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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 | |
---|---|---|---|---|---|---|---|---|---|---|
-1.51 | -2.02% | 73.42 | 73.42 | 73.45 | 75.51 | 72.985 | 75.27 | 22,153,875 | 01:00:00 |
Q4 Consolidated Net Revenues Up 31% to a Record $8.1 Billion Q4 Comparable Store Sales Up 17% Globally; U.S. Up 22% with 11% Two-Year Growth Q4 GAAP EPS $1.49; Non-GAAP EPS of $1.00 Driven by Strong U.S. Performance Active Starbucks® Rewards Membership in the U.S. Approaches 25 million, Up 28% Year-Over-Year Company Commits to $20 Billion of Share Repurchases and Dividends Over Next Three Years Company Announces Historic Investments in its Partners (Employees), Bringing Average U.S. Retail Hourly Wage to Nearly $17/hr. by Summer 2022
Starbucks Corporation (NASDAQ: SBUX) today reported financial results for its 14-week fiscal fourth quarter ended October 3, 2021. GAAP results in fiscal 2021 and fiscal 2020 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.
“Our strong finish to fiscal 2021, including record performance in the fourth quarter, demonstrates the resilience of Starbucks and reinforces the value of the bold strategic moves we have taken over the past two years. Through it all, we have thoughtfully navigated a strong recovery with an eye towards our future, all guided by our Mission and Values,” said Kevin Johnson, president and ceo.
“Today we announce we will be doubling-down on our investments in our partners, the heartbeat of our company. We know that when we exceed the expectations of our people, they in turn exceed the expectations of our customers - which creates value for all of our stakeholders - our partners, our customers, our communities and our shareholders. We anticipate that our strong business momentum, increased operating efficiency and continued global store expansion will fund these unprecedented investments while delivering yet another year of significant growth,” concluded Johnson.
Fiscal 2021 Re-segmentation
In the fourth quarter of fiscal 2021, certain changes were made to the company's management team, and the operating segment reporting structure was realigned as a result. The company realigned the fully licensed Latin America and Caribbean markets from the Americas operating segment to the International operating segment. The Americas operating segment has been renamed the North America operating segment, comprised of company-operated and licensed stores in the U.S. and Canada. Fiscal 2020 segment information has been restated to conform with current period presentation.
There was no impact to consolidated net revenues, consolidated operating income or net earnings per share as a result of these changes.
Q4 Fiscal 2021 Highlights
Full Year Fiscal 2021 Highlights
(1)
For additional reconciliations of the extra week in fiscal 2021, please see the Supplemental Financial Data section of our Investor Relations website at http://investor.starbucks.com.
Q4 North America Segment Results
Quarter Ended
Oct 3, 2021
Sep 27, 2020
($ in millions)
(14 Weeks Ended)
(13 Weeks Ended)
Change (%)
Change in Comparable Store Sales (1)
22%
(9)%
Change in Transactions
18%
(25)%
Change in Ticket
3%
21%
Store Count
16,826
16,940
(1)%
Revenues
$5,763.0
$4,213.9
37%
Operating Income
$1,255.8
$506.0
148%
Operating Margin
21.8%
12.0%
980 bps
(1)
Includes only Starbucks® company-operated stores open 13 months or longer. For fiscal 2021, comparable store sales percentages were calculated excluding the extra week in the fourth quarter of fiscal 2021. 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 due to the COVID-19 pandemic remain in comparable store sales while stores identified for permanent closure have been removed.
Net revenues for the North America segment grew 37% (27% on a 13-week basis) over Q4 FY20 to $5.8 billion in Q4 FY21, primarily driven by a 22% increase in company-operated comparable store sales, driven primarily due to lapping the unfavorable impact of business disruption in the prior year due to the COVID-19 pandemic and incremental revenue from the extra week in Q4 fiscal 2021.
Operating income increased to $1.3 billion in Q4 FY21, up from $506.0 million in Q4 FY20. Operating margin of 21.8% expanded from 12.0% in the prior year, primarily driven by sales leverage from business recovery and the lapping of higher COVID-19 related costs in the prior year, in addition to the impact of pricing, partially offset by increased supply chain costs due to inflationary pressures. Operating margin also benefited from lower restructuring expenses primarily associated with the North America Trade Area Transformation.
Q4 International Segment Results
Quarter Ended
Oct 3, 2021
Sep 27, 2020
($ in millions)
(14 Weeks Ended)
(13 Weeks Ended)
Change (%)
Change in Comparable Store Sales (1)
3%
(10)%
Change in Transactions
6%
(15)%
Change in Ticket
(2)%
7%
Store Count
17,007
15,720
8%
Revenues
$1,914.6
$1,511.3
27%
Operating Income
$377.4
$181.7
108%
Operating Margin
19.7%
12.0%
770 bps
(1)
Includes only Starbucks® company-operated stores open 13 months or longer. For fiscal 2021, comparable store sales percentages were calculated excluding the extra week in the fourth quarter of fiscal 2021. 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 due to the COVID-19 pandemic remain in comparable store sales while stores identified for permanent closure have been removed. For the fourth quarter of fiscal 2021, the International segment's comparable store sales included a 3% adverse impact from lapping the prior-year value-added tax benefit in China.
Net revenues for the International segment grew 27% (18% on a 13-week basis) over Q4 FY20 to $1.9 billion in Q4 FY21, driven by 1,287 net new store openings, or 8% store growth, over the past 12 months, incremental revenue from the extra week in Q4 fiscal 2021, higher product sales to and royalty revenues from our licensees, a 3% favorable impact from foreign currency translation and a 3% increase in comparable store sales, partially driven by the lapping of prior year COVID impacts.
Operating income increased to $377.4 million in Q4 FY21 compared to $181.7 million in Q4 FY20. Operating margin of 19.7% increased from 12.0% in the prior year, primarily driven by sales leverage due to lapping the severe impact of the COVID-19 pandemic, favorability from temporary government subsidies, lapping store asset impairments in the prior year and labor efficiencies across company-operated markets.
Q4 Channel Development Segment Results
Quarter Ended
Oct 3, 2021
Sep 27, 2020
($ in millions)
(14 Weeks Ended)
(13 Weeks Ended)
Change (%)
Revenues
$438.3
$464.0
(6)%
Operating Income
$219.8
$197.9
11%
Operating Margin
50.1%
42.7%
740 bps
Net revenues for the Channel Development segment of $438.3 million in Q4 FY21 were 6% lower (10% lower on a 13-week basis) relative to Q4 FY20. The decline was primarily driven by a 20% unfavorable impact of Global Coffee Alliance transition-related activities, including a structural change in our single-serve business, partially offset by incremental revenue from the extra week in Q4 fiscal 2021 and growth in the Global Coffee Alliance and the International ready-to-drink businesses.
Operating income increased to $219.8 million in Q4 FY21, up from $197.9 million in Q4 FY20. Operating margin of 50.1% expanded from 42.7% in the prior year, primarily due to Global Coffee Alliance transition-related activities, including the structural change in our single-serve business partially offset by the impact of the extra week in Q4 fiscal 2021.
Fiscal 2022 Financial Targets
The company will introduce fiscal year 2022 financial targets during its Q4 FY21 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 Updates
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 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, November 26, 2021.
About Starbucks
Since 1971, Starbucks Coffee Company has been committed to ethically sourcing and roasting high-quality arabica coffee. Today, with more than 33,800 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 the applicable securities laws and regulations. Generally, these statements can be identified by the use of words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “remain,” “should,” “will,” “would,” and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These statements include statements relating to: our increased labor investments; our business outlook, projections and guidance; operations and financial results; our sustainability goals and initiatives; the recovery of our business; and our ability to drive long-term growth. These forward-looking statements do not represent historical data, are based on currently available operating, financial and competitive information and are subject to a number of significant risks and uncertainties. Actual future results and trends may differ materially depending on a variety of factors, including, but not limited to: the actual impact of our increased labor investments on our operations and financial results; further spread of COVID-19 and its variants; regulatory measures or voluntary actions that may be put in place to limit the spread of COVID-19, including vaccine mandates and restrictions on business operations or social distancing requirements and the duration and efficacy of such restrictions and the world-wide distribution and acceptance of vaccines; the potential for a resurgence of COVID-19 infections in a given geographic region after it has hit its “peak”; fluctuations in U.S. and international economies and currencies; our ability to preserve, grow and leverage our brands; the ability of our business partners and third-party providers to fulfill their responsibilities and commitments; potential negative effects of incidents involving food or beverage-borne illnesses, tampering, adulteration, 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 successful expansion of our Global Coffee Alliance with Nestlé; our ability to obtain financing on acceptable terms; the acceptance of the company’s products by our customers, evolving consumer preferences and tastes and the availability of consumer financing; changes in the availability and cost of labor; significant increased logistic costs, including but not limited to inflationary pressures; the impact of competition; inherent risks of operating a global business; the prices and availability of coffee, dairy and other raw materials; the effect of legal proceedings; and the effects of changes in tax laws and related guidance and regulations that may be implemented and other risks detailed in the company filings with the Securities and Exchange Commission, including the “Risk Factors” sections of Starbucks Annual Report on Form 10-K for the fiscal year ended September 27, 2020 and Quarterly Report on Form 10-Q for the fiscal quarter ended June 27, 2021. The company assumes no obligation to update any of these forward-looking statements.
Two-year Comparable Store Sales
The two-year comparable store sales metric discussed in today's investor conference call is calculated as ((1 + % change in comparable store sales in FY20) * (1 + % change in comparable store sales in FY21)) - 1. Refer to footnote 1 in the Segment Results and Supplemental Information sections in this press release for definitions of change in comparable store sales.
Key Metrics
The company's financial results and long-term growth model will continue to be driven by new store openings, comparable store sales and operating margin management. These key operating metrics are important indicators for the growth of the business and the effectiveness of the company's marketing and operational strategies.
STARBUCKS CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited, in millions, except per share data)
Quarter Ended
Quarter Ended
Oct 3, 2021
Sep 27, 2020
% Change
Oct 3, 2021
Sep 27, 2020
(14 Weeks Ended)
(13 Weeks Ended)
As a % of total net revenues
Net revenues:
Company-operated stores
$
6,864.3
$
5,173.6
32.7
%
84.3
%
83.4
%
Licensed stores
794.5
544.6
45.9
9.8
8.8
Other
487.9
484.9
0.6
6.0
7.8
Total net revenues
8,146.7
6,203.1
31.3
100.0
100.0
Product and distribution costs
2,491.1
1,976.8
26.0
30.6
31.9
Store operating expenses
3,273.4
2,683.4
22.0
40.2
43.3
Other operating expenses
108.6
99.9
8.7
1.3
1.6
Depreciation and amortization expenses
354.7
362.9
(2.3
)
4.4
5.9
General and administrative expenses
501.2
439.0
14.2
6.2
7.1
Restructuring and impairments
55.5
195.0
(71.5
)
0.7
3.1
Total operating expenses
6,784.5
5,757.0
17.8
83.3
92.8
Income from equity investees
120.0
112.2
7.0
1.5
1.8
Operating income/(loss)
1,482.2
558.3
165.5
18.2
9.0
Net gain resulting from divestiture of certain operations
864.5
—
nm
10.6
—
Interest income and other, net
21.5
9.1
136.3
0.3
0.1
Interest expense
(120.6
)
(125.0
)
(3.5
)
(1.5
)
(2.0
)
Earnings before income taxes
2,247.6
442.4
408.0
27.6
7.1
Income tax expense
483.0
49.7
871.8
5.9
0.8
Net earnings including noncontrolling interests
1,764.6
392.7
349.4
21.7
6.3
Net earnings attributable to noncontrolling interests
0.2
0.1
100.0
—
—
Net earnings attributable to Starbucks
$
1,764.4
$
392.6
349.4
21.7
%
6.3
%
Net earnings per common share - diluted
$
1.49
$
0.33
351.5
%
Weighted avg. shares outstanding - diluted
1,187.9
1,179.0
Cash dividends declared per share
$
0.49
$
0.45
Supplemental Ratios:
Store operating expenses as a % of company-operated store revenues
47.7
%
51.9
%
Effective tax rate including noncontrolling interests
21.5
%
11.2
%
Year Ended
Year Ended
Oct 3, 2021
Sep 27, 2020
% Change
Oct 3, 2021
Sep 27, 2020
(53 Weeks Ended)
(52 Weeks Ended)
As a % of total net revenues
Net revenues:
Company-operated stores
$
24,607.0
$
19,164.6
28.4
%
84.7
%
81.5
%
Licensed stores
2,683.6
2,327.1
15.3
9.2
9.9
Other
1,770.0
2,026.3
(12.6
)
6.1
8.6
Total net revenues
29,060.6
23,518.0
23.6
100.0
100.0
Product and distribution costs
8,738.7
7,694.9
13.6
30.1
32.7
Store operating expenses
11,930.9
10,764.0
10.8
41.1
45.8
Other operating expenses
359.5
430.3
(16.5
)
1.2
1.8
Depreciation and amortization expenses
1,441.7
1,431.3
0.7
5.0
6.1
General and administrative expenses
1,932.6
1,679.6
15.1
6.7
7.1
Restructuring and impairments
170.4
278.7
(38.9
)
0.6
1.2
Total operating expenses
24,573.8
22,278.8
10.3
84.6
94.7
Income from equity investees
385.3
322.5
19.5
1.3
1.4
Operating income
4,872.1
1,561.7
212.0
16.8
6.6
Net gain resulting from divestiture of certain operations
864.5
—
nm
3.0
—
Interest income and other, net
90.1
39.7
127.0
0.3
0.2
Interest expense
(469.8
)
(437.0
)
7.5
(1.6
)
(1.9
)
Earnings before income taxes
5,356.9
1,164.4
360.1
18.4
5.0
Income tax expense
1,156.6
239.7
382.5
4.0
1.0
Net earnings including noncontrolling interests
4,200.3
924.7
354.2
14.5
3.9
Net earnings/(loss) attributable to noncontrolling interests
1.0
(3.6
)
nm
—
—
Net earnings attributable to Starbucks
$
4,199.3
$
928.3
352.4
14.5
%
3.9
%
Net earnings per common share - diluted
$
3.54
$
0.79
348.1
%
Weighted avg. shares outstanding - diluted
1,185.5
1,181.8
Cash dividends declared per share
$
2.29
$
1.23
Supplemental Ratios:
Store operating expenses as a % of company-operated store revenues
48.5
%
56.2
%
Effective tax rate including noncontrolling interests
21.6
%
20.6
%
Segment Results (in millions)
North America
Oct 3, 2021
Sep 27, 2020
% Change
Oct 3, 2021
Sep 27, 2020
Quarter Ended
(14 Weeks Ended)
(13 Weeks Ended)
As a % of North America total net revenues
Net revenues:
Company-operated stores
$
5,254.3
$
3,875.3
35.6
%
91.2
%
92.0
%
Licensed stores
506.5
336.9
50.3
8.8
8.0
Other
2.2
1.7
29.4
—
—
Total net revenues
5,763.0
4,213.9
36.8
100.0
100.0
Product and distribution costs
1,580.3
1,158.3
36.4
27.4
27.5
Store operating expenses
2,570.8
2,060.7
24.8
44.6
48.9
Other operating expenses
47.3
38.0
24.5
0.8
0.9
Depreciation and amortization expenses
189.9
190.1
(0.1
)
3.3
4.5
General and administrative expenses
78.4
65.2
20.2
1.4
1.5
Restructuring and impairments
40.5
195.6
(79.3
)
0.7
4.6
Total operating expenses
4,507.2
3,707.9
21.6
78.2
88.0
Operating income
$
1,255.8
$
506.0
148.2
%
21.8
%
12.0
%
Supplemental Ratio:
Store operating expenses as a % of company-operated store revenues
48.9
%
53.2
%
Oct 3, 2021
Sep 27, 2020
% Change
Oct 3, 2021
Sep 27, 2020
Year Ended
(53 Weeks Ended)
(52 Weeks Ended)
As a % of North America total net revenues
Net revenues:
Company-operated stores
$
18,737.3
$
14,778.8
26.8
%
91.6
%
90.7
%
Licensed stores
1,702.2
1,509.9
12.7
8.3
9.3
Other
8.4
7.5
12.0
—
—
Total net revenues
20,447.9
16,296.2
25.5
100.0
100.0
Product and distribution costs
5,453.8
4,564.4
19.5
26.7
28.0
Store operating expenses
9,359.5
8,488.0
10.3
45.8
52.1
Other operating expenses
166.0
154.6
7.4
0.8
0.9
Depreciation and amortization expenses
753.9
762.0
(1.1
)
3.7
4.7
General and administrative expenses
300.0
268.0
11.9
1.5
1.6
Restructuring and impairments
155.4
257.5
(39.7
)
0.8
1.6
Total operating expenses
16,188.6
14,494.5
11.7
79.2
88.9
Operating income
$
4,259.3
$
1,801.7
136.4
%
20.8
%
11.1
%
Supplemental Ratio:
Store operating expenses as a % of company-operated store revenues
50.0
%
57.4
%
International
Oct 3, 2021
Sep 27, 2020
% Change
Oct 3, 2021
Sep 27, 2020
Quarter Ended
(14 Weeks Ended)
(13 Weeks Ended)
As a % of International total net revenues
Net revenues:
Company-operated stores
$
1,610.0
$
1,298.3
24.0
%
84.1
%
85.9
%
Licensed stores
288.0
207.7
38.7
15.0
13.7
Other
16.6
5.3
213.2
0.9
0.4
Total net revenues
1,914.6
1,511.3
26.7
100.0
100.0
Product and distribution costs
605.1
479.2
26.3
31.6
31.7
Store operating expenses
702.6
622.7
12.8
36.7
41.2
Other operating expenses
39.8
39.9
(0.3
)
2.1
2.6
Depreciation and amortization expenses
131.6
133.1
(1.1
)
6.9
8.8
General and administrative expenses
98.4
84.5
16.4
5.1
5.6
Restructuring and impairments
—
(0.6
)
nm
—
—
Total operating expenses
1,577.5
1,358.8
16.1
82.4
89.9
Income from equity investees
40.3
29.2
38.0
2.1
1.9
Operating income
$
377.4
$
181.7
107.7
%
19.7
%
12.0
%
Supplemental Ratio:
Store operating expenses as a % of company-operated store revenues
43.6
%
48.0
%
Oct 3, 2021
Sep 27, 2020
% Change
Oct 3, 2021
Sep 27, 2020
Year Ended
(53 Weeks Ended)
(52 Weeks Ended)
As a % of International total net revenues
Net revenues:
Company-operated stores
$
5,869.7
$
4,385.8
33.8
%
84.8
%
83.8
%
Licensed stores
981.4
817.2
20.1
14.2
15.6
Other
70.5
27.6
155.4
1.0
0.5
Total net revenues
6,921.6
5,230.6
32.3
100.0
100.0
Product and distribution costs
2,187.3
1,729.1
26.5
31.6
33.1
Store operating expenses
2,571.4
2,276.0
13.0
37.2
43.5
Other operating expenses
147.3
153.6
(4.1
)
2.1
2.9
Depreciation and amortization expenses
544.7
518.4
5.1
7.9
9.9
General and administrative expenses
360.5
286.4
25.9
5.2
5.5
Restructuring and impairments
—
(1.2
)
nm
—
—
Total operating expenses
5,811.2
4,962.3
17.1
84.0
94.9
Income from equity investees
135.3
102.3
32.3
2.0
2.0
Operating income
$
1,245.7
$
370.6
236.1
%
18.0
%
7.1
%
Supplemental Ratio:
Store operating expenses as a % of company-operated store revenues
43.8
%
51.9
%
Channel Development
Oct 3, 2021
Sep 27, 2020
% Change
Oct 3, 2021
Sep 27, 2020
Quarter Ended
(14 Weeks Ended)
(13 Weeks Ended)
As a % of Channel Development total net revenues
Net revenues
$
438.3
$
464.0
(5.5
)%
Product and distribution costs
277.5
327.8
(15.3
)
63.3
%
70.6
%
Other operating expenses
17.0
18.5
(8.1
)
3.9
4.0
Depreciation and amortization expenses
0.3
0.3
—
0.1
0.1
General and administrative expenses
3.4
2.5
36.0
0.8
0.5
Total operating expenses
298.2
349.1
(14.6
)
68.0
75.2
Income from equity investees
79.7
83.0
(4.0
)
18.2
17.9
Operating income
$
219.8
$
197.9
11.1
%
50.1
%
42.7
%
Oct 3, 2021
Sep 27, 2020
% Change
Oct 3, 2021
Sep 27, 2020
Year Ended
(53 Weeks Ended)
(52 Weeks Ended)
As a % of Channel Development total net revenues
Net revenues
$
1,593.6
$
1,925.0
(17.2
)%
Product and distribution costs
1,011.2
1,338.1
(24.4
)
63.5
%
69.5
%
Other operating expenses
31.3
108.2
(71.1
)
2.0
5.6
Depreciation and amortization expenses
1.2
1.2
—
0.1
0.1
General and administrative expenses
10.8
10.5
2.9
0.7
0.5
Total operating expenses
1,054.5
1,458.0
(27.7
)
66.2
75.7
Income from equity investees
250.0
220.2
13.5
15.7
11.4
Operating income
$
789.1
$
687.2
14.8
%
49.5
%
35.7
%
Corporate and Other
Oct 3, 2021
Sep 27, 2020
% Change
Quarter Ended
(14 Weeks Ended)
(13 Weeks Ended)
Net revenues
$
30.8
$
13.9
121.6
%
Product and distribution costs
28.2
11.5
145.2
Other operating expenses
4.5
3.5
28.6
Depreciation and amortization expenses
32.9
39.4
(16.5
)
General and administrative expenses
321.0
286.8
11.9
Restructuring and impairments
15.0
—
nm
Total operating expenses
401.6
341.2
17.7
Operating loss
$
(370.8
)
$
(327.3
)
13.3
%
Oct 3, 2021
Sep 27, 2020
% Change
Year Ended
(53 Weeks Ended)
(52 Weeks Ended)
Net revenues
$
97.5
$
66.2
47.3
%
Product and distribution costs
86.4
63.3
36.5
Other operating expenses
14.9
13.9
7.2
Depreciation and amortization expenses
141.9
149.7
(5.2
)
General and administrative expenses
1,261.3
1,114.7
13.2
Restructuring and impairments
15.0
22.4
(33.0
)
Total operating expenses
1,519.5
1,364.0
11.4
Operating loss
$
(1,422.0
)
$
(1,297.8
)
9.6
%
Corporate and Other primarily consists of our unallocated corporate operating expenses and Evolution Fresh.
STARBUCKS CORPORATION
CONSOLIDATED BALANCE SHEETS
(unaudited, in millions, except per share data)
Oct 3, 2021
Sep 27, 2020
ASSETS
Current assets:
Cash and cash equivalents
$
6,455.7
$
4,350.9
Short-term investments
162.2
281.2
Accounts receivable, net
940.0
883.4
Inventories
1,603.9
1,551.4
Prepaid expenses and other current assets
594.6
739.5
Total current assets
9,756.4
7,806.4
Long-term investments
281.7
206.1
Equity investments
268.5
478.7
Property, plant and equipment, net
6,369.5
6,241.4
Operating lease, right-of-use asset
8,236.0
8,134.1
Deferred income taxes, net
1,874.8
1,789.9
Other long-term assets
578.5
568.6
Other intangible assets
349.9
552.1
Goodwill
3,677.3
3,597.2
TOTAL ASSETS
$
31,392.6
$
29,374.5
LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIT)
Current liabilities:
Accounts payable
$
1,211.6
$
997.9
Accrued liabilities
1,973.2
1,160.7
Accrued payroll and benefits
772.3
696.0
Income taxes payable
348.0
98.2
Current portion of operating lease liability
1,251.3
1,248.8
Stored value card liability and current portion of deferred revenue
1,596.1
1,456.5
Short-term debt
—
438.8
Current portion of long-term debt
998.9
1,249.9
Total current liabilities
8,151.4
7,346.8
Long-term debt
13,616.9
14,659.6
Operating lease liability
7,738.0
7,661.7
Deferred revenue
6,463.0
6,598.5
Other long-term liabilities
737.8
907.3
Total liabilities
36,707.1
37,173.9
Shareholders' deficit:
Common stock ($0.001 par value) — authorized, 2,400.0 shares; issued and outstanding, 1,180.0 and 1,173.3 shares, respectively
1.2
1.2
Additional paid-in capital
846.1
373.9
Retained deficit
(6,315.7
)
(7,815.6
)
Accumulated other comprehensive income/(loss)
147.2
(364.6
)
Total shareholders’ deficit
(5,321.2
)
(7,805.1
)
Noncontrolling interests
6.7
5.7
Total deficit
(5,314.5
)
(7,799.4
)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIT)
$
31,392.6
$
29,374.5
STARBUCKS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited and in millions)
Year Ended
Oct 3, 2021
Sep 27, 2020
Sep 30, 2019
OPERATING ACTIVITIES:
Net earnings including noncontrolling interests
$
4,200.3
$
924.7
$
3,594.6
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization
1,524.1
1,503.2
1,449.3
Deferred income taxes, net
(146.2
)
(25.8
)
(1,495.4
)
Income earned from equity method investees
(347.3
)
(280.7
)
(250.6
)
Distributions received from equity method investees
336.0
227.7
216.8
Net gain resulting from divestiture of certain operations
(864.5
)
—
(622.8
)
Stock-based compensation
319.1
248.6
308.0
Goodwill impairments
—
—
10.5
Non-cash lease costs
1,248.6
1,197.6
—
Loss on retirement and impairment of assets
226.2
454.4
142.6
Other
(6.0
)
24.5
45.3
Cash provided by/(used in) changes in operating assets and liabilities:
Accounts receivable
(43.0
)
(2.7
)
(197.7
)
Inventories
(49.8
)
(10.9
)
(173.0
)
Prepaid expenses and other current assets
251.1
(317.5
)
922.0
Income taxes payable
286.1
(1,214.6
)
1,237.1
Accounts payable
189.9
(210.8
)
31.9
Deferred revenue
(6.1
)
31.0
(30.5
)
Operating lease liability
(1,488.1
)
(1,231.4
)
—
Other operating assets and liabilities
358.7
280.5
(141.1
)
Net cash provided by operating activities
5,989.1
1,597.8
5,047.0
INVESTING ACTIVITIES:
Purchases of investments
(432.0
)
(443.9
)
(190.4
)
Sales of investments
143.2
186.7
298.3
Maturities and calls of investments
345.5
73.7
59.8
Additions to property, plant and equipment
(1,470.0
)
(1,483.6
)
(1,806.6
)
Net proceeds from the divestiture of certain operations
1,175.0
—
684.3
Other
(81.2
)
(44.4
)
(56.2
)
Net cash used in investing activities
(319.5
)
(1,711.5
)
(1,010.8
)
FINANCING ACTIVITIES:
Repayments of commercial paper
(296.5
)
—
—
Net proceeds from issuance of short-term debt
215.1
1,406.6
—
Repayments of short-term debt
(349.8
)
(967.7
)
—
Proceeds from issuance of long-term debt
—
4,727.6
1,996.0
Repayments of long-term debt
(1,250.0
)
—
(350.0
)
Proceeds from issuance of common stock
246.2
298.8
409.8
Cash dividends paid
(2,119.0
)
(1,923.5
)
(1,761.3
)
Repurchase of common stock
—
(1,698.9
)
(10,222.3
)
Minimum tax withholdings on share-based awards
(97.0
)
(91.9
)
(111.6
)
Other
—
(37.7
)
(17.5
)
Net cash provided by/(used in) financing activities
(3,651.0
)
1,713.3
(10,056.9
)
Effect of exchange rate changes on cash and cash equivalents
86.2
64.7
(49.0
)
Net increase/(decrease) in cash and cash equivalents
2,104.8
1,664.3
(6,069.7
)
CASH AND CASH EQUIVALENTS:
Beginning of period
4,350.9
2,686.6
8,756.3
End of period
$
6,455.7
$
4,350.9
$
2,686.6
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest, net of capitalized interest
$
501.1
$
396.9
$
299.5
Income taxes
$
756.3
$
1,699.1
$
470.1
Supplemental Information
The following supplemental information is provided for historical and comparative purposes.
U.S. Supplemental Data
Quarter Ended
Oct 3, 2021
Sep 27, 2020
($ in millions)
(14 Weeks Ended)
(13 Weeks Ended)
Change (%)
Revenues
$5,333.4
$3,892.9
37%
Change in Comparable Store Sales (1)
22%
(9)%
Change in Transactions
19%
(25)%
Change in Ticket
3%
21%
Store Count
15,450
15,337
1%
(1)
Includes only Starbucks® company-operated stores open 13 months or longer. For fiscal 2021, comparable store sales percentages were calculated excluding the extra week in the fourth quarter of fiscal 2021. Comparable store sales exclude Siren Retail stores. Stores that are temporarily closed or operating at reduced hours due to the COVID-19 pandemic remain in comparable store sales while stores identified for permanent closure have been removed.
China Supplemental Data
Quarter Ended
Oct 3, 2021
Sep 27, 2020
($ in millions)
(14 Weeks Ended)
(13 Weeks Ended)
Change (%)
Revenues
$964.0
$814.5
18%
Change in Comparable Store Sales (1)
(7)%
(3)%
Change in Transactions
(2)%
(7)%
Change in Ticket
(5)%
5%
Store Count
5,360
4,706
14%
(1)
Includes only Starbucks® company-operated stores open 13 months or longer. For fiscal 2021, comparable store sales percentages were calculated excluding the extra week in the fourth quarter of fiscal 2021. Comparable store sales exclude the effects of fluctuations in foreign currency exchange rates, stores identified for permanent closure and Siren Retail stores. Stores that are temporarily closed or operating at reduced hours due to the COVID-19 pandemic remain in comparable store sales while stores identified for permanent closure have been removed. Comparable store sales for the fourth quarter of fiscal 2021 included a 4% adverse impact from lapping the prior-year value-added tax benefit.
Store Data
Net stores opened/(closed) and transferred during the period
Quarter Ended
Year Ended
Stores open as of
Oct 3, 2021
Sep 27, 2020
Oct 3, 2021
Sep 27, 2020
Oct 3, 2021
Sep 27, 2020
North America:
Company-operated stores
1
92
(248
)
135
9,861
10,109
Licensed stores
73
32
134
149
6,965
6,831
Total North America
74
124
(114
)
284
16,826
16,940
International:
Company-operated stores
259
274
744
668
7,272
6,528
Licensed stores
205
82
543
452
9,735
9,192
Total International
464
356
1,287
1,120
17,007
15,720
Total Company
538
480
1,173
1,404
33,833
32,660
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 general and administrative expenses (G&A), non-GAAP operating income, non-GAAP operating income growth, 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, non-GAAP operating margin, non-GAAP effective tax rate and non-GAAP earnings per share are general and administrative expenses, operating income, operating income growth, operating margin, effective tax rate and diluted net earnings per share, respectively.
Non-GAAP Exclusion
Rationale
Sale of certain joint venture operations
Management excludes the gain related to the sale of our South Korea joint venture operations as this incremental gain was specific to the sale activity and for reasons discussed above.
Restructuring and impairment costs
Management excludes restructuring and impairment costs relating to the write-down of certain company-operated store and corporate assets. Management excludes these items for reasons discussed above. These expenses are anticipated to be completed within a finite period of time.
Integration costs
Management excludes integration costs and amortization of the acquired intangible assets for reasons discussed above. Additionally, the majority of these costs will be recognized over a finite period of time.
Nestlé transaction and integration-related costs
Management excludes the transaction and integration-related costs related to the Global Coffee Alliance with Nestlé (inclusive of incremental costs to grow and develop the alliance) for reasons discussed above.
Non-GAAP G&A, non-GAAP operating income, non-GAAP operating income growth, non-GAAP operating margin, non-GAAP effective tax rate and non-GAAP earnings per share 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.
Certain non-GAAP measures included in this report were not reconciled to the comparable GAAP financial measures because the GAAP measures are not accessible on a forward-looking basis. The company is unable to reconcile these forward-looking non-GAAP financial measures to the most directly comparable GAAP measures without unreasonable efforts because the company is currently unable to predict with a reasonable degree of certainty the type and extent of certain items that would be expected to impact GAAP measures for these periods but would not impact the non-GAAP measures. Such items may include acquisitions, divestitures, restructuring and other items. The unavailable information could have a significant impact on the company’s GAAP financial results.
STARBUCKS CORPORATION
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES
(unaudited, in millions except per share data)
Quarter Ended
Oct 3, 2021
Sep 27, 2020
Consolidated
(14 Weeks Ended)
(13 Weeks Ended)
Change
General and administrative expenses, as reported (GAAP)
$
501.2
$
439.0
14.2%
Restructuring and impairment costs (1)
—
(0.6
)
Integration costs (2)
(9.7
)
(5.6
)
Non-GAAP G&A
$
491.5
$
432.8
13.6%
Non-GAAP G&A as a % of total net revenues (4)
6.0
%
7.0
%
Operating income, as reported (GAAP)
$
1,482.2
$
558.3
165.5%
Restructuring and impairment costs (1)
55.5
195.5
Integration costs (2)
59.6
64.0
Nestlé transaction and integration-related costs (3)
0.1
—
Non-GAAP operating income
$
1,597.4
$
817.8
95.3%
Operating margin, as reported (GAAP)
18.2
%
9.0
%
920 bps
Restructuring and impairment costs (1)
0.7
3.2
Integration costs (2)
0.7
1.0
Nestlé transaction and integration-related costs (3)
—
—
Non-GAAP operating margin
19.6
%
13.2
%
640 bps
Diluted net earnings per share, as reported (GAAP)
$
1.49
$
0.33
351.5%
Restructuring and impairment costs (1)
0.05
0.18
Integration costs (2)
0.05
0.05
Gain resulting from divestiture of South Korea joint venture
(0.73
)
—
Income tax effect on Non-GAAP adjustments (5)
0.14
(0.05
)
Non-GAAP EPS
$
1.00
$
0.51
96.1%
(1)
Represents costs associated with our restructuring efforts, primarily lease exit costs and asset impairments.
(2)
Includes amortization expense of acquired intangible assets associated with the acquisition of East China and Starbucks Japan and the related post-acquisition integration costs, such as incremental information technology and compensation-related costs.
(3)
Represents costs associated with the Global Coffee Alliance with Nestlé.
(4)
Non-GAAP G&A as a percentage of total net revenues for the fourth quarter of fiscal 2021 was 6.0%. Non-GAAP G&A as a percentage of total net revenues for the fourth quarter of fiscal years 2020 and 2019 was 7.0% and 6.7%, respectively. Refer to the Starbucks Investor Relations website for additional information regarding historical non-GAAP information.
(5)
Adjustments were determined based on the nature of the underlying items and their relevant jurisdictional tax rates.
Q4 QTD FY21 NON-GAAP DISCLOSURE DETAILS
(in millions and before income taxes)
Q4 QTD FY21
North America
International
Channel Development
Corporate and Other
Consolidated
Statement of Earnings Line Item
Restructuring and Impairment Costs
Integration Costs
Nestlé Transaction and Integration-Related Costs
Integration Costs
Restructuring and Impairment Costs
Total Non-GAAP Adjustment
Net revenue
$
—
$
—
$
—
$
—
$
—
$
—
Production and distribution costs
—
Store operating expenses
5.1
5.1
Other operating expenses
0.1
0.1
Depreciation and amortization expenses
44.8
44.8
General and administrative expenses
9.5
0.2
9.7
Restructuring and impairments
40.5
15.0
55.5
Total impact to operating income
$
(40.5
)
$
(59.4
)
$
(0.1
)
$
(0.2
)
$
(15.0
)
$
(115.2
)
Non-Operating gain
Gain resulting from divestiture of South Korea joint venture
$
864.5
STARBUCKS CORPORATION
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES
(unaudited, in millions except per share data)
Year Ended
Oct 3, 2021
Sep 27, 2020
Consolidated
(53 Weeks Ended)
(52 Weeks Ended)
Change
General and administrative expenses, as reported (GAAP)
$
1,932.6
$
1,679.6
15.1%
Restructuring and impairment costs (1)
—
(1.9
)
International transaction and integration-related items (2)
(22.2
)
(13.8
)
Nestlé transaction and integration-related costs (3)
—
(0.5
)
Non-GAAP G&A
$
1,910.4
$
1,663.4
14.8%
Non-GAAP G&A as a % of total net revenues (4)
6.6
%
7.1
%
Operating income, as reported (GAAP)
$
4,872.1
$
1,561.7
212.0%
Restructuring and impairment costs (1)
170.4
280.6
International transaction and integration-related items (2)
242.2
243.5
Nestlé transaction and integration-related costs (3)
(22.7
)
47.4
Non-GAAP operating income
$
5,262.0
$
2,133.2
146.7%
Operating margin, as reported (GAAP)
16.8
%
6.6
%
1,020 bps
Restructuring and impairment costs (1)
0.6
1.2
International transaction and integration-related items (2)
0.8
1.1
Nestlé transaction and integration-related costs (3)
(0.1
)
0.2
Non-GAAP operating margin
18.1
%
9.1
%
900 bps
Diluted net earnings per share, as reported (GAAP)
$
3.54
$
0.79
348.1%
Restructuring and impairment costs (1)
0.14
0.23
International transaction and integration-related items (2)
0.21
0.21
Nestlé transaction and integration-related costs (3)
(0.02
)
0.04
Gain resulting from divestiture of South Korea joint venture
(0.73
)
—
Income tax effect on Non-GAAP adjustments (5)
0.10
(0.10
)
Non-GAAP EPS
$
3.24
$
1.17
176.9%
(1)
Represents costs associated with our restructuring efforts, primarily severance and asset impairments related to certain company-operated store closures and impairment of certain corporate assets.
(2)
Includes ongoing amortization expense of acquired intangible assets associated with the acquisition of East China and Starbucks Japan; and the related post-acquisition integration costs, such as incremental information technology and compensation-related costs.
(3)
Represents costs associated with the Global Coffee Alliance with Nestlé and a change in estimate relating to a transaction cost accrual.
(4)
Non-GAAP G&A as a percentage of total net revenues for fiscal years 2021, 2020 and 2019 was 6.6%, 7.1% and 6.5%, respectively. Refer to the Starbucks Investor Relations website for additional information regarding historical non-GAAP information.
(5)
Adjustments were determined based on the nature of the underlying items and their relevant jurisdictional tax rates.
YTD FY21 NON-GAAP DISCLOSURE DETAILS
(in millions and before income taxes)
Q4 YTD FY21
North America
International
Channel Development
Corporate and Other
Consolidated
Statement of Earnings Line Item
Restructuring and Impairment Costs
Integration Costs
Nestlé Transaction and Integration-Related Costs
Integration Costs
Restructuring and Impairment Costs
Total Non-GAAP Adjustment
Net revenue
$
—
$
—
$
—
$
—
$
—
$
—
Production and distribution costs
—
Store operating expenses
17.6
17.6
Other operating expenses
(22.7
)
(22.7
)
Depreciation and amortization expenses
202.4
202.4
General and administrative expenses
21.5
0.7
22.2
Restructuring and impairments
155.4
15.0
170.4
Total impact to operating income
$
(155.4
)
$
(241.5
)
$
22.7
$
(0.7
)
$
(15.0
)
$
(389.9
)
Non-Operating gain
Gain resulting from divestiture of South Korea joint venture
$
864.5
View source version on businesswire.com: https://www.businesswire.com/news/home/20211028006140/en/
Starbucks Contact, Investor Relations: Tiffany Willis 206-318-7118 investorrelations@starbucks.com
Starbucks Contact, Media: Maggie Jantzen 206-318-7100 press@starbucks.com
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