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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 | |
---|---|---|---|---|---|---|---|---|---|---|
-1.29 | -1.72% | 73.64 | 73.62 | 73.64 | 75.51 | 73.5787 | 75.27 | 6,509,301 | 16:19:36 |
Strong Holiday Performance Drives 9% Comp Growth in the U.S. and Americas, 8% Globally; Global Traffic up 4%
Consolidated Net Revenues Rise 12% to a Record $5.4 Billion; Channel Development Revenues Jump 16%
Consolidated Operating Income up 16% to a Record $1.1 Billion; GAAP EPS of $0.46; Non-GAAP EPS up 15% to a Record $0.46
Dollars Loaded on Starbucks Cards Increase 18% to a Record $1.9 Billion
Starbucks Corporation (NASDAQ: SBUX) today reported financial results for its 13-week fiscal first quarter ended December 27, 2015. Fiscal 2016 and fiscal 2015 GAAP results include items which are excluded from non-GAAP results. Please refer to the reconciliation of GAAP measures to non-GAAP measures at the end of this release for more information.
Q1 Fiscal 2016 Highlights:
“Starbucks record Q1 2016 financial and operating results, highlighted by comp sales increases of 9% in the U.S., 8% globally, another 4% increase in global traffic - and record performance from our Channel Development segment - underscore the accelerating strength and relevance of the Starbucks brand around the world,” said Howard Schultz, Starbucks chairman and ceo. “Successful retail, CPG, digital, mobile, loyalty, card and investment strategies are combining to accelerate our revenue growth and drive significant margin expansion and EPS leverage.”
“We’ve entered fiscal 2016 with another record-breaking quarter and a continuation of the accelerating momentum we saw in our business throughout 2015,” said Scott Maw, Starbucks cfo. “The investments we are making in our people and our business are driving record, industry leading operating and financial performance and consistently strong comp growth, and are both paying off today and setting us up for continued strong performance into the future.”
First Quarter Fiscal 2016 Summary
Quarter Ended Dec 27, 2015 Comparable Store Sales(1) Sales Growth Change in Transactions Change in Ticket Consolidated(2) 8% 4% 4% Americas 9% 4% 5% CAP(2) 5% 4% 2% EMEA 1% 1% 0% (1) Includes only Starbucks company-operated stores open 13 months or longer. (2) Beginning in December of fiscal 2016, comparable store sales include the results of the 1,009 company-operated stores acquired as part of the acquisition of Starbucks Japan in the first quarter of fiscal 2015. Operating Results Quarter Ended ($ in millions, except per share amounts) Dec 27, 2015 Dec 28, 2014 Change Net New Stores 528 512 16 Revenues $5,373.5 $4,803.2 12% Operating Income $1,058.0 $915.5 16% Operating Margin 19.7% 19.1% 60 bps EPS $0.46 $0.65 (29)%Consolidated net revenues were $5.4 billion in Q1 FY16, an increase of 12% over Q1 FY15. The increase was primarily driven by an 8% increase in global comparable store sales and the opening of 1,693 net new stores over the past 12 months.
Consolidated operating income grew 16% to $1,058.0 million in Q1 FY16, up from $915.5 million in Q1 FY15. Consolidated operating margin expanded 60 basis points to 19.7%. The increase was primarily due to sales leverage and was partially offset by investments in our partners (employees) and digital platforms.
Q1 Americas Segment Results
Quarter Ended ($ in millions) Dec 27, 2015 Dec 28, 2014 Change Net New Stores 171 210 (39) Revenues $3,726.2 $3,366.9 11% Operating Income $934.6 $817.5 14% Operating Margin 25.1% 24.3% 80 bpsNet revenues for the Americas segment were $3.7 billion in Q1 FY16, an increase of 11% over Q1 FY15. The increase was driven by a 9% increase in comparable store sales and incremental revenues from 573 net new store openings over the past 12 months.
Operating income of $934.6 million in Q1 FY16 grew 14% versus $817.5 million in Q1 FY15. Operating margin of 25.1% expanded 80 basis points due to sales leverage and savings in cost of sales, primarily dairy, and was partially offset by investments in our partners (employees) and digital platforms.
Q1 China/Asia Pacific Segment Results
Quarter Ended ($ in millions) Dec 27, 2015 Dec 28, 2014 Change Net New Stores 281 234 47 Revenues $653.6 $495.8 32% Operating Income $127.1 $108.3 17% Operating Margin 19.4% 21.8% (240) bpsNet revenues for the China/Asia Pacific segment grew 32% over Q1 FY15 to $653.6 million in Q1 FY16. The increase was primarily driven by incremental revenues from the acquisition of Starbucks Japan during Q1 FY15. Also contributing were incremental revenues from 885 net new store openings over the past 12 months and a 5% increase in comparable store sales.
Operating income grew 17% over Q1 FY15 to $127.1 million in Q1 FY16. Operating margin declined 240 basis points to 19.4% primarily due to the impact of our ownership change in Starbucks Japan, which drove a 330 basis point decline. The remaining 90 basis point expansion was primarily due to sales leverage and higher income from our joint venture operations, and was partially offset by increased store operating expenses related to higher compensation and benefits.
Q1 EMEA Segment Results
Quarter Ended ($ in millions) Dec 27, 2015 Dec 28, 2014 Change Net New Stores 79 58 21 Revenues $313.0 $333.3 (6)% Operating Income $48.1 $50.0 (4)% Operating Margin 15.4% 15.0% 40 bpsNet revenues for the EMEA segment were $313.0 million in Q1 FY16, a 6% decrease versus Q1 FY15. The decrease was primarily due to unfavorable foreign currency translation and the shift in the portfolio towards more licensed stores. Partially offsetting the decrease were incremental revenues from the opening of 263 net new licensed stores over the past 12 months.
Operating income decreased 4% to $48.1 million in Q1 FY16, down from $50 million in Q1 FY15. Operating margin expanded 40 basis points to 15.4%, primarily driven by gains on the sales of certain store assets in the region which were partially offset by higher cost of sales in our licensed stores operations and lower sales from our company-operated stores business.
Q1 Channel Development Segment Results
Quarter Ended ($ in millions) Dec 27, 2015 Dec 28, 2014 Change Revenues $512.1 $442.6 16% Operating Income $193.3 $157.5 23% Operating Margin 37.7% 35.6% 210 bpsNet revenues for the Channel Development segment grew 16% over Q1 FY15 to $512.1 million in Q1 FY16, primarily driven by increased sales of premium single-serve products. Also contributing to the increase were higher foodservice and packaged coffee sales.
Operating income of $193.3 million in Q1 FY16 increased 23% compared to Q1 FY15. Operating margin increased 210 basis points to 37.7%, primarily driven by higher income from our North American Coffee Partnership and leverage on cost of sales.
Q1 All Other Segments Results
Quarter Ended ($ in millions) Dec 27, 2015 Dec 28, 2014 Change Net New Stores (3) 10 (13) Revenues $168.6 $164.6 2% Operating Income $5.9 $10.2 (42)%Fiscal 2016 Targets
Starbucks fiscal year 2016 will include an extra week in the fourth quarter, as fiscal 2016 is a 53-week year for the company.
The company reiterates the following FY16 targets, unless otherwise noted. FY16 targets are based on actual FY15 non-GAAP results and projected FY16 non-GAAP results as noted. Projected FY16 non-GAAP adjustments relate to the acquisition of Starbucks Japan; please refer to the reconciliation of GAAP measures to non-GAAP measures at the end of this release.
Company Updates
Conference Call
Starbucks will hold a conference call today at 2:00 p.m. Pacific Time, which will be hosted by Howard Schultz, chairman and ceo; Kevin Johnson, president and coo; Scott Maw, cfo; and Michael Conway, president, Global Channel Development. 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, February 20, 2016.
About Starbucks
Since 1971, Starbucks Coffee Company has been committed to ethically sourcing and roasting high-quality arabica coffee. Today, with stores around the globe, the company is the premier roaster and retailer of specialty coffee in the world. Through our unwavering commitment to excellence and our guiding principles, we bring the unique Starbucks Experience to life for every customer through every cup. To share in the experience, please visit us in our stores or online at news.starbucks.com or www.starbucks.com.
Forward-Looking Statements
This release contains forward-looking statements relating to certain company initiatives, strategies and plans, as well as trends in or expectations regarding our diversified business model, the strength, momentum, health and potential of our business, operations and brand, our innovation, growth and growth opportunities and related investments, shareholder value, earnings per share, revenues, operating margins, profitability, capital expenditures, tax rate, anticipated costs related to the integration of Starbucks Japan, comparable store sales and net new stores. These forward-looking statements are based on currently available operating, financial and competitive information and are subject to a number of significant risks and uncertainties. Actual future results may differ materially depending on a variety of factors including, but not limited to, fluctuations in U.S. and international economies and currencies, our ability to preserve, grow and leverage our brands, potential negative effects of material breaches of our information technology systems to the extent we experience a material breach, potential negative effects of incidents involving food-borne illnesses, food tampering, food contamination or mislabeling, material failures of our information technology systems, costs associated with, and the successful execution of, the company’s initiatives and plans, including the integration of Starbucks Japan, the acceptance of the company’s products by our customers, the impact of competition, coffee, dairy and other raw materials prices and availability, the effect of legal proceedings, and other risks detailed in the company filings with the Securities and Exchange Commission, including the “Risk Factors” section of Starbucks Annual Report on Form 10-K for the fiscal year ended September 27, 2015. The company assumes no obligation to update any of these forward-looking statements.
STARBUCKS CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS(unaudited, in millions, except per share data)
Quarter Ended Quarter EndedDec 27,
2015
Dec 28,
2014
%Change
Dec 27,
2015
Dec 28,
2014
As a % of total
net revenues
Net revenues: Company-operated stores $ 4,210.6 $ 3,772.8 11.6 % 78.4 % 78.5 % Licensed stores 540.6 483.9 11.7 10.1 10.1 CPG, foodservice and other 622.3 546.5 13.9 11.6 11.4 Total net revenues 5,373.5 4,803.2 11.9 100.0 100.0 Cost of sales including occupancy costs 2,186.2 1,991.2 9.8 40.7 41.5 Store operating expenses 1,506.2 1,315.5 14.5 28.0 27.4 Other operating expenses 146.2 129.4 13.0 2.7 2.7 Depreciation and amortization expenses 235.5 206.0 14.3 4.4 4.3 General and administrative expenses 305.5 298.4 2.4 5.7 6.2 Total operating expenses 4,379.6 3,940.5 11.1 81.5 82.0 Income from equity investees 64.1 52.8 21.4 1.2 1.1 Operating income 1,058.0 915.5 15.6 19.7 19.1 Gain resulting from acquisition of joint venture — 390.6 (100.0 ) — 8.1 Interest income and other, net 8.1 9.7 (16.5 ) 0.2 0.2 Interest expense (16.5 ) (16.3 ) 1.2 (0.3 ) (0.3 ) Earnings before income taxes 1,049.6 1,299.5 (19.2 ) 19.5 27.1 Income taxes 361.9 315.0 14.9 6.7 6.6 Net earnings including noncontrolling interests 687.7 984.5 (30.1 ) 12.8 20.5 Net earnings/(loss) attributable to noncontrolling interests 0.1 1.4 (92.9 ) — — Net earnings attributable to Starbucks $ 687.6 $ 983.1 (30.1 ) 12.8 % 20.5 % Net earnings per common share - diluted $ 0.46 $ 0.65 (29.2)%
Weighted avg. shares outstanding - diluted 1,503.3 1,516.8 Cash dividends declared per share $ 0.20 $ 0.16 Supplemental Ratios: Store operating expenses as a percentage of company-operated store revenues 35.8 % 34.9 % Effective tax rate including noncontrolling interests 34.5 % 24.2 %Segment Results (in millions)
Americas
Dec 27,
2015
Dec 28,
2014
%
Change
Dec 27,
2015
Dec 28,
2014
Quarter Ended
As a % of Americas
total net revenues
Net revenues: Company-operated stores $ 3,330.7 $ 3,010.6 10.6 % 89.4 % 89.4 % Licensed stores 387.6 346.2 12.0 10.4 10.3 Foodservice and other 7.9 10.1 (21.8 ) 0.2 0.3 Total net revenues 3,726.2 3,366.9 10.7 100.0 100.0 Cost of sales including occupancy costs 1,346.9 1,261.0 6.8 36.1 37.5 Store operating expenses 1,226.8 1,084.4 13.1 32.9 32.2 Other operating expenses 32.6 30.2 7.9 0.9 0.9 Depreciation and amortization expenses 140.8 127.1 10.8 3.8 3.8 General and administrative expenses 44.5 46.7 (4.7 ) 1.2 1.4 Total operating expenses 2,791.6 2,549.4 9.5 74.9 75.7 Operating income $ 934.6 $ 817.5 14.3 % 25.1 % 24.3 % Supplemental Ratios: Store operating expenses as a percentage of company-operated store revenues 36.8 % 36.0 %China/Asia Pacific (CAP)
Dec 27,
2015
Dec 28,
2014
%
Change
Dec 27,
2015
Dec 28,
2014
Quarter Ended
As a % of CAP
total net revenues
Net revenues: Company-operated stores $ 580.1 $ 421.8 37.5 % 88.8 % 85.1 % Licensed stores 72.2 73.2 (1.4 ) 11.0 14.8 Foodservice and other 1.3 0.8 62.5 0.2 0.2 Total net revenues 653.6 495.8 31.8 100.0 100.0 Cost of sales including occupancy costs 295.0 233.6 26.3 45.1 47.1 Store operating expenses 175.3 117.7 48.9 26.8 23.7 Other operating expenses 14.8 15.1 (2.0 ) 2.3 3.0 Depreciation and amortization expenses 42.1 28.1 49.8 6.4 5.7 General and administrative expenses 30.5 25.7 18.7 4.7 5.2 Total operating expenses 557.7 420.2 32.7 85.3 84.8 Income from equity investees 31.2 32.7 (4.6 ) 4.8 6.6 Operating income $ 127.1 $ 108.3 17.4 % 19.4 % 21.8 % Supplemental Ratios: Store operating expenses as a percentage of company-operated store revenues 30.2 % 27.9 %EMEA
Dec 27,
2015
Dec 28,
2014
%
Change
Dec 27,
2015
Dec 28,
2014
Quarter Ended
As a % of EMEA
total net revenues
Net revenues: Company-operated stores $ 218.9 $ 257.6 (15.0 )% 69.9 % 77.3 % Licensed stores 79.7 63.3 25.9 25.5 19.0 Foodservice 14.4 12.4 16.1 4.6 3.7 Total net revenues 313.0 333.3 (6.1 ) 100.0 100.0 Cost of sales including occupancy costs 151.4 156.2 (3.1 ) 48.4 46.9 Store operating expenses 73.9 85.8 (13.9 ) 23.6 25.7 Other operating expenses 14.8 13.7 8.0 4.7 4.1 Depreciation and amortization expenses 11.5 13.8 (16.7 ) 3.7 4.1 General and administrative expenses 14.5 14.0 3.6 4.6 4.2 Total operating expenses 266.1 283.5 (6.1 ) 85.0 85.1 Income from equity investees 1.2 0.2 500.0 0.4 0.1 Operating income $ 48.1 $ 50.0 (3.8 )% 15.4 % 15.0 % Supplemental Ratios: Store operating expenses as a percentage of company-operated store revenues 33.8 % 33.3 %Channel Development
Dec 27, 2015
Dec 28, 2014
%
Change
Dec 27, 2015
Dec 28, 2014
Quarter Ended
As a % of
Channel Development
total net revenues
Net revenues: CPG $ 399.2 $ 343.8 16.1 % 78.0 % 77.7 % Foodservice 112.9 98.8 14.3 22.0 22.3 Total net revenues 512.1 442.6 15.7 100.0 100.0 Cost of sales 285.4 249.3 14.5 55.7 56.3 Other operating expenses 60.3 51.0 18.2 11.8 11.5 Depreciation and amortization expenses 0.7 0.6 16.7 0.1 0.1 General and administrative expenses 4.1 4.1 — 0.8 0.9 Total operating expenses 350.5 305.0 14.9 68.4 68.9 Income from equity investees 31.7 19.9 59.3 6.2 4.5 Operating income $ 193.3 $ 157.5 22.7 % 37.7 % 35.6 %
All Other Segments
Dec 27,
2015
Dec 28,
2014
%
Change
Quarter Ended
Net revenues: Company-operated stores $ 80.9 $ 82.8 (2.3 )% Licensed stores 1.1 1.2 (8.3 ) CPG, foodservice and other 86.6 80.6 7.4 Total net revenues 168.6 164.6 2.4 Cost of sales including occupancy costs 95.3 93.3 2.1 Store operating expenses 30.2 27.6 9.4 Other operating expenses 23.7 19.5 21.5 Depreciation and amortization expenses 3.6 4.0 (10.0 ) General and administrative expenses 9.9 10.0 (1.0 ) Total operating expenses 162.7 154.4 5.4 Operating income $ 5.9 $ 10.2 (42.2 )%Supplemental Information
The following supplemental information is provided for historical and comparative purposes.
U.S. Supplemental Data
Quarter Ended ($ in millions) Dec 27, 2015 Dec 28, 2014 Change Revenues $3,410.8 $3,022.0 13% Comparable Store Sales Growth(1) 9% 5% Change in Transactions 4% 2% Change in Ticket 5% 4%(1) Includes only Starbucks company-operated stores open 13 months or longer.
Store Data
Net stores opened (closed) and
transferred during the period
Quarter Ended Stores open as ofDec 27,
2015
Dec 28,
2014
Dec 27,
2015
Dec 28,
2014
Americas: Company-operated stores 81 67 8,752 8,462 Licensed stores90
143 6,222 5,939 Total Americas 171 210 14,974 14,401 China/Asia Pacific(1): Company-operated stores 90 1,071 2,542 2,203 Licensed stores 191 (837 ) 3,201 2,655 Total China/Asia Pacific 281 234 5,743 4,858 EMEA: Company-operated stores (39 ) (7 ) 698 810 Licensed stores 118 65 1,743 1,388 Total EMEA 79 58 2,441 2,198 All Other Segments: Company-operated stores (1 ) 9 374 378 Licensed stores (2 ) 1 39 43 Total All Other Segments (3 ) 10 413 421 Total Company 528 512 23,571 21,878(1) China/Asia Pacific store data includes the transfer of 1,009 Japan stores from licensed stores to company-operated as a result of the acquisition of Starbucks Japan in the first quarter of fiscal 2015.
Non-GAAP Disclosure
In addition to the GAAP results provided in this release, the company provides consolidated non-GAAP operating income, consolidated non-GAAP operating margin and consolidated non-GAAP earnings per share ("non-GAAP EPS") for Q1 fiscal 2016 and fiscal 2015; China/Asia Pacific (“CAP”) segment non-GAAP operating income and non-GAAP operating margin for Q1 fiscal 2016 and fiscal 2015; and consolidated non-GAAP EPS for Q2 and full year fiscal 2015, as well as projected consolidated non-GAAP EPS for Q2 and full year fiscal 2016. These non-GAAP financial measures are not in accordance with, or alternatives for, generally accepted accounting principles in the United States. The GAAP measures most directly comparable to non-GAAP operating income, non-GAAP operating margin, and non-GAAP EPS are operating income, operating margin, and diluted net earnings per share, respectively. The company’s management believes that providing these non-GAAP financial measures better enables investors to understand and evaluate the company’s historical and prospective operating performance.
The consolidated Q1 fiscal 2016 as well as the consolidated Q1 and Q2 fiscal 2015 non-GAAP financial measures exclude certain Starbucks Japan acquisition-related items, specifically amortization expense from acquired intangible assets and transaction and integration costs. The Q1 fiscal 2016 and fiscal 2015 CAP segment non-GAAP financial measures exclude the amortization expense from acquired intangible assets related to the acquisition of Starbucks Japan. The Q1 fiscal 2016 CAP segment non-GAAP financial measures also exclude integration costs, including incremental information technology and compensation-related costs associated with the acquisition. The consolidated Q1 and full year fiscal 2015 non-GAAP EPS financial measures exclude the Starbucks Japan acquisition-related items as well as a gain resulting from a fair value adjustment of Starbucks preexisting 39.5% ownership interest in Starbucks Japan prior to the acquisition. The consolidated full year fiscal 2015 non-GAAP EPS financial measure also excludes losses and costs related to the redemption of the company's $550 million of 6.250% 2017 Senior Notes and an incremental tax benefit related to a U.S. manufacturing deduction. Losses and costs related to the redemption are included as debt extinguishment-related items. Management excludes the acquisition-related transaction costs described above because they believe these items do not reflect expected future expenses and do not contribute to a meaningful evaluation of the company’s future operating performance or comparisons to the company’s past operating performance. In addition, management believes it is useful to exclude the integration costs and the amortization of the acquired intangible assets when evaluating performance because they are not representative of our core business operations. Although these items will affect earnings per share beyond the current fiscal year, the majority of these costs will be recognized over a finite period of time. More specifically, integration costs are expected to be concentrated in the first several years post-acquisition. Additionally, the amounts of the acquired intangible assets are specific to the transaction and the related amortization was fixed at the time of acquisition and generally cannot subsequently be changed or influenced by management in a future period. Management excludes the fair value gain, debt extinguishment-related items and the incremental tax benefit because they believe these items do not reflect future gains, losses, costs or tax benefits and do not contribute to a meaningful evaluation of the company’s fiscal 2015 operating performance or comparisons of the company’s fiscal 2015 operating performance to the company’s past or future operating performance.
The projected consolidated non-GAAP EPS for Q2 and full year fiscal 2016 financial measures exclude certain Starbucks Japan acquisition-related items comprised of projected amortization expense from acquired intangible assets and transaction and integration costs. Management is excluding these items from our projected non-GAAP measures for the same reasons described above.
These non-GAAP financial measures may have limitations as analytical tools, and these measures should not be considered in isolation or as a substitute for analysis of the company’s results as reported under GAAP. Other companies may calculate these non-GAAP financial measures differently than the company does, limiting the usefulness of those measures for comparative purposes.
STARBUCKS CORPORATION RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES(unaudited)
Quarter EndedDec 27,
2015
Dec 28,
2014
ChangeConsolidated
Operating income, as reported (GAAP) $ 1,058.0 $ 915.515.6
%
Starbucks Japan acquisition-related items - other(1) 12.3 19.3 Non-GAAP operating income $ 1,070.3 $ 934.814.5
% Operating margin, as reported (GAAP) 19.7 % 19.1 % 60 bps Starbucks Japan acquisition-related items - other(1) 0.2 0.4 Non-GAAP operating margin 19.9 % 19.5 % 40 bps Diluted net earnings per share, as reported (GAAP) $ 0.46 $ 0.65(29.2
)% Starbucks Japan acquisition-related items - gain(2) — (0.26 ) Starbucks Japan acquisition-related items - other(1) 0.01 0.01 Non-GAAP net earnings per share $ 0.46 $ 0.4015.0
%China/Asia Pacific (CAP)
Operating income, as reported (GAAP) $ 127.1 $ 108.317.4
% Starbucks Japan acquisition-related items(3) 12.1 7.7 Non-GAAP operating income $ 139.2 $ 116.020.0
% Operating margin, as reported (GAAP) 19.4 % 21.8 % (240 ) bps Starbucks Japan acquisition-related items(3) 1.9 1.6 Non-GAAP operating margin 21.3 % 23.4 % (210 ) bps(1) Includes ongoing amortization expense of acquired intangible assets and transaction and integration costs, such as incremental information technology ("IT") and compensation-related costs associated with the acquisition.
(2) Gain represents the fair value adjustment of Starbucks preexisting 39.5% ownership interest in Starbucks Japan upon acquisition.
(3) Includes ongoing amortization expense of acquired intangible assets associated with the acquisition; the first quarter of FY16 also includes post-acquisition integration costs, including incremental IT and compensation-related costs.
Quarter EndedMar 27,
2016
Mar 29,
2015
Consolidated
(Projected) (As Reported) Change Diluted net earnings per share (GAAP) $0.37 - $0.38 $ 0.33 12% - 15% Starbucks Japan acquisition-related items - other(1) 0.01 0.01 Non-GAAP net earnings per share $0.38 - $0.39 $ 0.33 15% - 18% Year EndedOct 2,
2016
Sep 27,
2015
Consolidated
(Projected53-weeks)
(As Reported52-weeks)
Change Diluted net earnings per share (GAAP) $1.84 - $1.86 $ 1.82 1% - 2% Starbucks Japan acquisition-related items - gain(2) — (0.26 ) Starbucks Japan acquisition-related items - other(1) 0.03 0.03 Debt extinguishment-related items(3) — 0.03 Tax benefit from domestic manufacturing deduction(4)—
(0.04 ) Non-GAAP net earnings per share $1.87 - $1.89 $ 1.58 18% - 20%(1) Includes ongoing amortization expense of acquired intangible assets and transaction and integration costs, such as incremental information technology ("IT") and compensation-related costs associated with the acquisition.
(2) Gain represents the fair value adjustment of Starbucks preexisting 39.5% ownership interest in Starbucks Japan upon acquisition.
(3) Represents the loss on extinguishment of debt ($61.1M), which is comprised of the cost of the optional redemption provision, unamortized debt issuance costs, and unamortized discount associated with the $550 million of 6.250% 2017 Senior Notes redeemed in Q4 FY15, as well as the related unamortized interest rate hedge loss ($2.0M), which was recorded in interest expense.
(4) Represents the incremental benefit related to additional domestic manufacturing deductions to be claimed in our U.S. consolidated tax returns for FY10 through FY14 and through Q3 FY15.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160121006349/en/
Starbucks Contact, Investor Relations:Durga Doraisamy, 206-318-7118investorrelations@starbucks.comorStarbucks Contact, Media:Alisha Damodaran, 206-318-7100press@starbucks.com
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