Comparable Store Sales Up 6% in China; Up 3%
Globally and in the U.S. and Americas
Consolidated Net Revenues Rise 7% to Record
$5.7 Billion; Operating Margin Expands to Q1 Record 19.8%
GAAP EPS Up 11% to $0.51; Non-GAAP EPS Up 13%
to $0.52
Card Loads in U.S./Canada Jump 15% to Record
$2.1 Billion; Active U.S. Rewards Membership Up 16% to 12.9
Million
Company Reaffirms Outlook for Fiscal 2017
Starbucks Corporation (NASDAQ: SBUX) today reported financial
results for its 13-week fiscal first quarter ended January 1,
2017. Fiscal 2017 and fiscal 2016 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 2017 Highlights:
- Global comparable store sales increased
3% comprised of a 3% increase in the Americas, a 5% increase in
CAP, and a 1% decrease in EMEA
- U.S. comparable store sales increased
3% comprised of a 5% increase in average ticket and a 2% decrease
in transactions. Adjusting for the estimated impact of order
consolidation related to the new Starbucks RewardsTM loyalty
program, average ticket grew 3% with transactions flat to prior
year.
- Record consolidated net revenues of
$5.7 billion grew 7% over prior year
- Record Q1 consolidated operating income
increased 7% to $1.1 billion
- Record Q1 consolidated operating margin
expanded 10 basis points to 19.8%
- GAAP EPS of $0.51 increased 11% over Q1
FY16
- Non-GAAP EPS of $0.52 increased 13%
over Q1 FY16 non-GAAP results
- Record $2.1 billion loaded on Starbucks
Cards in the U.S. and Canada in Q1, up 15% year-over-year;
Starbucks Card transactions reached 40% of U.S. company-operated
transactions
- Active membership in Starbucks Rewards
grew 16% year-over-year to 12.9 million members in the U.S.
- Mobile Order and Pay represented 7% of
U.S. company-operated transactions in the quarter, up from 3% in
the prior year; Mobile Payment reached 27% of U.S. company-operated
transactions
- The company opened 649 net new stores
in the quarter, bringing total stores to 25,734 in 75 countries
worldwide
“Starbucks is engaging more deeply - and more frequently – and
expanding its base of loyal customers faster and more consistently
today than ever before,” said Howard Schultz, chairman and ceo.
“The trust and confidence our customers have in the Starbucks brand
is fueling our flywheel and propelling our business forward in
markets and channels all around the world.”
“We are pleased with the record Q1 financial and operating
results we announced today, particularly given that the results
were delivered in the face of a challenging environment for
restaurant retailers overall,” said Scott Maw, cfo. “As always,
credit for our success belongs to the more than 300,000 Starbucks
partners around the world who proudly wear the green apron and who
deliver an elevated Starbucks Experience to our customers now over
90 million times, each week.”
First Quarter
Fiscal 2017 Summary
Quarter Ended Jan 1, 2017 Comparable Store
Sales(1) Sales Growth Change in
Transactions Change in Ticket Consolidated 3%
(1)% 4% Americas 3% (2)% 5% CAP 5% 2% 3% EMEA
(1)% (2)% 1%
(1) Includes only Starbucks company-operated stores open 13
months or longer. Comparable store sales exclude the effect of
fluctuations in foreign currency exchange rates.
Operating Results Quarter Ended
Change ($ in millions, except per share amounts)
Jan 1, 2017 Dec 27, 2015 Net New
Stores 649 528 121 Revenues $5,732.9 $5,373.5 7% Operating
Income $1,132.6 $1,058.0 7% Operating Margin 19.8% 19.7% 10 bps EPS
$0.51 $0.46 11%
Consolidated net revenues were $5.7 billion in Q1 FY17, an
increase of 7% over Q1 FY16. The increase was primarily driven by
incremental revenues from the opening of 2,163 net new stores over
the past 12 months and 3% growth in global comparable store
sales.
Consolidated operating income grew 7% to $1,132.6 million in Q1
FY17, up from $1,058.0 million in Q1 FY16. Consolidated operating
margin expanded 10 basis points to 19.8% primarily due to sales
leverage and lower commodity costs, mainly coffee. The increase was
partially offset by higher investments in our store partners
(employees), primarily in the Americas segment.
Q1 Americas
Segment Results
Quarter Ended
Change ($ in millions)
Jan 1, 2017
Dec 27, 2015 Net New Stores 251 171 80 Revenues
$3,991.4 $3,726.2 7% Operating Income $958.5 $934.6 3% Operating
Margin 24.0% 25.1% (110) bps
Net revenues for the Americas segment were $4.0 billion in Q1
FY17, an increase of 7% over Q1 FY16. The increase was driven by
incremental revenues from 884 net new store openings over the past
12 months and 3% growth in comparable store sales.
Operating income of $958.5 million in Q1 FY17 grew 3% versus
$934.6 million in Q1 FY16. Operating margin of 24.0% declined 110
basis points primarily due to higher investments in our store
partners (employees), partially offset by sales leverage.
Q1 China/Asia
Pacific Segment Results
Quarter Ended
Change ($ in millions)
Jan 1, 2017
Dec 27, 2015 Net New Stores 303 281 22 Revenues
$770.8 $653.6 18% Operating Income $163.4 $127.1 29% Operating
Margin 21.2% 19.4% 180 bps
Net revenues for the China/Asia Pacific segment grew 18% over Q1
FY16 to $770.8 million in Q1 FY17. The increase was primarily
driven by incremental revenues from 1,003 net new store openings
over the past 12 months, 5% growth in comparable store sales, and
favorable foreign currency translation.
Q1 FY17 operating income of $163.4 million grew 29% over Q1 FY16
operating income of $127.1 million. Operating margin expanded 180
basis points to 21.2% primarily due to changes in certain business
tax structures in China and higher income from our joint venture
operations, partially offset by the impact of foreign currency
translation.
Q1 EMEA Segment
Results
Quarter Ended
Change ($ in millions)
Jan 1, 2017
Dec 27, 2015 Net New Stores 95 79 16 Revenues $262.4
$313.0 (16)% Operating Income $44.1 $48.1 (8)% Operating Margin
16.8% 15.4% 140 bps
Net revenues for the EMEA segment were $262.4 million in Q1
FY17, a 16% decrease versus Q1 FY16. The decrease was primarily
driven by the shift to more licensed stores in the region,
including the absence of revenue related to the sale of our Germany
retail operations in Q3 FY16, as well as unfavorable foreign
currency translation. Partially offsetting the decrease were
incremental revenues from the opening of 489 net new licensed
stores over the past 12 months.
Operating income decreased 8% to $44.1 million in Q1 FY17, down
from $48.1 million in Q1 FY16. Operating margin expanded 140 basis
points to 16.8% primarily due to sales leverage driven by the shift
in the portfolio towards more licensed stores. Partially offsetting
the margin expansion was unfavorable foreign currency exchange and
sales deleverage in certain company-operated stores.
Q1 Channel
Development Segment Results
Quarter Ended
Change ($ in millions)
Jan 1, 2017
Dec 27, 2015 Revenues $553.7 $512.1 8% Operating
Income $242.9 $193.3 26% Operating Margin 43.9% 37.7%
620 bps
Net revenues for the Channel Development segment grew 8% over Q1
FY16 to $553.7 million in Q1 FY17, primarily driven by increased
sales of premium single-serve and packaged coffee products.
Increased international and foodservice sales also contributed.
Operating income of $242.9 million in Q1 FY17 increased 26%
compared to Q1 FY16. Operating margin expanded 620 basis points to
43.9%, primarily driven by lower coffee costs, higher income from
the North American Coffee Partnership, and leverage on cost of
sales and other operating expenses.
Q1 All Other
Segments Results
Quarter Ended
Change ($ in millions)
Jan 1, 2017
Dec 27, 2015 Net New Stores — (3) 3 Revenues $154.6
$168.6 (8)% Operating Income $9.6 $5.9 63%
Fiscal 2017 Targets
The company reiterates the following full year FY17 targets,
except where noted. Year over year growth is based on prior year
52-week non-GAAP results. Please refer to the reconciliation of
GAAP measures to non-GAAP measures at the end of this release.
- Continue to expect approximately 2,100
net new stores globally
- Continue to expect mid-single digit
comparable store sales growth globally
- Consolidated revenue growth now
expected to be in the range of 8% to 10%
- Continue to expect GAAP EPS in the
range of $2.09 to $2.11 and non-GAAP EPS in the range of $2.12 to
$2.14
The company will continue its practice of providing detail
regarding its business outlook during its regularly scheduled
quarterly earnings conference calls, including select quarterly and
segment information. The company's earnings press release will
contain select full year consolidated targets only, as outlined
above.
Company Updates
- In December, Starbucks announced
that Kevin Johnson, president and chief operating officer and
a 7-year member of the Starbucks Board of Directors, will expand
his responsibilities and assume the role of president and chief
executive officer, effective April 3, 2017. Simultaneously, Howard
Schultz, chairman and ceo, will become executive chairman and will
continue to serve as chairman of Starbucks Board of Directors.
- The company announced the nominations
of Rosalind Brewer, President and Chief Executive Officer of Sam's
Club; Jørgen Vig Knudstorp, Executive Chairman of the LEGO Brand
Group; and Satya Nadella, Chief Executive Officer of Microsoft
Corporation, for election to the Starbucks Board of Directors at
the 2017 Annual Meeting of Shareholders. Additionally, Starbucks
board member James G. Shennan, Jr. will retire following 27 years
of service effective immediately prior to the Annual Meeting
pursuant to the Company’s Corporate Governance Principles and
Practices’ mandatory retirement age requirements.
- The company hosted its biennial
Investor Day in NYC on December 7, 2016 where company leaders
shared a number of initiatives in support of its 5-year strategic
plan. Highlights included:
- The addition of approximately 12,000
net new stores globally by fiscal 2021, bringing total stores to an
estimated 37,000
- Roasteries and Starbucks Reserve stores
to elevate the Starbucks brand and customer experience
- Digital innovation to further
accelerate momentum of the company’s digital flywheel and mobile
ecosystem, including an innovative conversation ordering system,
called My Starbucks Barista, powered by groundbreaking
Artificial Intelligence for the Starbucks mobile app, and a new
social gifting and mobile payment platform in China through
WeChat.
- The China/Asia Pacific segment now has
three markets with over 1,000 total stores, with Starbucks China
surpassing 2,500 stores in the quarter, the South Korea market
celebrating its 1,000th store opening, and Starbucks Japan reaching
1,245 stores.
- The company repurchased 7.6 million
shares of common stock in Q1 FY17; 110 million shares remain
available for purchase under current authorizations.
- The Board of Directors declared a cash
dividend of $0.25 per share, payable on February 24, 2017 to
shareholders of record as February 9, 2017.
Conference Call
Starbucks will hold a conference call today at 2:00 p.m. Pacific
Time, which will be hosted by Howard Schultz, chairman and ceo;
Kevin Johnson, president and coo; and Scott Maw, cfo. The call will
be webcast and can be accessed at http://investor.starbucks.com. A replay of the
webcast will be available until end of day Saturday, February 25,
2017.
About Starbucks
Since 1971, Starbucks Coffee Company has been committed to
ethically sourcing and roasting high-quality arabica coffee. Today,
with stores around the globe, the company is the premier roaster
and retailer of specialty coffee in the world. Through our
unwavering commitment to excellence and our guiding principles, we
bring the unique Starbucks Experience to life for every customer
through every cup. To share in the experience, please visit us in
our stores or online at news.starbucks.com or
www.starbucks.com.
Forward-Looking
Statements
This release contains forward-looking statements relating to
certain company initiatives, strategies and plans, as well as
trends in or expectations regarding our diversified business model,
the strength, resilience and potential of our business, operations
and brand, our customer base, our innovation, growth and growth
opportunities and related investments, our Starbucks Reserve®
Roasteries and Starbucks Reserve® stores, return to shareholders,
our strategic, operational and digital moves, our outlook for
fiscal 2017, our long term financial targets, earnings per share,
revenues, operating margins, capital expenditures, tax rate,
anticipated costs related to the integration of Starbucks Japan,
comparable store sales and transactions, and net new stores. These
forward-looking statements are based on currently available
operating, financial and competitive information and are subject to
a number of significant risks and uncertainties. Actual future
results may differ materially depending on a variety of factors
including, but not limited to, fluctuations in U.S. and
international economies and currencies, our ability to preserve,
grow and leverage our brands, potential negative effects of
incidents involving food or beverage-borne illnesses, tampering,
contamination or mislabeling, potential negative effects of
material breaches of our information technology systems to the
extent we experience a material breach, material failures of our
information technology systems, costs associated with, and the
successful execution of, the company’s initiatives and plans,
including the integration of Starbucks Japan, the 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 October 2, 2016. The
company assumes no obligation to update any of these
forward-looking statements.
STARBUCKS CORPORATION
CONSOLIDATED STATEMENTS OF
EARNINGS
(unaudited, in millions, except per share
data)
Quarter Ended Quarter Ended Jan 1,
2017 Dec 27, 2015
%
Change
Jan 1, 2017 Dec 27, 2015
As a % of
totalnet revenues Net revenues: Company-operated
stores $ 4,469.3 $ 4,210.6 6.1 % 78.0 % 78.4 % Licensed stores
602.4 540.6 11.4 10.5 10.1 CPG, foodservice and other 661.2
622.3 6.3 11.5 11.6
Total net revenues
5,732.9 5,373.5 6.7 100.0 100.0
Cost of sales including occupancy costs 2,295.0 2,186.2 5.0 40.0
40.7 Store operating expenses 1,638.2 1,506.2 8.8 28.6 28.0 Other
operating expenses 145.4 146.2 (0.5 ) 2.5 2.7 Depreciation and
amortization expenses 249.7 235.5 6.0 4.4 4.4 General and
administrative expenses 356.4 305.5 16.7 6.2
5.7 Total operating expenses 4,684.7 4,379.6 7.0 81.7 81.5
Income from equity investees 84.4 64.1 31.7 1.5
1.2
Operating income 1,132.6
1,058.0 7.1 19.8 19.7 Interest income
and other, net 24.1 8.1 197.5 0.4 0.2 Interest expense (23.8 )
(16.5 ) 44.2 (0.4 ) (0.3 ) Earnings before income taxes 1,132.9
1,049.6 7.9 19.8 19.5 Income tax expense 381.4 361.9
5.4 6.7 6.7 Net earnings including noncontrolling
interests 751.5 687.7 9.3 13.1 12.8 Net earnings/(loss)
attributable to noncontrolling interests (0.3 ) 0.1 nm —
—
Net earnings attributable to Starbucks
$ 751.8 $ 687.6
9.3 13.1 % 12.8 % Net
earnings per common share - diluted $ 0.51
$ 0.46 10.9 % Weighted avg.
shares outstanding - diluted 1,470.5 1,503.3 Cash dividends
declared per share $ 0.25 $ 0.20
Supplemental Ratios:
Store operating expenses as a percentage of company-operated store
revenues 36.7 % 35.8 % Effective tax rate including noncontrolling
interests 33.7 % 34.5 %
Segment Results
(in millions)
Americas
Jan 1, 2017 Dec
27, 2015
%
Change
Jan 1, 2017 Dec 27, 2015
Quarter
Ended
As a % of Americas
total net revenues
Net revenues: Company-operated stores $ 3,561.0 $ 3,330.7
6.9 % 89.2 % 89.4 % Licensed stores 421.3 387.6 8.7 10.6 10.4
Foodservice and other 9.1 7.9 15.2 0.2 0.2
Total net revenues 3,991.4 3,726.2
7.1 100.0 100.0 Cost of sales including
occupancy costs 1,440.3 1,346.9 6.9 36.1 36.1 Store operating
expenses 1,356.3 1,226.8 10.6 34.0 32.9 Other operating expenses
31.9 32.6 (2.1 ) 0.8 0.9 Depreciation and amortization expenses
152.4 140.8 8.2 3.8 3.8 General and administrative expenses 52.0
44.5 16.9 1.3 1.2 Total operating
expenses 3,032.9 2,791.6 8.6 76.0 74.9
Operating income $ 958.5 $
934.6 2.6 % 24.0 %
25.1 % Supplemental Ratios: Store operating
expenses as a percentage of company-operated store revenues 38.1 %
36.8 %
China/Asia Pacific (CAP)
Jan 1, 2017 Dec
27, 2015
%
Change
Jan 1, 2017 Dec 27, 2015
Quarter
Ended
As a % of CAP
total net revenues
Net revenues: Company-operated stores $ 691.5 $ 580.1 19.2 %
89.7 % 88.8 % Licensed stores 78.0 72.2 8.0 10.1 11.0 Foodservice
and other 1.3 1.3 — 0.2 0.2
Total
net revenues 770.8 653.6 17.9 100.0
100.0 Cost of sales including occupancy costs 337.3 295.0
14.3 43.8 45.1 Store operating expenses 204.3 175.3 16.5 26.5 26.8
Other operating expenses 19.1 14.8 29.1 2.5 2.3 Depreciation and
amortization expenses 48.6 42.1 15.4 6.3 6.4 General and
administrative expenses 40.6 30.5 33.1 5.3 4.7
Total operating expenses 649.9 557.7 16.5 84.3 85.3 Income
from equity investees 42.5 31.2 36.2 5.5 4.8
Operating income $ 163.4
$ 127.1 28.6 % 21.2
% 19.4 % Supplemental Ratios: Store
operating expenses as a percentage of company-operated store
revenues 29.5 % 30.2 %
EMEA
Jan 1, 2017 Dec
27, 2015
%
Change
Jan 1, 2017 Dec 27, 2015
Quarter
Ended
As a % of EMEA
total net revenues
Net revenues: Company-operated stores $ 145.9 $ 218.9 (33.3
)% 55.6 % 69.9 % Licensed stores 102.2 79.7 28.2 38.9 25.5
Foodservice 14.3 14.4 (0.7 ) 5.4 4.6
Total net revenues 262.4 313.0 (16.2
) 100.0 100.0 Cost of sales including
occupancy costs 136.1 151.4 (10.1 ) 51.9 48.4 Store operating
expenses 46.9 73.9 (36.5 ) 17.9 23.6 Other operating expenses 16.0
14.8 8.1 6.1 4.7 Depreciation and amortization expenses 7.6 11.5
(33.9 ) 2.9 3.7 General and administrative expenses 11.7
14.5 (19.3 ) 4.5 4.6 Total operating expenses
218.3 266.1 (18.0 ) 83.2 85.0 Income from equity investees —
1.2 (100.0 ) — 0.4
Operating income
$ 44.1 $ 48.1 (8.3
)% 16.8 % 15.4 % Supplemental
Ratios: Store operating expenses as a percentage of
company-operated store revenues 32.1 % 33.8 %
Channel Development
Jan 1, 2017 Dec 27,
2015
%
Change
Jan 1, 2017 Dec 27, 2015
Quarter
Ended
As a % ofChannel Development
total net revenues
Net revenues: CPG $ 437.1 $ 399.2 9.5 % 78.9 % 78.0 %
Foodservice 116.6 112.9 3.3 21.1 22.0
Total net revenues 553.7 512.1 8.1
100.0 100.0 Cost of sales 288.5 285.4 1.1 52.1 55.7
Other operating expenses 60.4 60.3 0.2 10.9 11.8 Depreciation and
amortization expenses 0.6 0.7 (14.3 ) 0.1 0.1 General and
administrative expenses 3.2 4.1 (22.0 ) 0.6
0.8 Total operating expenses 352.7 350.5 0.6 63.7 68.4
Income from equity investees 41.9 31.7 32.2 7.6
6.2
Operating income $ 242.9
$ 193.3 25.7 %
43.9 % 37.7 %
All Other Segments
Jan 1, 2017 Dec 27,
2015 %Change
Quarter
Ended
Net revenues: Company-operated stores $ 70.9 $ 80.9
(12.4 )% Licensed stores 0.9 1.1 (18.2 ) CPG, foodservice and other
82.8 86.6 (4.4 )
Total net revenues
154.6 168.6 (8.3 ) Cost of sales
including occupancy costs 90.4 95.3 (5.1 ) Store operating expenses
30.7 30.2 1.7 Other operating expenses 17.5 23.7 (26.2 )
Depreciation and amortization expenses 2.9 3.6 (19.4 ) General and
administrative expenses 3.5 9.9 (64.6 ) Total
operating expenses 145.0 162.7 (10.9 )
Operating
income $ 9.6 $ 5.9
62.7 %
Supplemental
Information
The following supplemental information is provided for
historical and comparative purposes.
U.S. Supplemental
Data
Quarter Ended ($ in millions)
Jan 1, 2017 Dec 27, 2015 Change
Revenues $3,654.4 $3,410.8 7% Comparable Store Sales
Growth(1) 3% 9% Change in Transactions (2)% 4% Change in Ticket
5% 5% (1) Includes only
Starbucks company-operated stores open 13 months or longer.
Comparable store sales exclude the effect of fluctuations in
foreign currency exchange rates.
Store
Data
Net stores opened/(closed) and
transferredduring the period
Quarter Ended Stores open as
of Jan 1, 2017 Dec 27,
2015 Jan 1, 2017 Dec 27,
2015 Americas: Company-operated stores 75 81 9,094 8,752
Licensed stores 176 90 6,764 6,222 Total
Americas 251 171 15,858 14,974 China/Asia
Pacific: Company-operated stores 104 90 2,915 2,542 Licensed stores
199 191 3,831 3,201 Total China/Asia Pacific
303 281 6,746 5,743 EMEA: Company-operated
stores (18 ) (39 ) 505 698 Licensed stores 113 118
2,232 1,743 Total EMEA 95 79 2,737
2,441 All Other Segments: Company-operated stores (2 ) (1 ) 356 374
Licensed stores 2 (2 ) 37 39 Total All Other Segments
— (3 ) 393 413
Total Company 649 528
25,734 23,571
Non-GAAP Disclosure
In addition to the GAAP results provided in this release, the
company provides certain non-GAAP financial measures. Non-GAAP
financial measures are not in accordance with, or alternatives for,
generally accepted accounting principles in the United States. Our
non-GAAP financial measures of non-GAAP operating income, non-GAAP
operating margin and non-GAAP EPS exclude the below listed items.
The GAAP measures most directly comparable to non-GAAP operating
income, non-GAAP operating margin and non-GAAP EPS are operating
income, operating margin and diluted net earnings per share,
respectively.
Non-GAAP Exclusion
Rationale Starbucks Japan acquisition-related
items Management excludes Starbucks Japan
acquisition-related transaction costs as 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 excludes Starbucks Japan integration costs and
amortization of the acquired intangible assets when evaluating the
performance because these expenses are not representative of our
core business operations. Although these items will affect earnings
per share beyond the current fiscal year, the majority of these
costs will be recognized over a finite period of time. 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 future amortization was fixed at the time of
acquisition and generally cannot subsequently be changed or
influenced by management. Sale of Germany retail operations
Management excludes the gain on sale of the Germany retail
operations and related costs as these items do not reflect future
gains, losses, costs or tax benefits and do not contribute to a
meaningful evaluation of the company's past or future operating
performance. Other tax matters
Management excludes incremental tax
benefits in the U.S. as these tax benefits do not contribute to a
meaningful evaluation of the company's past or future operating
performance.
Impact of the extra week in FY16 Management excludes the
impact of the extra week in full year fiscal 2016 non-GAAP earnings
per share because it is not a regular occurrence in the company's
fiscal calendar, and this exclusion provides a more relative
non-GAAP EPS comparison of the company's 2016 performance when
compared to full year projected fiscal 2017 performance, which will
not have an extra week.
Non-GAAP operating income, non-GAAP operating margin and
non-GAAP EPS may have limitations as analytical tools. These
measures should not be considered in isolation or as a substitute
for analysis of the company's results as reported under GAAP. Other
companies may calculate these non-GAAP financial measures
differently than the company does, limiting the usefulness of those
measures for comparative purposes.
STARBUCKS CORPORATION
RECONCILIATION OF SELECTED GAAP
MEASURES TO NON-GAAP MEASURES
(unaudited)
Quarter Ended Jan 1,
2017 Dec 27, 2015
Change
Consolidated
Operating income, as reported (GAAP) $ 1,132.6 $ 1,058.0 7.1 %
Starbucks Japan acquisition-related items - other(1) 14.0
12.3 Non-GAAP operating income $ 1,146.6 $ 1,070.3
7.1 % Operating margin, as reported (GAAP) 19.8 %
19.7 % 10 bps Starbucks Japan acquisition-related items - other(1)
0.2 0.2 Non-GAAP operating margin 20.0 % 19.9 % 10
bps Diluted net earnings per share, as reported (GAAP) $
0.51 $ 0.46 10.9 % Starbucks Japan acquisition-related items -
other(1) 0.01 0.01 Income tax effect on Non-GAAP adjustments(2) —
— Non-GAAP net earnings per share $ 0.52 $
0.46 13.0 %
China/Asia
Pacific (CAP)
Operating income, as reported (GAAP) $ 163.4 $ 127.1 28.6 %
Starbucks Japan acquisition-related items(3) 14.0 12.1
Non-GAAP operating income $ 177.4 $ 139.2 27.4
% Operating margin, as reported (GAAP) 21.2 % 19.4 % 180 bps
Starbucks Japan acquisition-related items(3) 1.8 1.9
Non-GAAP operating margin 23.0 % 21.3 % 170 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) Income tax effect on non-GAAP
adjustments was determined based on the nature of the underlying
items and their relevant jurisdictional tax rates. (3) Includes
ongoing amortization expense of acquired intangible assets
associated with the acquisition and post-acquisition integration
costs, such as compensation-related costs.
Year Ended Oct
1, 2017 Oct 2, 2016
Consolidated
(Projected,
52 Weeks Ended)
(As Reported,
53 Weeks Ended)
Change Diluted net earnings per share (GAAP) $ 2.09 -
$2.11 $ 1.90 10 % - 11% Starbucks Japan acquisition-related items -
other(1)
0.04
0.04 Sale of Germany retail operations(2) — — Income tax effect on
Non-GAAP adjustments(3) (0.01 ) (0.01 ) Other tax matters(4) —
(0.01 ) Non-GAAP net earnings per share $ 2.12 - $2.14 $ 1.91 11 %
- 12%
Impact of the extra week - Q4 FY16
— (0.09 )
Income tax effect on the impact of the
extra week - Q4 FY16(3)
— 0.03 Non-GAAP net earnings per share (52-week
basis) $ 2.12 - $2.14 $ 1.85 15 % - 16% (1) Includes
ongoing amortization expense of acquired intangible assets and
transaction and integration costs, such as incremental IT and
compensation-related costs associated with the acquisition. (2) The
sale of Germany retail operations includes certain costs associated
with the transfer of these stores to licensed stores. (3) Income
tax effect on non-GAAP adjustments was determined based on the
nature of the underlying items and their relevant jurisdictional
tax rates. (4) Other tax matters include the incremental benefit
from additional domestic manufacturing deductions claimed in our
U.S. consolidated tax returns for periods prior to FY16.
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Starbucks Contact, Investor Relations:Tom Shaw,
206-318-7118investorrelations@starbucks.comorStarbucks Contact,
Media:Alisha Damodaran, 206-318-7100press@starbucks.com
Starbucks (NASDAQ:SBUX)
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