|
|
(0.4
|
)
|
|
|
(0.4
|
)
|
Earnings before income taxes
|
|
|
|
4,317.5
|
|
|
|
4,198.6
|
|
|
|
2.8
|
|
|
|
19.3
|
|
|
|
19.7
|
|
Income tax expense
|
|
|
|
1,432.6
|
|
|
|
1,379.7
|
|
|
|
3.8
|
|
|
|
6.4
|
|
|
|
6.5
|
|
Net earnings including noncontrolling interests
|
|
|
|
2,884.9
|
|
|
|
2,818.9
|
|
|
|
2.3
|
|
|
|
12.9
|
|
|
|
13.2
|
|
Net earnings/(loss) attributable to noncontrolling interests
|
|
|
|
0.2
|
|
|
|
1.2
|
|
|
|
(83.3
|
)
|
|
|
—
|
|
|
|
—
|
|
Net earnings attributable to Starbucks
|
|
|
$
|
2,884.7
|
|
|
|
$
|
2,817.7
|
|
|
|
2.4
|
%
|
|
|
12.9
|
%
|
|
|
13.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per common share - diluted
|
|
|
$
|
1.97
|
|
|
|
$
|
1.90
|
|
|
|
3.7
|
%
|
|
|
|
|
|
|
Weighted avg. shares outstanding - diluted
|
|
|
|
1,461.5
|
|
|
|
1,486.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared per share
|
|
|
$
|
1.05
|
|
|
|
$
|
0.85
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Store operating expenses as a % of company-operated store revenues
|
|
|
|
|
|
|
|
|
|
|
|
36.8
|
%
|
|
|
36.0
|
%
|
Other operating expenses as a % of non-company-operated store
revenues
|
|
|
|
|
|
|
|
|
|
|
|
11.7
|
%
|
|
|
12.2
|
%
|
Effective tax rate including noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
33.2
|
%
|
|
|
32.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
CPG revenues included an unfavorable revenue deduction adjustment
pertaining to periods prior to FY17 of $13.2 million, as recorded in
Q2 FY17.
|
(2)
|
|
|
As a result of our restructuring efforts, $11.3 million was recorded
in cost of sales including occupancy cost related to inventory
write-offs.
|
(3)
|
|
|
Represents restructuring and impairment charges of $129.6 million
associated with our Teavana-branded stores, goodwill impairment of
$17.9 million related to our Switzerland retail business, and
restructuring charges associated with Starbucks Canada retail and
e-commerce businesses of $4.1 million and $1.9 million, respectively.
|
(4)
|
|
|
Included in interest income and other, net is the Q4 FY17 gain on
the sale of our Singapore retail operations of $83.9 million and
the Q2 FY17 gain on the sale of our investment in Square, Inc.
warrants of $41 million.
|
|
|
|
|
Segment Results (in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oct 1, 2017
|
|
|
Oct 2, 2016
|
|
|
% Change
|
|
|
Oct 1, 2017
|
|
|
Oct 2, 2016
|
Quarter Ended
|
|
|
(13 Weeks Ended)
|
|
|
(14 Weeks Ended)
|
|
|
|
|
As a % of Americas total net revenues
|
Net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company-operated stores
|
|
|
$
|
3,524.1
|
|
|
$
|
3,550.1
|
|
|
(0.7
|
)%
|
|
|
89.2
|
%
|
|
|
89.5
|
%
|
Licensed stores
|
|
|
|
414.7
|
|
|
|
410.5
|
|
|
1.0
|
|
|
|
10.5
|
|
|
|
10.3
|
|
Foodservice and other
|
|
|
|
10.2
|
|
|
|
7.5
|
|
|
36.0
|
|
|
|
0.3
|
|
|
|
0.2
|
|
Total net revenues
|
|
|
|
3,949.0
|
|
|
|
3,968.1
|
|
|
(0.5
|
)
|
|
|
100.0
|
|
|
|
100.0
|
|
Cost of sales including occupancy costs
|
|
|
|
1,483.5
|
|
|
|
1,406.0
|
|
|
5.5
|
|
|
|
37.6
|
|
|
|
35.4
|
|
Store operating expenses
|
|
|
|
1,326.0
|
|
|
|
1,259.7
|
|
|
5.3
|
|
|
|
33.6
|
|
|
|
31.7
|
|
Other operating expenses
|
|
|
|
32.0
|
|
|
|
10.2
|
|
|
213.7
|
|
|
|
0.8
|
|
|
|
0.3
|
|
Depreciation and amortization expenses
|
|
|
|
154.3
|
|
|
|
148.5
|
|
|
3.9
|
|
|
|
3.9
|
|
|
|
3.7
|
|
General and administrative expenses
|
|
|
|
45.4
|
|
|
|
46.8
|
|
|
(3.0
|
)
|
|
|
1.1
|
|
|
|
1.2
|
|
Restructuring and impairments(1)
|
|
|
|
4.1
|
|
|
|
—
|
|
|
nm
|
|
|
0.1
|
|
|
|
—
|
|
Total operating expenses
|
|
|
|
3,045.3
|
|
|
|
2,871.2
|
|
|
6.1
|
|
|
|
77.1
|
|
|
|
72.4
|
|
Operating income
|
|
|
$
|
903.7
|
|
|
$
|
1,096.9
|
|
|
(17.6
|
)%
|
|
|
22.9
|
%
|
|
|
27.6
|
%
|
Supplemental Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Store operating expenses as a % of company-operated store revenues
|
|
|
|
|
|
|
|
|
|
|
|
37.6
|
%
|
|
|
35.5
|
%
|
Other operating expenses as a % of non-company-operated store
revenues
|
|
|
|
|
|
|
|
|
|
|
|
7.5
|
%
|
|
|
2.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oct 1, 2017
|
|
|
Oct 2, 2016
|
|
|
% Change
|
|
|
Oct 1, 2017
|
|
|
Oct 2, 2016
|
Year Ended
|
|
|
(52 Weeks Ended)
|
|
|
(53 Weeks Ended)
|
|
|
|
|
As a % of Americas total net revenues
|
Net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company-operated stores
|
|
|
$
|
13,996.4
|
|
|
$
|
13,247.4
|
|
|
5.7
|
%
|
|
|
89.4
|
%
|
|
|
89.5
|
%
|
Licensed stores
|
|
|
|
1,617.3
|
|
|
|
1,518.5
|
|
|
6.5
|
|
|
|
10.3
|
|
|
|
10.3
|
|
Foodservice and other
|
|
|
|
39.0
|
|
|
|
29.5
|
|
|
32.2
|
|
|
|
0.2
|
|
|
|
0.2
|
|
Total net revenues
|
|
|
|
15,652.7
|
|
|
|
14,795.4
|
|
|
5.8
|
|
|
|
100.0
|
|
|
|
100.0
|
|
Cost of sales including occupancy costs
|
|
|
|
5,720.3
|
|
|
|
5,271.9
|
|
|
8.5
|
|
|
|
36.5
|
|
|
|
35.6
|
|
Store operating expenses
|
|
|
|
5,320.2
|
|
|
|
4,909.3
|
|
|
8.4
|
|
|
|
34.0
|
|
|
|
33.2
|
|
Other operating expenses
|
|
|
|
128.5
|
|
|
|
96.0
|
|
|
33.9
|
|
|
|
0.8
|
|
|
|
0.6
|
|
Depreciation and amortization expenses
|
|
|
|
615.0
|
|
|
|
590.1
|
|
|
4.2
|
|
|
|
3.9
|
|
|
|
4.0
|
|
General and administrative expenses
|
|
|
|
201.4
|
|
|
|
186.1
|
|
|
8.2
|
|
|
|
1.3
|
|
|
|
1.3
|
|
Restructuring and impairments(1)
|
|
|
|
4.1
|
|
|
|
—
|
|
|
nm
|
|
|
—
|
|
|
|
—
|
|
Total operating expenses
|
|
|
|
11,989.5
|
|
|
|
11,053.4
|
|
|
8.5
|
|
|
|
76.6
|
|
|
|
74.7
|
|
Operating income
|
|
|
$
|
3,663.2
|
|
|
$
|
3,742.0
|
|
|
(2.1
|
)%
|
|
|
23.4
|
%
|
|
|
25.3
|
%
|
Supplemental Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Store operating expenses as a % of company-operated store revenues
|
|
|
|
|
|
|
|
|
|
|
|
38.0
|
%
|
|
|
37.1
|
%
|
Other operating expenses as a % of non-company-operated store
revenues
|
|
|
|
|
|
|
|
|
|
|
|
7.8
|
%
|
|
|
6.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
Represents restructuring charges of $4.1 million related to our
Starbucks Canada retail business.
|
|
|
|
|
|
China/Asia Pacific (CAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oct 1, 2017
|
|
|
Oct 2, 2016
|
|
|
% Change
|
|
|
Oct 1, 2017
|
|
|
Oct 2, 2016
|
Quarter Ended
|
|
|
|
(13 Weeks Ended)
|
|
|
(14 Weeks Ended)
|
|
|
|
|
As a % of CAP total net revenues
|
Net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company-operated stores
|
|
|
|
$
|
770.0
|
|
|
$
|
756.4
|
|
|
1.8
|
%
|
|
|
89.5
|
%
|
|
|
90.1
|
%
|
Licensed stores
|
|
|
|
|
88.7
|
|
|
|
81.6
|
|
|
8.7
|
|
|
|
10.3
|
|
|
|
9.7
|
|
Foodservice and other
|
|
|
|
|
1.2
|
|
|
|
1.2
|
|
|
—
|
|
|
|
0.1
|
|
|
|
0.1
|
|
Total net revenues
|
|
|
|
|
859.9
|
|
|
|
839.2
|
|
|
2.5
|
|
|
|
100.0
|
|
|
|
100.0
|
|
Cost of sales including occupancy costs
|
|
|
|
|
369.6
|
|
|
|
363.2
|
|
|
1.8
|
|
|
|
43.0
|
|
|
|
43.3
|
|
Store operating expenses
|
|
|
|
|
226.6
|
|
|
|
221.4
|
|
|
2.3
|
|
|
|
26.4
|
|
|
|
26.4
|
|
Other operating expenses
|
|
|
|
|
20.5
|
|
|
|
22.1
|
|
|
(7.2
|
)
|
|
|
2.4
|
|
|
|
2.6
|
|
Depreciation and amortization expenses
|
|
|
|
|
53.3
|
|
|
|
48.9
|
|
|
9.0
|
|
|
|
6.2
|
|
|
|
5.8
|
|
General and administrative expenses
|
|
|
|
|
46.8
|
|
|
|
37.2
|
|
|
25.8
|
|
|
|
5.4
|
|
|
|
4.4
|
|
Total operating expenses
|
|
|
|
|
716.8
|
|
|
|
692.8
|
|
|
3.5
|
|
|
|
83.4
|
|
|
|
82.6
|
|
Income from equity investees
|
|
|
|
|
58.6
|
|
|
|
46.0
|
|
|
27.4
|
|
|
|
6.8
|
|
|
|
5.5
|
|
Operating income
|
|
|
|
$
|
201.7
|
|
|
$
|
192.4
|
|
|
4.8
|
%
|
|
|
23.5
|
%
|
|
|
22.9
|
%
|
Supplemental Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Store operating expenses as a % of company-operated store revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
29.4
|
%
|
|
|
29.3
|
%
|
Other operating expenses as a % of non-company-operated store
revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
22.8
|
%
|
|
|
26.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oct 1, 2017
|
|
|
Oct 2, 2016
|
|
|
% Change
|
|
|
Oct 1, 2017
|
|
|
Oct 2, 2016
|
|
|
|
|
|
|
|
|
|
Year Ended
|
|
|
|
(52 Weeks Ended)
|
|
|
(53 Weeks Ended)
|
|
|
|
|
As a % of CAP total net revenues
|
Net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company-operated stores
|
|
|
|
$
|
2,906.0
|
|
|
$
|
2,640.4
|
|
|
10.1
|
%
|
|
|
89.7
|
%
|
|
|
89.8
|
%
|
Licensed stores
|
|
|
|
|
327.4
|
|
|
|
292.3
|
|
|
12.0
|
|
|
|
10.1
|
|
|
|
9.9
|
|
Foodservice and other
|
|
|
|
|
6.8
|
|
|
|
6.1
|
|
|
11.5
|
|
|
|
0.2
|
|
|
|
0.2
|
|
Total net revenues
|
|
|
|
|
3,240.2
|
|
|
|
2,938.8
|
|
|
10.3
|
|
|
|
100.0
|
|
|
|
100.0
|
|
Cost of sales including occupancy costs
|
|
|
|
|
1,393.9
|
|
|
|
1,296.7
|
|
|
7.5
|
|
|
|
43.0
|
|
|
|
44.1
|
|
Store operating expenses
|
|
|
|
|
845.5
|
|
|
|
779.4
|
|
|
8.5
|
|
|
|
26.1
|
|
|
|
26.5
|
|
Other operating expenses
|
|
|
|
|
74.6
|
|
|
|
70.3
|
|
|
6.1
|
|
|
|
2.3
|
|
|
|
2.4
|
|
Depreciation and amortization expenses
|
|
|
|
|
202.2
|
|
|
|
180.6
|
|
|
12.0
|
|
|
|
6.2
|
|
|
|
6.1
|
|
General and administrative expenses
|
|
|
|
|
156.0
|
|
|
|
130.3
|
|
|
19.7
|
|
|
|
4.8
|
|
|
|
4.4
|
|
Total operating expenses
|
|
|
|
|
2,672.2
|
|
|
|
2,457.3
|
|
|
8.7
|
|
|
|
82.5
|
|
|
|
83.6
|
|
Income from equity investees
|
|
|
|
|
197.0
|
|
|
|
150.1
|
|
|
31.2
|
|
|
|
6.1
|
|
|
|
5.1
|
|
Operating income
|
|
|
|
$
|
765.0
|
|
|
$
|
631.6
|
|
|
21.1
|
%
|
|
|
23.6
|
%
|
|
|
21.5
|
%
|
Supplemental Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Store operating expenses as a % of company-operated store revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
29.1
|
%
|
|
|
29.5
|
%
|
Other operating expenses as a % of non-company-operated store
revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
22.3
|
%
|
|
|
23.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oct 1, 2017
|
|
|
Oct 2, 2016
|
|
|
% Change
|
|
|
Oct 1, 2017
|
|
|
Oct 2, 2016
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
|
(13 Weeks Ended)
|
|
|
(14 Weeks Ended)
|
|
|
|
|
As a % of EMEA total net revenues
|
Net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company-operated stores
|
|
|
|
$
|
141.4
|
|
|
$
|
156.0
|
|
|
(9.4
|
)%
|
|
|
52.4
|
%
|
|
|
57.7
|
%
|
Licensed stores
|
|
|
|
|
113.7
|
|
|
|
100.2
|
|
|
13.5
|
|
|
|
42.1
|
|
|
|
37.1
|
|
Foodservice
|
|
|
|
|
14.8
|
|
|
|
14.0
|
|
|
5.7
|
|
|
|
5.5
|
|
|
|
5.2
|
|
Total net revenues
|
|
|
|
|
269.9
|
|
|
|
270.2
|
|
|
(0.1
|
)
|
|
|
100.0
|
|
|
|
100.0
|
|
Cost of sales including occupancy costs
|
|
|
|
|
140.8
|
|
|
|
137.7
|
|
|
2.3
|
|
|
|
52.2
|
|
|
|
51.0
|
|
Store operating expenses
|
|
|
|
|
63.1
|
|
|
|
51.2
|
|
|
23.2
|
|
|
|
23.4
|
|
|
|
18.9
|
|
Other operating expenses
|
|
|
|
|
13.8
|
|
|
|
15.0
|
|
|
(8.0
|
)
|
|
|
5.1
|
|
|
|
5.6
|
|
Depreciation and amortization expenses
|
|
|
|
|
8.4
|
|
|
|
8.4
|
|
|
—
|
|
|
|
3.1
|
|
|
|
3.1
|
|
General and administrative expenses
|
|
|
|
|
9.0
|
|
|
|
12.1
|
|
|
(25.6
|
)
|
|
|
3.3
|
|
|
|
4.5
|
|
Total operating expenses
|
|
|
|
|
235.1
|
|
|
|
224.4
|
|
|
4.8
|
|
|
|
87.1
|
|
|
|
83.0
|
|
Operating income
|
|
|
|
$
|
34.8
|
|
|
$
|
45.8
|
|
|
(24.0
|
)%
|
|
|
12.9
|
%
|
|
|
17.0
|
%
|
Supplemental Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Store operating expenses as a % of company-operated store revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
44.6
|
%
|
|
|
32.8
|
%
|
Other operating expenses as a % of non-company-operated store
revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
10.7
|
%
|
|
|
13.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oct 1, 2017
|
|
|
Oct 2, 2016
|
|
|
% Change
|
|
|
Oct 1, 2017
|
|
|
Oct 2, 2016
|
|
|
|
|
|
|
|
|
Year Ended
|
|
|
|
(52 Weeks Ended)
|
|
|
(53 Weeks Ended)
|
|
|
|
|
As a % of EMEA total net revenues
|
Net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company-operated stores
|
|
|
|
$
|
551.0
|
|
|
$
|
732.0
|
|
|
(24.7
|
)%
|
|
|
54.4
|
%
|
|
|
65.1
|
%
|
Licensed stores
|
|
|
|
|
407.7
|
|
|
|
339.5
|
|
|
20.1
|
|
|
|
40.2
|
|
|
|
30.2
|
|
Foodservice
|
|
|
|
|
55.0
|
|
|
|
53.4
|
|
|
3.0
|
|
|
|
5.4
|
|
|
|
4.7
|
|
Total net revenues
|
|
|
|
|
1,013.7
|
|
|
|
1,124.9
|
|
|
(9.9
|
)
|
|
|
100.0
|
|
|
|
100.0
|
|
Cost of sales including occupancy costs
|
|
|
|
|
533.5
|
|
|
|
565.0
|
|
|
(5.6
|
)
|
|
|
52.6
|
|
|
|
50.2
|
|
Store operating expenses
|
|
|
|
|
214.1
|
|
|
|
260.6
|
|
|
(17.8
|
)
|
|
|
21.1
|
|
|
|
23.2
|
|
Other operating expenses
|
|
|
|
|
59.1
|
|
|
|
57.0
|
|
|
3.7
|
|
|
|
5.8
|
|
|
|
5.1
|
|
Depreciation and amortization expenses
|
|
|
|
|
31.3
|
|
|
|
40.8
|
|
|
(23.3
|
)
|
|
|
3.1
|
|
|
|
3.6
|
|
General and administrative expenses
|
|
|
|
|
41.7
|
|
|
|
51.4
|
|
|
(18.9
|
)
|
|
|
4.1
|
|
|
|
4.6
|
|
Restructuring and impairments(1)
|
|
|
|
|
17.9
|
|
|
|
—
|
|
|
nm
|
|
|
1.8
|
|
|
|
—
|
|
Total operating expenses
|
|
|
|
|
897.6
|
|
|
|
974.8
|
|
|
(7.9
|
)
|
|
|
88.5
|
|
|
|
86.7
|
|
Income from equity investees
|
|
|
|
|
—
|
|
|
|
1.5
|
|
|
(100.0
|
)
|
|
|
—
|
|
|
|
0.1
|
|
Operating income
|
|
|
|
$
|
116.1
|
|
|
$
|
151.6
|
|
|
(23.4
|
)%
|
|
|
11.5
|
%
|
|
|
13.5
|
%
|
Supplemental Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Store operating expenses as a % of company-operated store revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
38.9
|
%
|
|
|
35.6
|
%
|
Other operating expenses as a % of non-company-operated store
revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
12.8
|
%
|
|
|
14.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
Represents goodwill impairment related to our Switzerland retail
business recorded in Q3 FY17.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Channel Development
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oct 1, 2017
|
|
|
Oct 2, 2016
|
|
|
% Change
|
|
|
Oct 1, 2017
|
|
|
Oct 2, 2016
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
|
(13 Weeks Ended)
|
|
|
(14 Weeks Ended)
|
|
|
|
|
As a % of Channel Development total net
revenues
|
Net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CPG
|
|
|
|
$
|
396.0
|
|
|
$
|
401.7
|
|
|
(1.4
|
)%
|
|
|
76.9
|
%
|
|
|
77.5
|
%
|
Foodservice
|
|
|
|
|
118.9
|
|
|
|
116.8
|
|
|
1.8
|
|
|
|
23.1
|
|
|
|
22.5
|
|
Total net revenues
|
|
|
|
|
514.9
|
|
|
|
518.5
|
|
|
(0.7
|
)
|
|
|
100.0
|
|
|
|
100.0
|
|
Cost of sales
|
|
|
|
|
278.9
|
|
|
|
271.9
|
|
|
2.6
|
|
|
|
54.2
|
|
|
|
52.4
|
|
Other operating expenses
|
|
|
|
|
49.3
|
|
|
|
56.7
|
|
|
(13.1
|
)
|
|
|
9.6
|
|
|
|
10.9
|
|
Depreciation and amortization expenses
|
|
|
|
|
0.5
|
|
|
|
0.7
|
|
|
(28.6
|
)
|
|
|
0.1
|
|
|
|
0.1
|
|
General and administrative expenses
|
|
|
|
|
2.8
|
|
|
|
4.9
|
|
|
(42.9
|
)
|
|
|
0.5
|
|
|
|
0.9
|
|
Total operating expenses
|
|
|
|
|
331.5
|
|
|
|
334.2
|
|
|
(0.8
|
)
|
|
|
64.4
|
|
|
|
64.5
|
|
Income from equity investees
|
|
|
|
|
63.3
|
|
|
|
60.0
|
|
|
5.5
|
|
|
|
12.3
|
|
|
|
11.6
|
|
Operating income
|
|
|
|
$
|
246.7
|
|
|
$
|
244.3
|
|
|
1.0
|
%
|
|
|
47.9
|
%
|
|
|
47.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oct 1, 2017
|
|
|
Oct 2, 2016
|
|
|
% Change
|
|
|
Oct 1, 2017
|
|
|
Oct 2, 2016
|
|
|
|
|
|
|
|
|
Year Ended
|
|
|
|
(52 Weeks Ended)
|
|
|
(53 Weeks Ended)
|
|
|
|
|
As a % of Channel Development total net
revenues
|
Net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CPG(1)
|
|
|
|
$
|
1,543.7
|
|
|
$
|
1,488.2
|
|
|
3.7
|
%
|
|
|
76.9
|
%
|
|
|
77.0
|
%
|
Foodservice
|
|
|
|
|
464.9
|
|
|
|
444.3
|
|
|
4.6
|
|
|
|
23.1
|
|
|
|
23.0
|
|
Total net revenues
|
|
|
|
|
2,008.6
|
|
|
|
1,932.5
|
|
|
3.9
|
|
|
|
100.0
|
|
|
|
100.0
|
|
Cost of sales
|
|
|
|
|
1,074.3
|
|
|
|
1,042.6
|
|
|
3.0
|
|
|
|
53.5
|
|
|
|
54.0
|
|
Other operating expenses
|
|
|
|
|
222.2
|
|
|
|
228.5
|
|
|
(2.8
|
)
|
|
|
11.1
|
|
|
|
11.8
|
|
Depreciation and amortization expenses
|
|
|
|
|
2.2
|
|
|
|
2.8
|
|
|
(21.4
|
)
|
|
|
0.1
|
|
|
|
0.1
|
|
General and administrative expenses
|
|
|
|
|
10.9
|
|
|
|
17.9
|
|
|
(39.1
|
)
|
|
|
0.5
|
|
|
|
0.9
|
|
Total operating expenses
|
|
|
|
|
1,309.6
|
|
|
|
1,291.8
|
|
|
1.4
|
|
|
|
65.2
|
|
|
|
66.8
|
|
Income from equity investees
|
|
|
|
|
194.4
|
|
|
|
166.6
|
|
|
16.7
|
|
|
|
9.7
|
|
|
|
8.6
|
|
Operating income
|
|
|
|
$
|
893.4
|
|
|
$
|
807.3
|
|
|
10.7
|
%
|
|
|
44.5
|
%
|
|
|
41.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
Includes an unfavorable revenue deduction adjustment pertaining to
periods prior to FY17 of $13.2 million, as recorded in Q2 FY17.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other Segments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oct 1, 2017
|
|
|
Oct 2, 2016
|
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
(13 Weeks Ended)
|
|
|
(14 Weeks Ended)
|
|
|
Quarter Ended
|
|
|
|
|
|
|
|
|
|
|
Net revenues:
|
|
|
|
|
|
|
|
|
|
|
Company-operated stores
|
|
|
|
$
|
41.5
|
|
|
|
$
|
45.3
|
|
|
|
(8.4
|
)%
|
Licensed stores
|
|
|
|
|
0.5
|
|
|
|
|
0.9
|
|
|
|
(44.4
|
)
|
CPG, foodservice and other
|
|
|
|
|
62.6
|
|
|
|
|
69.0
|
|
|
|
(9.3
|
)
|
Total net revenues
|
|
|
|
|
104.6
|
|
|
|
|
115.2
|
|
|
|
(9.2
|
)
|
Cost of sales including occupancy costs(1)
|
|
|
|
|
78.5
|
|
|
|
|
69.9
|
|
|
|
12.3
|
|
Store operating expenses
|
|
|
|
|
24.1
|
|
|
|
|
30.0
|
|
|
|
(19.7
|
)
|
Other operating expenses
|
|
|
|
|
15.3
|
|
|
|
|
16.1
|
|
|
|
(5.0
|
)
|
Depreciation and amortization expenses
|
|
|
|
|
0.7
|
|
|
|
|
3.1
|
|
|
|
(77.4
|
)
|
General and administrative expenses
|
|
|
|
|
2.8
|
|
|
|
|
6.2
|
|
|
|
(54.8
|
)
|
Restructuring and impairments(2)
|
|
|
|
|
29.2
|
|
|
|
|
—
|
|
|
|
nm
|
Total operating expenses
|
|
|
|
|
150.6
|
|
|
|
|
125.3
|
|
|
|
20.2
|
|
Operating loss
|
|
|
|
$
|
(46.0
|
)
|
|
|
$
|
(10.1
|
)
|
|
|
355.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oct 1, 2017
|
|
|
Oct 2, 2016
|
|
|
% Change
|
|
|
|
|
|
|
|
|
Year Ended
|
|
|
|
(52 Weeks Ended)
|
|
|
(53 Weeks Ended)
|
|
|
Net revenues:
|
|
|
|
|
|
|
|
|
|
|
Company-operated stores
|
|
|
|
$
|
197.3
|
|
|
|
$
|
224.3
|
|
|
|
(12.0
|
)%
|
Licensed stores
|
|
|
|
|
2.6
|
|
|
|
|
3.9
|
|
|
|
(33.3
|
)
|
CPG, foodservice and other
|
|
|
|
|
271.7
|
|
|
|
|
296.1
|
|
|
|
(8.2
|
)
|
Total net revenues
|
|
|
|
|
471.6
|
|
|
|
|
524.3
|
|
|
|
(10.1
|
)
|
Cost of sales including occupancy costs(1)
|
|
|
|
|
308.0
|
|
|
|
|
316.5
|
|
|
|
(2.7
|
)
|
Store operating expenses
|
|
|
|
|
113.5
|
|
|
|
|
115.0
|
|
|
|
(1.3
|
)
|
Other operating expenses
|
|
|
|
|
68.2
|
|
|
|
|
91.4
|
|
|
|
(25.4
|
)
|
Depreciation and amortization expenses
|
|
|
|
|
10.1
|
|
|
|
|
13.3
|
|
|
|
(24.1
|
)
|
General and administrative expenses
|
|
|
|
|
14.6
|
|
|
|
|
26.5
|
|
|
|
(44.9
|
)
|
Restructuring and impairments(3)
|
|
|
|
|
131.5
|
|
|
|
|
—
|
|
|
|
nm
|
Total operating expenses
|
|
|
|
|
645.9
|
|
|
|
|
562.7
|
|
|
|
14.8
|
|
Operating loss
|
|
|
|
$
|
(174.3
|
)
|
|
|
$
|
(38.4
|
)
|
|
|
353.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
As a result of our restructuring efforts, $9.3 million was recorded
in cost of sales including occupancy cost related to inventory
write-offs.
|
(2)
|
|
|
Represents restructuring related costs associated with our
Teavana-branded stores and our e-commerce business of $27.3 million
and $1.9 million, respectively.
|
(3)
|
|
|
Represents restructuring and impairment charges of $129.6 million
associated with our Teavana-branded stores as well as restructuring
charges associated with our e-commerce business of $1.9 million.
|
|
|
|
|
|
STARBUCKS CORPORATION
|
CONSOLIDATED BALANCE SHEETS
|
(unaudited, in millions, except per share data)
|
|
|
|
|
|
Oct 1, 2017
|
|
|
Oct 2, 2016
|
ASSETS
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
2,462.3
|
|
|
|
$
|
2,128.8
|
|
Short-term investments
|
|
|
|
|
228.6
|
|
|
|
|
134.4
|
|
Accounts receivable, net
|
|
|
|
|
870.4
|
|
|
|
|
768.8
|
|
Inventories
|
|
|
|
|
1,364.0
|
|
|
|
|
1,378.5
|
|
Prepaid expenses and other current assets
|
|
|
|
|
358.1
|
|
|
|
|
347.4
|
|
Total current assets
|
|
|
|
|
5,283.4
|
|
|
|
|
4,757.9
|
|
Long-term investments
|
|
|
|
|
542.3
|
|
|
|
|
1,141.7
|
|
Equity and cost investments
|
|
|
|
|
481.6
|
|
|
|
|
354.5
|
|
Property, plant and equipment, net
|
|
|
|
|
4,919.5
|
|
|
|
|
4,533.8
|
|
Deferred income taxes, net
|
|
|
|
|
795.4
|
|
|
|
|
885.4
|
|
Other long-term assets
|
|
|
|
|
362.8
|
|
|
|
|
403.3
|
|
Other intangible assets
|
|
|
|
|
441.4
|
|
|
|
|
516.3
|
|
Goodwill
|
|
|
|
|
1,539.2
|
|
|
|
|
1,719.6
|
|
TOTAL ASSETS
|
|
|
|
$
|
14,365.6
|
|
|
|
$
|
14,312.5
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
$
|
782.5
|
|
|
|
$
|
730.6
|
|
Accrued liabilities
|
|
|
|
|
1,934.5
|
|
|
|
|
1,999.1
|
|
Insurance reserves
|
|
|
|
|
215.2
|
|
|
|
|
246.0
|
|
Stored value card liability
|
|
|
|
|
1,288.5
|
|
|
|
|
1,171.2
|
|
Current portion of long-term debt
|
|
|
|
|
—
|
|
|
|
|
399.9
|
|
Total current liabilities
|
|
|
|
|
4,220.7
|
|
|
|
|
4,546.8
|
|
Long-term debt
|
|
|
|
|
3,932.6
|
|
|
|
|
3,185.3
|
|
Other long-term liabilities
|
|
|
|
|
755.3
|
|
|
|
|
689.7
|
|
Total liabilities
|
|
|
|
|
8,908.6
|
|
|
|
|
8,421.8
|
|
Shareholders’ equity:
|
|
|
|
|
|
|
|
Common stock ($0.001 par value) — authorized, 2,400.0 shares; issued
and outstanding, 1,431.6 and 1,460.5 shares, respectively
|
|
|
|
|
1.4
|
|
|
|
|
1.5
|
|
Additional paid-in capital
|
|
|
|
|
41.1
|
|
|
|
|
41.1
|
|
Retained earnings
|
|
|
|
|
5,563.2
|
|
|
|
|
5,949.8
|
|
Accumulated other comprehensive loss
|
|
|
|
|
(155.6
|
)
|
|
|
|
(108.4
|
)
|
Total shareholders’ equity
|
|
|
|
|
5,450.1
|
|
|
|
|
5,884.0
|
|
Noncontrolling interests
|
|
|
|
|
6.9
|
|
|
|
|
6.7
|
|
Total equity
|
|
|
|
|
5,457.0
|
|
|
|
|
5,890.7
|
|
TOTAL LIABILITIES AND EQUITY
|
|
|
|
$
|
14,365.6
|
|
|
|
$
|
14,312.5
|
|
|
|
|
|
|
|
|
|
|
STARBUCKS CORPORATION
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(unaudited and in millions)
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended
|
|
|
|
Oct 1, 2017
|
|
|
Oct 2, 2016
|
|
|
Sep 27, 2015
|
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
Net earnings including noncontrolling interests
|
|
|
|
$
|
2,884.9
|
|
|
|
$
|
2,818.9
|
|
|
|
$
|
2,759.3
|
|
Adjustments to reconcile net earnings to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
1,067.1
|
|
|
|
|
1,030.1
|
|
|
|
|
933.8
|
|
Deferred income taxes, net
|
|
|
|
|
95.1
|
|
|
|
|
265.7
|
|
|
|
|
21.2
|
|
Income earned from equity method investees
|
|
|
|
|
(310.2
|
)
|
|
|
|
(250.2
|
)
|
|
|
|
(190.2
|
)
|
Distributions received from equity method investees
|
|
|
|
|
186.6
|
|
|
|
|
223.3
|
|
|
|
|
148.2
|
|
Gain resulting from acquisition/sale of equity in joint ventures and
certain retail operations
|
|
|
|
|
(93.5
|
)
|
|
|
|
(6.1
|
)
|
|
|
|
(394.3
|
)
|
Loss on extinguishment of debt
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
61.1
|
|
Stock-based compensation
|
|
|
|
|
176.0
|
|
|
|
|
218.1
|
|
|
|
|
209.8
|
|
Excess tax benefit on share-based awards
|
|
|
|
|
(77.5
|
)
|
|
|
|
(122.8
|
)
|
|
|
|
(132.4
|
)
|
Goodwill impairments
|
|
|
|
|
87.2
|
|
|
|
|
—
|
|
|
|
|
—
|
|
Other
|
|
|
|
|
68.9
|
|
|
|
|
45.1
|
|
|
|
|
53.8
|
|
Cash provided by changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
|
(96.8
|
)
|
|
|
|
(55.6
|
)
|
|
|
|
(82.8
|
)
|
Inventories
|
|
|
|
|
14.0
|
|
|
|
|
(67.5
|
)
|
|
|
|
(207.9
|
)
|
Accounts payable
|
|
|
|
|
46.4
|
|
|
|
|
46.9
|
|
|
|
|
137.7
|
|
Stored value card liability
|
|
|
|
|
130.8
|
|
|
|
|
180.4
|
|
|
|
|
170.3
|
|
Other operating assets and liabilities
|
|
|
|
|
(4.7
|
)
|
|
|
|
248.8
|
|
|
|
|
261.5
|
|
Net cash provided by operating activities
|
|
|
|
|
4,174.3
|
|
|
|
|
4,575.1
|
|
|
|
|
3,749.1
|
|
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
Purchases of investments
|
|
|
|
|
(674.4
|
)
|
|
|
|
(1,585.7
|
)
|
|
|
|
(567.4
|
)
|
Sales of investments
|
|
|
|
|
1,054.5
|
|
|
|
|
680.7
|
|
|
|
|
600.6
|
|
Maturities and calls of investments
|
|
|
|
|
149.6
|
|
|
|
|
27.9
|
|
|
|
|
18.8
|
|
Acquisitions, net of cash acquired
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(284.3
|
)
|
Additions to property, plant and equipment
|
|
|
|
|
(1,519.4
|
)
|
|
|
|
(1,440.3
|
)
|
|
|
|
(1,303.7
|
)
|
Net proceeds from sale of equity in joint ventures and certain
retail operations
|
|
|
|
|
85.4
|
|
|
|
|
69.6
|
|
|
|
|
8.9
|
|
Other
|
|
|
|
|
54.3
|
|
|
|
|
24.9
|
|
|
|
|
6.8
|
|
Net cash used by investing activities
|
|
|
|
|
(850.0
|
)
|
|
|
|
(2,222.9
|
)
|
|
|
|
(1,520.3
|
)
|
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of long-term debt
|
|
|
|
|
750.2
|
|
|
|
|
1,254.5
|
|
|
|
|
848.5
|
|
Repayments of long-term debt
|
|
|
|
|
(400.0
|
)
|
|
|
|
—
|
|
|
|
|
(610.1
|
)
|
Cash used for purchase of non-controlling interest
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(360.8
|
)
|
Proceeds from issuance of common stock
|
|
|
|
|
150.8
|
|
|
|
|
160.7
|
|
|
|
|
191.8
|
|
Excess tax benefit on share-based awards
|
|
|
|
|
77.5
|
|
|
|
|
122.8
|
|
|
|
|
132.4
|
|
Cash dividends paid
|
|
|
|
|
(1,450.4
|
)
|
|
|
|
(1,178.0
|
)
|
|
|
|
(928.6
|
)
|
Repurchase of common stock
|
|
|
|
|
(2,042.5
|
)
|
|
|
|
(1,995.6
|
)
|
|
|
|
(1,436.1
|
)
|
Minimum tax withholdings on share-based awards
|
|
|
|
|
(82.8
|
)
|
|
|
|
(106.0
|
)
|
|
|
|
(75.5
|
)
|
Other
|
|
|
|
|
(4.4
|
)
|
|
|
|
(8.4
|
)
|
|
|
|
(18.1
|
)
|
Net cash used by financing activities
|
|
|
|
|
(3,001.6
|
)
|
|
|
|
(1,750.0
|
)
|
|
|
|
(2,256.5
|
)
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
|
|
10.8
|
|
|
|
|
(3.5
|
)
|
|
|
|
(150.6
|
)
|
Net increase/(decrease) in cash and cash equivalents
|
|
|
|
|
333.5
|
|
|
|
|
598.7
|
|
|
|
|
(178.3
|
)
|
CASH AND CASH EQUIVALENTS:
|
|
|
|
|
|
|
|
|
|
|
Beginning of period
|
|
|
|
|
2,128.8
|
|
|
|
|
1,530.1
|
|
|
|
|
1,708.4
|
|
End of period
|
|
|
|
$
|
2,462.3
|
|
|
|
$
|
2,128.8
|
|
|
|
$
|
1,530.1
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
|
|
|
|
|
|
|
|
|
|
|
Cash paid during the period for:
|
|
|
|
|
|
|
|
|
|
|
Interest, net of capitalized interest
|
|
|
|
$
|
96.6
|
|
|
|
$
|
74.7
|
|
|
|
$
|
69.5
|
|
Income taxes, net of refunds
|
|
|
|
$
|
1,389.1
|
|
|
|
$
|
878.7
|
|
|
|
$
|
1,072.2
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Information
The following supplemental information is provided for historical and
comparative purposes.
|
|
|
|
|
|
|
|
U.S. Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
|
($ in millions)
|
|
|
|
Oct 1, 2017
|
|
|
Oct 2, 2016
|
|
|
Change
|
Revenues
|
|
|
|
$3,583.8
|
|
|
$3,615.5
|
|
|
(1)%
|
Comparable Store Sales Growth(1)
|
|
|
|
2%
|
|
|
4%
|
|
|
|
Change in Transactions
|
|
|
|
0%
|
|
|
(1%)
|
|
|
|
Change in Ticket
|
|
|
|
2%
|
|
|
6%
|
|
|
|
|
(1) Includes only Starbucks company-operated stores open
13 months or longer. For fiscal 2016, comparable store sales
percentages were calculated excluding the 53rd week.
|
|
|
|
|
|
|
|
|
|
|
|
|
Store Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net stores opened/(closed) and transferred during the period
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
Year Ended
|
|
|
Stores open as of
|
|
|
|
|
Oct 1, 2017
|
|
|
Oct 2, 2016
|
|
|
Oct 1, 2017
|
|
|
Oct 2, 2016
|
|
|
Oct 1, 2017
|
|
|
Oct 2, 2016
|
|
|
|
|
(13 Weeks Ended)
|
|
|
(14 Weeks Ended)
|
|
|
(52 Weeks Ended)
|
|
|
(53 Weeks Ended)
|
|
|
|
|
Americas:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company-operated stores
|
|
|
|
112
|
|
|
|
144
|
|
|
|
394
|
|
|
|
348
|
|
|
|
9,413
|
|
|
9,019
|
Licensed stores
|
|
|
|
145
|
|
|
|
163
|
|
|
|
558
|
|
|
|
456
|
|
|
|
7,146
|
|
|
6,588
|
Total Americas
|
|
|
|
257
|
|
|
|
307
|
|
|
|
952
|
|
|
|
804
|
|
|
|
16,559
|
|
|
15,607
|
China/Asia Pacific(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company-operated stores
|
|
|
|
(28
|
)
|
|
|
136
|
|
|
|
259
|
|
|
|
359
|
|
|
|
3,070
|
|
|
2,811
|
Licensed stores
|
|
|
|
324
|
|
|
|
180
|
|
|
|
777
|
|
|
|
622
|
|
|
|
4,409
|
|
|
3,632
|
Total China/Asia Pacific
|
|
|
|
296
|
|
|
|
316
|
|
|
|
1,036
|
|
|
|
981
|
|
|
|
7,479
|
|
|
6,443
|
EMEA(2):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company-operated stores
|
|
|
|
(4
|
)
|
|
|
(18
|
)
|
|
|
(21
|
)
|
|
|
(214
|
)
|
|
|
502
|
|
|
523
|
Licensed stores
|
|
|
|
108
|
|
|
|
95
|
|
|
|
353
|
|
|
|
494
|
|
|
|
2,472
|
|
|
2,119
|
Total EMEA
|
|
|
|
104
|
|
|
|
77
|
|
|
|
332
|
|
|
|
280
|
|
|
|
2,974
|
|
|
2,642
|
All Other Segments(3):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company-operated stores
|
|
|
|
(54
|
)
|
|
|
(7
|
)
|
|
|
(68
|
)
|
|
|
(17
|
)
|
|
|
290
|
|
|
358
|
Licensed stores
|
|
|
|
—
|
|
|
|
(3
|
)
|
|
|
2
|
|
|
|
(6
|
)
|
|
|
37
|
|
|
35
|
Total All Other Segments
|
|
|
|
(54
|
)
|
|
|
(10
|
)
|
|
|
(66
|
)
|
|
|
(23
|
)
|
|
|
327
|
|
|
393
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Company
|
|
|
|
603
|
|
|
|
690
|
|
|
|
2,254
|
|
|
|
2,042
|
|
|
|
27,339
|
|
|
25,085
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) China/Asia Pacific store data includes the transfer
of 133 company-operated retail stores in Singapore to licensed
stores as a result of the sale to Maxim's Caterers Limited in the
fourth quarter of fiscal 2017.
|
(2) 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.
|
(3) As of October 1, 2017, All Other Segments included
325 Teavana-branded stores, of which 288 stores were
company-operated.
|
|
Non-GAAP Disclosure
In addition to the GAAP results provided in this release, the company
provides certain non-GAAP financial measures that are not in accordance
with, or alternatives for, generally accepted accounting principles in
the United States. Our non-GAAP financial measures of non-GAAP 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
|
Sale of Singapore retail operations
|
|
|
Management excludes the net gain and associated transaction costs
related to the sale of our Singapore 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.
|
Greater China transaction costs
|
|
|
Management excludes transaction costs related to the East China
acquisition and the Taiwan divestiture as these incremental costs
are specific to the purchase and sale activities that do not
contribute to a meaningful evaluation of the company’s future
operating performance or comparisons to the company’s past operating
performance.
|
Restructuring and impairment charges
|
|
|
Management excludes restructuring and impairment charges related to
strategic shifts in its Teavana and e-commerce business units as
well as related to divesting certain lower margin businesses and
assets, such as closure of certain company-operated stores. These
expenses are anticipated to be completed within a finite period of
time. Additionally, management excludes goodwill impairment charges
related to its Switzerland retail business. These expenses do not
contribute to a meaningful evaluation of the company’s future
operating performance or comparisons to the company’s past operating
performance.
|
Starbucks Japan acquisition-related items
|
|
|
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. Integration
costs are expected to be concentrated in the first several years
post-acquisition. Additionally, future amortization of the acquired
intangible assets 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.
|
The Starbucks Foundation donation
|
|
|
Management excludes the company's largest donation to a non-profit
organization as this item does not contribute to a meaningful
evaluation of the company's future operating performance or
comparisons to the company's past 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)
|
|
|
|
|
|
|
|
|
|
($ in millions)
|
|
|
|
Quarter Ended
|
|
|
|
Consolidated
|
|
|
|
Oct 1, 2017
|
|
|
Oct 2, 2016
|
|
|
Change
|
|
|
|
|
(13 Weeks Ended)
|
|
|
(14 Weeks Ended)
|
|
|
Operating income, as reported (GAAP)
|
|
|
|
$
|
1,022.5
|
|
|
|
$
|
1,227.5
|
|
|
|
(16.7)%
|
Sale of Singapore retail operations (1)
|
|
|
|
1.4
|
|
|
|
—
|
|
|
|
|
Greater China transaction costs
|
|
|
|
3.9
|
|
|
|
—
|
|
|
|
|
Restructuring and impairment charges (2)
|
|
|
|
44.6
|
|
|
|
—
|
|
|
|
|
Starbucks Japan acquisition-related items (3)
|
|
|
|
15.9
|
|
|
|
16.7
|
|
|
|
|
The Starbucks Foundation donation
|
|
|
|
50.0
|
|
|
|
—
|
|
|
|
|
Non-GAAP operating income
|
|
|
|
1,138.3
|
|
|
|
1,244.2
|
|
|
|
(8.5)%
|
Impact of the extra week - Q4 FY16
|
|
|
|
—
|
|
|
|
137.3
|
|
|
|
|
Non-GAAP operating income
|
|
|
|
$
|
1,138.3
|
|
|
|
$
|
1,106.9
|
|
|
|
2.8%
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin, as reported (GAAP)
|
|
|
|
17.9
|
%
|
|
|
21.5
|
%
|
|
|
(360) bps
|
Sale of Singapore retail operations (1)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
Greater China transaction costs
|
|
|
|
0.1
|
|
|
|
—
|
|
|
|
|
Restructuring and impairment charges (2)
|
|
|
|
0.8
|
|
|
|
—
|
|
|
|
|
Starbucks Japan acquisition-related items (3)
|
|
|
|
0.3
|
|
|
|
0.3
|
|
|
|
|
The Starbucks Foundation donation
|
|
|
|
0.9
|
|
|
|
—
|
|
|
|
|
Non-GAAP operating margin
|
|
|
|
20.0
|
%
|
|
|
21.8
|
%
|
|
|
(180) bps
|
Impact of the extra week - Q4 FY16
|
|
|
|
—
|
|
|
|
0.9
|
|
|
|
|
Non-GAAP operating margin
|
|
|
|
20.0
|
%
|
|
|
20.9
|
%
|
|
|
(90) bps
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net earnings per share, as reported (GAAP)
|
|
|
|
$
|
0.54
|
|
|
|
$
|
0.54
|
|
|
|
0.0%
|
Sale of Singapore retail operations (1)
|
|
|
|
(0.06
|
)
|
|
|
—
|
|
|
|
|
Greater China transaction costs
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
Restructuring and impairment charges (2)
|
|
|
|
0.03
|
|
|
|
—
|
|
|
|
|
Starbucks Japan acquisition-related items (3)
|
|
|
|
0.01
|
|
|
|
0.01
|
|
|
|
|
Sale of Germany retail operations(4)
|
|
|
|
—
|
|
|
|
0.02
|
|
|
|
|
The Starbucks Foundation donation
|
|
|
|
0.03
|
|
|
|
—
|
|
|
|
|
Income tax effect on Non-GAAP adjustments (5)
|
|
|
|
(0.02
|
)
|
|
|
(0.01
|
)
|
|
|
|
Non-GAAP net earnings per share
|
|
|
|
$
|
0.55
|
|
|
|
$
|
0.56
|
|
|
|
(1.8)%
|
Impact of the extra week - Q4 FY16
|
|
|
|
—
|
|
|
|
(0.09
|
)
|
|
|
|
Income tax effect on the impact of the extra week - Q4 FY16 (5)
|
|
|
|
—
|
|
|
|
0.03
|
|
|
|
|
Non-GAAP net earnings per share
|
|
|
|
$
|
0.55
|
|
|
|
$
|
0.50
|
|
|
|
10.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
Transaction costs of $1.4 million associated with the transfer of
Singapore company-operated retail stores to licensed stores are
recorded within operating income; gain from the sale of $83.9
million is recorded within interest income and other, net.
|
(2)
|
|
|
Represents restructuring and impairment charges of $33.3 million
associated with our restructuring efforts. Inventory write-offs of
$11.3 million related to these efforts were recorded within cost
of sales including occupancy costs.
|
(3)
|
|
|
Includes ongoing amortization expense of acquired intangible assets
associated with the acquisition and post-acquisition integration
costs, such as incremental information technology and
compensation-related costs.
|
(4)
|
|
|
Represents additional cost incurred associated with the sale of
our Germany retail operations.
|
(5)
|
|
|
Income tax effect on non-GAAP adjustments was determined based on
the nature of the underlying items and their relevant jurisdictional
tax rates.
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions)
|
|
|
|
Year Ended
|
|
|
|
Consolidated
|
|
|
|
FY17
|
|
|
FY16
|
|
|
|
|
|
|
(52 Weeks Ended)
|
|
|
(53 Weeks Ended)
|
|
|
Change
|
Operating income, as reported (GAAP)
|
|
|
|
$
|
4,134.7
|
|
|
|
$
|
4,171.9
|
|
|
|
(0.9)%
|
Sale of Singapore retail operations (1)
|
|
|
|
|
1.4
|
|
|
|
|
—
|
|
|
|
|
Greater China transaction costs
|
|
|
|
|
3.9
|
|
|
|
|
—
|
|
|
|
|
Restructuring and impairment charges (2)
|
|
|
|
|
164.8
|
|
|
|
|
—
|
|
|
|
|
Starbucks Japan acquisition-related items (3)
|
|
|
|
|
57.7
|
|
|
|
|
57.4
|
|
|
|
|
Sale of Germany retail operations(4)
|
|
|
|
|
—
|
|
|
|
|
2.8
|
|
|
|
|
The Starbucks Foundation donation
|
|
|
|
|
50.0
|
|
|
|
|
—
|
|
|
|
|
Non-GAAP operating income
|
|
|
|
|
4,412.5
|
|
|
|
|
4,232.1
|
|
|
|
4.3%
|
Impact of the extra week - Q4 FY16
|
|
|
|
|
—
|
|
|
|
|
137.3
|
|
|
|
|
Non-GAAP operating income
|
|
|
|
$
|
4,412.5
|
|
|
|
$
|
4,094.8
|
|
|
|
7.8%
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin, as reported (GAAP)
|
|
|
|
|
18.5
|
%
|
|
|
|
19.6
|
%
|
|
|
(110) bps
|
Sale of Singapore retail operations (1)
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
Greater China transaction costs
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
Restructuring and impairment charges (2)
|
|
|
|
|
0.7
|
|
|
|
|
—
|
|
|
|
|
Starbucks Japan acquisition-related items (3)
|
|
|
|
|
0.3
|
|
|
|
|
0.3
|
|
|
|
|
Sale of Germany retail operations(4)
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
The Starbucks Foundation donation
|
|
|
|
|
0.2
|
|
|
|
|
—
|
|
|
|
|
Non-GAAP operating margin
|
|
|
|
|
19.7
|
%
|
|
|
|
19.9
|
%
|
|
|
(20) bps
|
Impact of the extra week
|
|
|
|
|
—
|
|
|
|
|
0.3
|
|
|
|
|
Non-GAAP operating margin
|
|
|
|
|
19.7
|
%
|
|
|
|
19.6
|
%
|
|
|
10 bps
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net earnings per share, as reported (GAAP)
|
|
|
|
$
|
1.97
|
|
|
|
$
|
1.90
|
|
|
|
3.7%
|
Sale of Singapore retail operations (1)
|
|
|
|
|
(0.06
|
)
|
|
|
|
—
|
|
|
|
|
Greater China transaction costs
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
Restructuring and impairment charges (2)
|
|
|
|
|
0.11
|
|
|
|
|
—
|
|
|
|
|
Starbucks Japan acquisition-related items (3)
|
|
|
|
|
0.04
|
|
|
|
|
0.04
|
|
|
|
|
Sale of Germany retail operations(4)
|
|
|
|
|
(0.01
|
)
|
|
|
|
—
|
|
|
|
|
The Starbucks Foundation donation
|
|
|
|
|
0.03
|
|
|
|
|
—
|
|
|
|
|
Income tax effect on Non-GAAP adjustments(5)
|
|
|
|
|
(0.04
|
)
|
|
|
|
(0.01
|
)
|
|
|
|
Other tax matters (6)
|
|
|
|
|
—
|
|
|
|
|
(0.01
|
)
|
|
|
|
Non-GAAP net earnings per share
|
|
|
|
$
|
2.06
|
|
|
|
$
|
1.91
|
|
|
|
7.9%
|
Impact of the extra week - Q4 FY16
|
|
|
|
|
—
|
|
|
|
|
(0.09
|
)
|
|
|
|
Income tax effect on the impact of the extra week - Q4 FY16 (5)
|
|
|
|
|
—
|
|
|
|
|
0.03
|
|
|
|
|
Non-GAAP net earnings per share
|
|
|
|
$
|
2.06
|
|
|
|
$
|
1.85
|
|
|
|
11.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
Transaction costs of $1.4 million associated with the transfer of
Singapore company-operated retail stores to licensed stores are
recorded within operating income; gain from the sale of $83.9
million is recorded within interest income and other, net.
|
(2)
|
|
|
Represents restructuring and impairment charges of $153.5 million
associated with our restructuring efforts. Inventory write-offs of
$11.3 million related to these efforts were recorded within cost
of sales including occupancy costs.
|
(3)
|
|
|
Includes ongoing amortization expense of acquired intangible assets
associated with the acquisition and post-acquisition integration
costs, such as incremental information technology and
compensation-related costs.
|
(4)
|
|
|
Costs incurred in Q3 FY16 associated with the sale of Germany retail
operations are recorded within operating income. Gain and subsequent
adjustment on sale of Germany retail operations is recorded within
interest income and other, net.
|
(5)
|
|
|
Income tax effect on non-GAAP adjustments was determined based on
the nature of the underlying items and their relevant jurisdictional
tax rates.
|
(6)
|
|
|
Other tax matters include incremental benefit from additional
domestic manufacturing deductions claimed in our U.S. consolidated
tax returns for periods prior to the years presented.
|
|
|
|
|

View source version on businesswire.com: http://www.businesswire.com/news/home/20171102006563/en/
Source: Starbucks Corporation