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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Starbucks Corporation | NASDAQ:SBUX | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.645 | 0.82% | 78.95 | 78.90 | 78.96 | 79.22 | 78.12 | 78.49 | 10,746,168 | 00:59:59 |
Q2 Consolidated Net Revenues Down 2% to $8.6 Billion, Driven by a Complex Operating Environment
Q2 GAAP and Non-GAAP EPS of $0.68; Long-Term Strategy Remains Intact
Q2 Active U.S. Starbucks® Rewards Membership Totals 32.8 Million, Up 6% Over Prior Year
Starbucks Corporation (Nasdaq: SBUX) today reported financial results for its 13-week fiscal second quarter ended March 31, 2024. GAAP results in fiscal 2024 and fiscal 2023 include items that are excluded from non-GAAP results. Please refer to the reconciliation of GAAP measures to non-GAAP measures at the end of this release for more information.
Q2 Fiscal 2024 Highlights
“In a highly challenged environment, this quarter's results do not reflect the power of our brand, our capabilities or the opportunities ahead,” commented Laxman Narasimhan, chief executive officer. “It did not meet our expectations, but we understand the specific challenges and opportunities immediately in front of us. We have a clear plan to execute and the entire organization is mobilized around it. We are very confident in our long-term and know that our Triple Shot Reinvention with Two Pumps strategy will deliver on the limitless potential of this brand,” Narasimhan added.
“While it was a difficult quarter, we learned from our own underperformance and sharpened our focus with a comprehensive roadmap of well thought out actions making the path forward clear,” commented Rachel Ruggeri, chief financial officer. “On this path, we remain committed to our disciplined approach to capital allocation as we navigate this complex and dynamic environment,” Ruggeri added.
Q2 North America Segment Results
Quarter Ended
($ in millions)
Mar 31, 2024
Apr 2, 2023
Change (%)
Change in Comparable Store Sales (1)
(3)%
12%
Change in Transactions
(7)%
6%
Change in Ticket
4%
5%
Store Count
18,065
17,482
3%
Revenues
$6,380.0
$6,380.6
0%
Operating Income
$1,148.3
$1,217.9
(6)%
Operating Margin
18.0%
19.1%
(110) bps
(1)
Includes only Starbucks® company-operated stores open 13 months or longer. Comparable store sales exclude the effects of fluctuations in foreign currency exchange rates and Siren Retail stores. Stores that are temporarily closed or operating at reduced hours remain in comparable store sales while stores identified for permanent closure have been removed.
Net revenues for the North America segment of $6.4 billion in Q2 FY24 were flat to Q2 FY23, primarily driven by a 3% decline in comparable store sales, driven by a 7% decline in comparable transactions, partially offset by a 4% increase in average ticket. This decline was offset by net new company-operated store growth of 5% over the past 12 months, as well as growth in our licensed store business.
Operating income decreased to $1.1 billion in Q2 FY24 compared to $1.2 billion in Q2 FY23. Operating margin of 18.0% contracted from 19.1% in the prior year, primarily driven by deleverage, incremental investments in store partner wages and benefits, and increased promotional activity. This contraction was partially offset by pricing and in-store operational efficiencies.
Q2 International Segment Results
Quarter Ended
($ in millions)
Mar 31, 2024
Apr 2, 2023
Change (%)
Change in Comparable Store Sales (1)
(6)%
7%
Change in Transactions
(3)%
7%
Change in Ticket
(3)%
0%
Store Count
20,886
19,152
9%
Revenues
$1,757.3
$1,854.8
(5)%
Operating Income
$233.8
$314.7
(26)%
Operating Margin
13.3%
17.0%
(370) bps
(1)
Includes only Starbucks® company-operated stores open 13 months or longer. Comparable store sales exclude the effects of fluctuations in foreign currency exchange rates and Siren Retail stores. Stores that are temporarily closed or operating at reduced hours remain in comparable store sales while stores identified for permanent closure have been removed.
Net revenues for the International segment declined 5% over Q2 FY23 to $1.8 billion in Q2 FY24, primarily driven by an approximate 5% unfavorable impact from foreign currency translation and a 6% decline in comparable store sales, driven by a 3% decline in both comparable transactions and average ticket. Also contributing were lower product and equipment sales to, and royalty revenues from, our licensees. This decline was partially offset by net new company-operated store growth of 12% over the past 12 months.
Operating income decreased to $233.8 million in Q2 FY24 compared to $314.7 million in Q2 FY23. Operating margin of 13.3% contracted from 17.0% in the prior year, primarily driven by promotional activities, incremental investments in store partner wages and benefits, as well as sales mix shift, partially offset by pricing in certain markets.
Q2 Channel Development Segment Results
Quarter Ended
($ in millions)
Mar 31, 2024
Apr 2, 2023
Change (%)
Revenues
$418.2
$480.7
(13)%
Operating Income
$216.3
$262.1
(17)%
Operating Margin
51.7%
54.5%
(280) bps
Net revenues for the Channel Development segment declined 13% over Q2 FY23 to $418.2 million in Q2 FY24, primarily due to a decline in revenue in the Global Coffee Alliance, following the sale of Seattle's Best Coffee brand in the prior year and SKU optimization.
Operating income decreased to $216.3 million in Q2 FY24 compared to $262.1 million in Q2 FY23. Operating margin of 51.7% contracted from 54.5% in the prior year, primarily due to lapping the gain on the sale of Seattle's Best Coffee brand, partially offset by growth in our North American Coffee Partnership joint venture income, sales mix shift, and lapping impairment charges against certain manufacturing assets.
Fiscal 2024 Financial Targets
The company will discuss fiscal year 2024 financial targets during its Q2 FY24 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. The company uses its website as a tool to disclose important information about the company and comply with its disclosure obligations under Regulation Fair Disclosure.
Company Update
Conference Call
Starbucks will hold a conference call today at 2:00 p.m. Pacific Time, which will be hosted by Laxman Narasimhan, ceo, and Rachel Ruggeri, cfo. The call will be webcast and can be accessed at http://investor.starbucks.com. A replay of the webcast will be available until end of day Friday, June 14, 2024.
About Starbucks
Since 1971, Starbucks Coffee Company has been committed to ethically sourcing and roasting high-quality arabica coffee. Today, with more than 38,000 stores worldwide, the company is the premier roaster and retailer of specialty coffee in the world. Through our unwavering commitment to excellence and our guiding principles, we bring the unique Starbucks Experience to life for every customer through every cup. To share in the experience, please visit us in our stores or online at stories.starbucks.com or www.starbucks.com.
Forward-Looking Statements
Certain statements contained herein and in our investor conference call related to these results are “forward-looking” statements within the meaning of applicable securities laws and regulations. Generally, these statements can be identified by the use of words such as “aim,” “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “feel,” “forecast,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “will,” “would,” and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. By their nature, forward-looking statements involve risks, uncertainties, and other factors (many beyond our control) that could cause our actual results to differ materially from our historical experience or from our current expectations or projections. Our forward-looking statements, and the risks and uncertainties related thereto, include, but are not limited to, those described under the “Risk Factors” and “Management's Discussion and Analysis of Financial Condition and Results of Operations” sections of the company’s most recently filed periodic reports on Form 10-K and Form 10-Q and in other filings with the SEC, as well as:
In addition, many of the foregoing risks and uncertainties are, or could be, exacerbated by any worsening of the global business and economic environment. A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances, and those future events or circumstances may not occur. You should not place undue reliance on the forward-looking statements, which speak only as of the date of this report. We are under no obligation to update or alter any forward-looking statements, whether as a result of new information, future events, or otherwise.
Key Metrics
The company's financial results and long-term growth model will continue to be driven by new store openings, comparable store sales growth and operating margin management. We believe these key operating metrics are useful to investors because management uses these metrics to assess the growth of our business and the effectiveness of our marketing and operational strategies.
STARBUCKS CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited, in millions, except per share data)
Quarter Ended
Quarter Ended
Mar 31,
Apr 2,
%
Mar 31,
Apr 2,
2024
2023
Change
2024
2023
As a % of total net revenues
Net revenues:
Company-operated stores
$
7,052.6
$
7,142.3
(1.3
)%
82.4
%
81.9
%
Licensed stores
1,054.5
1,069.5
(1.4
)
12.3
12.3
Other
455.9
508.0
(10.3
)
5.3
5.8
Total net revenues
8,563.0
8,719.8
(1.8
)
100.0
100.0
Product and distribution costs
2,648.7
2,801.7
(5.5
)
30.9
32.1
Store operating expenses
3,724.1
3,636.0
2.4
43.5
41.7
Other operating expenses
132.8
126.2
5.2
1.6
1.4
Depreciation and amortization expenses
371.9
341.9
8.8
4.3
3.9
General and administrative expenses
654.6
620.4
5.5
7.6
7.1
Restructuring and impairments
—
8.8
nm
—
0.1
Total operating expenses
7,532.1
7,535.0
—
88.0
86.4
Income from equity investees
68.0
51.4
32.3
0.8
0.6
Gain from sale of assets
—
91.3
nm
—
1.0
Operating income
1,098.9
1,327.5
(17.2
)
12.8
15.2
Interest income and other, net
34.1
18.4
85.3
0.4
0.2
Interest expense
(140.6
)
(136.3
)
3.2
(1.6
)
(1.6
)
Earnings before income taxes
992.4
1,209.6
(18.0
)
11.6
13.9
Income tax expense
219.9
301.3
(27.0
)
2.6
3.5
Net earnings including noncontrolling interests
772.5
908.3
(15.0
)
9.0
10.4
Net earnings attributable to noncontrolling interests
0.1
0.0
nm
0.0
0.0
Net earnings attributable to Starbucks
$
772.4
$
908.3
(15.0
)
9.0
%
10.4
%
Net earnings per common share - diluted
$
0.68
$
0.79
(13.9
)%
Weighted avg. shares outstanding - diluted
1,135.4
1,152.7
Cash dividends declared per share
$
0.57
$
0.53
Supplemental Ratios:
Store operating expenses as a % of company-operated store revenues
52.8
%
50.9
%
Effective tax rate including noncontrolling interests
22.2
%
24.9
%
Two Quarters Ended
Two Quarters Ended
Mar 31,
Apr 2,
%
Mar 31,
Apr 2,
2024
2023
Change
2024
2023
As a % of total net revenues
Net revenues:
Company-operated stores
$
14,807.9
$
14,225.7
4.1
%
82.3
%
81.6
%
Licensed stores
2,246.6
2,189.0
2.6
12.5
12.6
Other
933.8
1,019.1
(8.4
)
5.2
5.8
Total net revenues
17,988.3
17,433.8
3.2
100.0
100.0
Product and distribution costs
5,629.2
5,611.9
0.3
31.3
32.2
Store operating expenses
7,575.6
7,301.3
3.8
42.1
41.9
Other operating expenses
283.2
255.4
10.9
1.6
1.5
Depreciation and amortization expenses
737.2
669.0
10.2
4.1
3.8
General and administrative expenses
1,302.6
1,201.3
8.4
7.2
6.9
Restructuring and impairments
—
14.7
nm
—
0.1
Total operating expenses
15,527.8
15,053.6
3.2
86.3
86.3
Income from equity investees
123.8
109.2
13.4
0.7
0.6
Gain from sale of assets
—
91.3
nm
—
0.5
Operating income
2,584.3
2,580.7
0.1
14.4
14.8
Interest income and other, net
67.9
30.0
126.3
0.4
0.2
Interest expense
(280.7
)
(266.0
)
5.5
(1.6
)
(1.5
)
Earnings before income taxes
2,371.5
2,344.7
1.1
13.2
13.4
Income tax expense
574.6
581.1
(1.1
)
3.2
3.3
Net earnings including noncontrolling interests
1,796.9
1,763.6
1.9
10.0
10.1
Net earnings attributable to noncontrolling interests
0.1
0.0
nm
0.0
0.0
Net earnings attributable to Starbucks
$
1,796.8
$
1,763.6
1.9
10.0
%
10.1
%
Net earnings per common share - diluted
$
1.58
$
1.53
3.3
%
Weighted avg. shares outstanding - diluted
1,138.0
1,152.8
Cash dividends declared per share
$
1.14
$
1.06
Supplemental Ratios:
Store operating expenses as a % of company-operated store revenues
51.2
%
51.3
%
Effective tax rate including noncontrolling interests
24.2
%
24.8
%
Segment Results (in millions)
North America
Mar 31,
Apr 2,
%
Mar 31,
Apr 2,
2024
2023
Change
2024
2023
Quarter Ended
As a % of North America total net revenues
Net revenues:
Company-operated stores
$
5,724.5
$
5,742.7
(0.3
)%
89.7
%
90.0
%
Licensed stores
654.8
637.4
2.7
10.3
10.0
Other
0.7
0.5
40.0
0.0
0.0
Total net revenues
6,380.0
6,380.6
0.0
100.0
100.0
Product and distribution costs
1,767.7
1,821.7
(3.0
)
27.7
28.6
Store operating expenses
3,037.4
2,951.6
2.9
47.6
46.3
Other operating expenses
67.1
63.4
5.8
1.1
1.0
Depreciation and amortization expenses
257.1
226.3
13.6
4.0
3.5
General and administrative expenses
102.4
91.2
12.3
1.6
1.4
Restructuring and impairments
—
8.5
nm
—
0.1
Total operating expenses
5,231.7
5,162.7
1.3
82.0
80.9
Operating income
$
1,148.3
$
1,217.9
(5.7
)%
18.0
%
19.1
%
Supplemental Ratio:
Store operating expenses as a % of company-operated store revenues
53.1
%
51.4
%
Two Quarters Ended
Net revenues:
Company-operated stores
$
12,105.7
$
11,613.2
4.2
%
89.7
%
89.8
%
Licensed stores
1,392.7
1,317.4
5.7
10.3
10.2
Other
2.3
1.2
91.7
0.0
0.0
Total net revenues
13,500.7
12,931.8
4.4
100.0
100.0
Product and distribution costs
3,791.6
3,739.3
1.4
28.1
28.9
Store operating expenses
6,185.1
5,983.0
3.4
45.8
46.3
Other operating expenses
144.5
128.9
12.1
1.1
1.0
Depreciation and amortization expenses
507.5
443.1
14.5
3.8
3.4
General and administrative expenses
202.9
193.5
4.9
1.5
1.5
Restructuring and impairments
—
13.6
nm
—
0.1
Total operating expenses
10,831.6
10,501.4
3.1
80.2
81.2
Operating income
$
2,669.1
$
2,430.4
9.8
%
19.8
%
18.8
%
Supplemental Ratio:
Store operating expenses as a % of company-operated store revenues
51.1
%
51.5
%
International
Mar 31,
Apr 2,
%
Mar 31,
Apr 2,
2024
2023
Change
2024
2023
Quarter Ended
As a % of International total net revenues
Net revenues:
Company-operated stores
$
1,328.1
$
1,399.6
(5.1
)%
75.6
%
75.5
%
Licensed stores
399.7
432.1
(7.5
)
22.7
23.3
Other
29.5
23.1
27.7
1.7
1.2
Total net revenues
1,757.3
1,854.8
(5.3
)
100.0
100.0
Product and distribution costs
619.8
632.9
(2.1
)
35.3
34.1
Store operating expenses
686.7
684.4
0.3
39.1
36.9
Other operating expenses
50.0
49.9
0.2
2.8
2.7
Depreciation and amortization expenses
84.3
86.3
(2.3
)
4.8
4.7
General and administrative expenses
82.9
87.4
(5.1
)
4.7
4.7
Total operating expenses
1,523.7
1,540.9
(1.1
)
86.7
83.1
Income from equity investees
0.2
0.8
(75.0
)
0.0
0.0
Operating income
$
233.8
$
314.7
(25.7
)%
13.3
%
17.0
%
Supplemental Ratio:
Store operating expenses as a % of company-operated store revenues
51.7
%
48.9
%
Two Quarters Ended
Net revenues:
Company-operated stores
$
2,702.2
$
2,612.5
3.4
%
75.0
%
73.9
%
Licensed stores
853.9
871.6
(2.0
)
23.7
24.7
Other
47.5
50.8
(6.5
)
1.3
1.4
Total net revenues
3,603.6
3,534.9
1.9
100.0
100.0
Product and distribution costs
1,286.4
1,226.5
4.9
35.7
34.7
Store operating expenses
1,390.5
1,318.3
5.5
38.6
37.3
Other operating expenses
110.1
100.6
9.4
3.1
2.8
Depreciation and amortization expenses
168.3
167.7
0.4
4.7
4.7
General and administrative expenses
173.3
167.9
3.2
4.8
4.7
Total operating expenses
3,128.6
2,981.0
5.0
86.8
84.3
Income from equity investees
0.3
1.2
(75.0
)
0.0
0.0
Operating income
$
475.3
$
555.1
(14.4
)%
13.2
%
15.7
%
Supplemental Ratio:
Store operating expenses as a % of company-operated store revenues
51.5
%
50.5
%
Channel Development
Mar 31,
Apr 2,
%
Mar 31,
Apr 2,
2024
2023
Change
2024
2023
Quarter Ended
As a % of Channel Development total net revenues
Net revenues
$
418.2
$
480.7
(13.0
)%
Product and distribution costs
252.6
345.6
(26.9
)
60.4
%
71.9
%
Other operating expenses
15.2
12.8
18.8
3.6
2.7
Depreciation and amortization expenses
—
0.0
nm
—
0.0
General and administrative expenses
1.9
2.1
(9.5
)
0.5
0.4
Total operating expenses
269.7
360.5
(25.2
)
64.5
75.0
Income from equity investees
67.8
50.6
34.0
16.2
10.5
Gain from sale of assets
—
91.3
nm
—
19.0
Operating income
$
216.3
$
262.1
(17.5
)%
51.7
%
54.5
%
Two Quarters Ended
Net revenues
$
866.2
$
958.9
(9.7
)%
Product and distribution costs
531.5
639.8
(16.9
)
61.4
%
66.7
%
Other operating expenses
28.0
25.8
8.5
3.2
2.7
Depreciation and amortization expenses
—
0.1
nm
—
0.0
General and administrative expenses
4.2
4.1
2.4
0.5
0.4
Total operating expenses
563.7
669.8
(15.8
)
65.1
69.9
Income from equity investees
123.5
108.0
14.4
14.3
11.3
Gain from sale of assets
—
91.3
nm
—
9.5
Operating income
$
426.0
$
488.4
(12.8
)%
49.2
%
50.9
%
Corporate and Other
Mar 31,
Apr 2,
%
2024
2023
Change
Quarter Ended
Net revenues
$
7.5
$
3.7
102.7
%
Product and distribution costs
8.6
1.5
473.3
Other operating expenses
0.5
0.1
400.0
Depreciation and amortization expenses
30.5
29.3
4.1
General and administrative expenses
467.4
439.7
6.3
Restructuring and impairments
—
0.3
nm
Total operating expenses
507.0
470.9
7.7
Operating loss
$
(499.5
)
$
(467.2
)
6.9
%
Two Quarters Ended
Net revenues
$
17.8
$
8.2
117.1
%
Product and distribution costs
19.7
6.3
212.7
Other operating expenses
0.6
0.1
500.0
Depreciation and amortization expenses
61.4
58.1
5.7
General and administrative expenses
922.2
835.8
10.3
Restructuring and impairments
—
1.1
nm
Total operating expenses
1,003.9
901.4
11.4
Operating loss
$
(986.1
)
$
(893.2
)
10.4
%
STARBUCKS CORPORATION
CONSOLIDATED BALANCE SHEETS
(unaudited, in millions, except per share data)
Mar 31, 2024
Oct 1, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
2,764.1
$
3,551.5
Short-term investments
362.5
401.5
Accounts receivable, net
1,110.3
1,184.1
Inventories
1,744.0
1,806.4
Prepaid expenses and other current assets
484.1
359.9
Total current assets
6,465.0
7,303.4
Long-term investments
280.4
247.4
Equity investments
440.2
439.9
Property, plant and equipment, net
7,817.4
7,387.1
Operating lease, right-of-use asset
8,686.5
8,412.6
Deferred income taxes, net
1,746.5
1,769.8
Other long-term assets
587.2
546.5
Other intangible assets
110.7
120.5
Goodwill
3,229.3
3,218.3
TOTAL ASSETS
$
29,363.2
$
29,445.5
LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIT)
Current liabilities:
Accounts payable
$
1,487.4
$
1,544.3
Accrued liabilities
2,016.0
2,145.1
Accrued payroll and benefits
704.8
828.3
Current portion of operating lease liability
1,406.6
1,275.3
Stored value card liability and current portion of deferred revenue
1,872.0
1,700.2
Short-term debt
42.1
33.5
Current portion of long-term debt
—
1,818.6
Total current liabilities
7,528.9
9,345.3
Long-term debt
15,547.5
13,547.6
Operating lease liability
8,180.3
7,924.8
Deferred revenue
6,058.4
6,101.8
Other long-term liabilities
490.3
513.8
Total liabilities
37,805.4
37,433.3
Shareholders’ deficit:
Common stock ($0.001 par value) — authorized, 2,400.0 shares; issued and outstanding, 1,132.7 and 1,142.6 shares, respectively
1.1
1.1
Additional paid-in capital
141.7
38.1
Retained deficit
(7,970.7
)
(7,255.8
)
Accumulated other comprehensive income/(loss)
(621.5
)
(778.2
)
Total shareholders’ deficit
(8,449.4
)
(7,994.8
)
Noncontrolling interests
7.2
7.0
Total deficit
(8,442.2
)
(7,987.8
)
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY/(DEFICIT)
$
29,363.2
$
29,445.5
STARBUCKS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in millions)
Two Quarters Ended
Mar 31, 2024
Apr 2, 2023
OPERATING ACTIVITIES:
Net earnings including noncontrolling interests
$
1,796.9
$
1,763.6
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization
783.6
709.3
Deferred income taxes, net
4.0
2.6
Income earned from equity method investees
(132.3
)
(109.9
)
Distributions received from equity method investees
154.5
88.0
Gain on sale of assets
—
(91.3
)
Stock-based compensation
173.0
159.3
Non-cash lease costs
689.5
584.7
Loss on retirement and impairment of assets
42.5
75.6
Other
16.3
22.6
Cash provided by/(used in) changes in operating assets and liabilities:
Accounts receivable
86.4
26.2
Inventories
64.5
194.6
Income taxes payable
(84.9
)
15.8
Accounts payable
(51.6
)
(51.2
)
Deferred revenue
128.9
54.0
Operating lease liability
(635.1
)
(621.8
)
Other operating assets and liabilities
(146.3
)
(461.3
)
Net cash provided by operating activities
2,889.9
2,360.8
INVESTING ACTIVITIES:
Purchases of investments
(472.0
)
(247.7
)
Sales of investments
0.5
1.9
Maturities and calls of investments
498.7
270.0
Additions to property, plant and equipment
(1,255.0
)
(1,002.0
)
Proceeds from sale of assets
—
110.0
Other
(36.2
)
(39.2
)
Net cash used in investing activities
(1,264.0
)
(907.0
)
FINANCING ACTIVITIES:
Net (payments)/proceeds from issuance of commercial paper
—
(175.0
)
Net proceeds from issuance of short-term debt
93.2
52.8
Repayments of short-term debt
(80.5
)
—
Net proceeds from issuance of long-term debt
1,995.3
1,497.8
Repayments of long-term debt
(1,825.1
)
(1,000.0
)
Proceeds from issuance of common stock
58.4
129.8
Cash dividends paid
(1,293.5
)
(1,217.4
)
Repurchase of common stock
(1,266.7
)
(479.3
)
Minimum tax withholdings on share-based awards
(94.1
)
(81.4
)
Other
(10.6
)
(10.7
)
Net cash used in financing activities
(2,423.6
)
(1,283.4
)
Effect of exchange rate changes on cash and cash equivalents
10.4
83.0
Net increase/(decrease) in cash and cash equivalents
(787.3
)
253.4
CASH AND CASH EQUIVALENTS:
Beginning of period
3,551.5
2,818.4
End of period
$
2,764.1
$
3,071.8
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest, net of capitalized interest
$
275.6
$
250.4
Income taxes
$
850.9
$
636.8
Supplemental Information
The following supplemental information is provided for historical and comparative purposes.
U.S. Supplemental Data
Quarter Ended
($ in millions)
Mar 31, 2024
Apr 2, 2023
Change (%)
Revenues
$5,956.4
$5,955.8
0%
Change in Comparable Store Sales (1)
(3)%
12%
Change in Transactions
(7)%
6%
Change in Ticket
4%
6%
Store Count
16,600
16,044
3%
(1)
Includes only Starbucks® company-operated stores open 13 months or longer. Comparable store sales exclude Siren Retail stores. Stores that are temporarily closed or operating at reduced hours remain in comparable store sales while stores identified for permanent closure have been removed.
China Supplemental Data
Quarter Ended
($ in millions)
Mar 31, 2024
Apr 2, 2023
Change (%)
Revenues
$705.8
$763.8
(8)%
Change in Comparable Store Sales (1)
(11)%
3%
Change in Transactions
(4)%
4%
Change in Ticket
(8)%
(1)%
Store Count
7,093
6,243
14%
(1)
Includes only Starbucks® company-operated stores open 13 months or longer. Comparable store sales exclude the effects of fluctuations in foreign currency exchange rates and Siren Retail stores. Stores that are temporarily closed or operating at reduced hours remain in comparable store sales while stores identified for permanent closure have been removed.
Store Data
Net stores opened/(closed) and transferred during the period
Quarter Ended
Two Quarters Ended
Stores open as of
Mar 31, 2024
Apr 2, 2023
Mar 31, 2024
Apr 2, 2023
Mar 31, 2024
Apr 2, 2023
North America:
Company-operated stores
112
91
199
131
10,827
10,347
Licensed stores
22
10
56
56
7,238
7,135
Total North America
134
101
255
187
18,065
17,482
International:
Company-operated stores
132
174
318
271
9,282
8,308
Licensed stores
98
189
340
465
11,604
10,844
Total International
230
363
658
736
20,886
19,152
Total Company
364
464
913
923
38,951
36,634
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 (GAAP). When provided, our non-GAAP financial measures of non-GAAP general and administrative expenses (G&A), non-GAAP operating income, non-GAAP operating income growth (loss), non-GAAP operating margin, non-GAAP effective tax rate and non-GAAP earnings per share exclude the below-listed items and their related tax impacts, as they do not contribute to a meaningful evaluation of the company’s future operating performance or comparisons to the company's past operating performance. The GAAP measures most directly comparable to non-GAAP G&A, non-GAAP operating income, non-GAAP operating income growth (loss), non-GAAP operating margin, non-GAAP effective tax rate and non-GAAP earnings per share are G&A, operating income, operating income growth (loss), operating margin, effective tax rate and diluted net earnings per share, respectively.
Non-GAAP Exclusion
Rationale
Restructuring and impairment costs
Management excludes restructuring and impairment costs for reasons discussed above. These expenses are anticipated to be completed within a finite period of time.
Transaction and integration-related costs
Management excludes transaction and integration costs for reasons discussed above. Additionally, we incur certain costs associated with certain divestiture activities. The majority of these costs will be recognized over a finite period of time.
Gain on sale of assets
Management excludes the gain related to the sale of assets to Nestlé, primarily consisting of intellectual properties associated with the Seattle's Best Coffee brand, as these items do not reflect future gains or tax impacts for reasons discussed above.
The Company also presents constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present the constant currency information, current period results for entities reporting in currencies other than United States dollars are converted into United States dollars using the average monthly exchange rates from the comparative period rather than the actual exchange rates in effect during the respective periods, excluding related hedging activities. We believe the presentation of results on a constant currency basis in addition to GAAP results helps users better understand our performance, because it excludes the effects of foreign currency volatility that are not indicative of our underlying operating results.
Non-GAAP G&A, non-GAAP operating income, non-GAAP operating income growth (loss), non-GAAP operating margin, non-GAAP effective tax rate, non-GAAP earnings per share and constant currency 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
NET REVENUE CONSTANT CURRENCY RECONCILIATION
(unaudited, in millions)
Quarter Ended
Consolidated
Revenue for the quarter ended Apr 2, 2023 as reported (GAAP)
$
8,719.8
Revenue for the quarter ended Mar 31, 2024 as reported (GAAP)
$
8,563.0
Change (%)
(1.8
)%
Constant Currency Impact (%)
1.2
%
Change in Constant Currency (%)
(0.6
)%
STARBUCKS CORPORATION
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES
(unaudited, in millions, except per share data)
Quarter Ended
Consolidated
Mar 31, 2024
Apr 2, 2023
Change
Constant Currency Impact
Change in Constant Currency
Operating income, as reported (GAAP)
$
1,098.9
$
1,327.5
(17.2)%
Restructuring and impairment costs (1)
—
8.8
Transaction and integration-related costs (2)
—
0.1
Gain from sale of assets
—
(91.3
)
Non-GAAP operating income
$
1,098.9
$
1,245.1
(11.7)%
1.5%
(10.2)%
Operating margin, as reported (GAAP)
12.8
%
15.2
%
(240) bps
Restructuring and impairment costs (1)
—
0.1
Transaction and integration-related costs (2)
—
0.0
Gain from sale of assets
—
(1.0
)
Non-GAAP operating margin
12.8
%
14.3
%
(150) bps
10 bps
(140) bps
Diluted net earnings per share, as reported (GAAP)
$
0.68
$
0.79
(13.9)%
Restructuring and impairment costs (1)
—
0.01
Transaction and integration-related costs (2)
—
0.00
Gain from sale of assets
—
(0.08
)
Income tax effect on Non-GAAP adjustments (3)
—
0.02
Non-GAAP EPS
$
0.68
$
0.74
(8.1)%
1.3%
(6.8)%
(1)
Represents costs associated with our restructuring efforts.
(2)
The second quarter of fiscal 2023 includes transaction-related expenses related to the sale of our Seattle's Best Coffee brand.
(3)
Adjustments were determined based on the nature of the underlying items and their relevant jurisdictional tax rates.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240430499222/en/
Starbucks Contact, Investor Relations: Tiffany Willis investorrelations@starbucks.com
Starbucks Contact, Media: Emily Albright press@starbucks.com
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