Q1 Comparable Store Sales Up 5% Globally, Led
by 6% Comp Growth in the U.S. and 3% Comp Growth in China
Global Net Store Growth of 6% Versus Prior
Year, Led by 16% Net Store Growth in China
GAAP EPS of $0.74; Non-GAAP EPS of $0.79
Active Starbucks® Rewards Membership in the
U.S. Up 16% Year-Over-Year to 18.9 Million
Starbucks Corporation (NASDAQ: SBUX) today reported financial
results for its 13-week fiscal first quarter ended December 29,
2019. GAAP results in fiscal 2020 and fiscal 2019 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.
“Building on solid business momentum from fiscal 2019, Starbucks
performed very well throughout the first quarter, including one of
the strongest holiday seasons in the history of our company. As a
result, we are off to a strong start in fiscal 2020,” said Kevin
Johnson, president and ceo. “Our growth was fueled by a healthy
balance of comparable sales growth and new store development, as
well as continued expansion of our Global Coffee Alliance with
Nestlé. Investments in our partners, beverage innovation and
digital customer relationships contributed not only to strong
topline growth, but also significant margin expansion in the
quarter.”
“Our partners are the center of creating a special Starbucks
Experience for each and every customer we serve, and I am very
grateful for their extraordinary efforts through this holiday
quarter. As we begin our fiscal second quarter, I want to
acknowledge the dynamic situation our partners in China are
navigating as health officials respond to the coronavirus. As
events unfold, we will be transparent with all stakeholders in
communicating how we are responding to these extraordinary
circumstances and the implications for our near-term business
results. We remain optimistic and committed to the long-term
opportunity in China, building on our brand heritage and 20-year
legacy of profitable growth,” concluded Johnson.
Q1 Fiscal 2020
Highlights
- Global comparable store sales up 5%, driven by a 3% increase in
average ticket and a 2% increase in comparable transactions
- Americas comparable store sales up 6%, driven by a 3% increase
in average ticket and a 2% increase in comparable transactions;
U.S. comparable store sales up 6%, with comparable transactions up
3%
- International comparable store sales up 1%, driven by a 2%
increase in average ticket and a 1% decrease in comparable
transactions; China comparable store sales up 3%, with comparable
transactions up 1%
- The company opened 539 net new stores in Q1, yielding 31,795
stores at the end of the quarter, a 6% increase over the prior
year
- Consolidated net revenues of $7.1 billion grew 7% over the
prior year
- Consolidated net revenues grew 9% over the prior year adjusted
for unfavorable impacts of approximately 2% from Streamline-driven
activities
- Streamline-driven activities primarily included the conversion
of certain international retail operations from company-operated to
licensed models
- GAAP operating margin expanded 190 basis points year-over-year
to 17.2%, primarily due to sales leverage, supply chain
efficiencies and lower restructuring and impairment charges,
partially offset by growth in wages and benefits, as well as
investments in store labor hours
- Non-GAAP operating margin of 18.2% expanded 80 basis points
compared to the prior year
- GAAP Earnings Per Share of $0.74, up 21% over the prior year
- Non-GAAP EPS of $0.79, up 5% over the prior year. Excluding an
11% headwind from income tax rate favorability related to fiscal
year 2019, non-GAAP EPS increased 16%
- The company returned $1.6 billion to shareholders through a
combination of share repurchases and dividends
- Starbucks® Rewards loyalty program grew to 18.9 million active
members in the U.S., up 16% year-over-year
- The company adopted the new lease accounting guidance and
recognized right-of-use assets of $8.4 billion with corresponding
lease obligations of $9.0 billion. Adoption of the new guidance did
not have a material impact on our consolidated statement of
earnings
Q1 Americas Segment
Results
Quarter Ended
Change (%)
($ in millions)
Dec 29, 2019
Dec 30, 2018
Comparable Store Sales Growth (1)
6%
4%
Change in Transactions
2%
0%
Change in Ticket
3%
4%
Store Count
18,203
17,653
3%
Revenues
$5,010.9
$4,612.5
9%
Operating Income
$1,098.8
$968.7
13%
Operating Margin
21.9%
21.0%
90 bps
(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 and Siren Retail stores.
Net revenues for the Americas segment grew 9% over Q1 FY19 to
$5.0 billion in Q1 FY20, primarily driven by 6% growth in
comparable store sales and 550 net new store openings, or 3% store
growth, over the past 12 months.
Operating income grew 13% to $1.1 billion in Q1 FY20, up from
$1.0 billion in Q1 FY19. Operating margin of 21.9% expanded 90
basis points, primarily due to sales leverage, supply chain
efficiencies and lower restructuring and impairment charges,
partially offset by growth in wages and benefits, as well as
investments in store labor hours and higher occupancy costs.
Q1 International Segment
Results
Quarter Ended
Change (%)
($ in millions)
Dec 29, 2019
Dec 30, 2018
Comparable Store Sales Growth (1)
1%
2%
Change in Transactions
(1)%
1%
Change in Ticket
2%
1%
Store Count
13,592
12,212
11%
Revenues
$1,571.1
$1,504.0
4%
Operating Income
$275.9
$230.0
20%
Operating Margin
17.6%
15.3%
230 bps
(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 and Siren Retail stores.
Net revenues for the International segment grew 4% over Q1 FY19
to $1.6 billion in Q1 FY20, primarily driven by 1,380 net new store
openings, or 11% store growth, over the past 12 months and 1%
growth in comparable store sales, partially offset by a 5%
revenue-dilutive impact of converting certain retail businesses to
fully licensed markets.
Q1 FY20 operating income of $275.9 million grew 20% over Q1 FY19
operating income of $230.0 million. Operating margin expanded 230
basis points to 17.6%, primarily due to sales leverage, supply
chain efficiencies, the impact of the conversions of certain retail
businesses to fully licensed markets and lower restructuring and
impairment charges, partially offset by product mix shift and
strategic investments.
Q1 Channel Development Segment
Results
Quarter Ended
Change (%)
($ in millions)
Dec 29, 2019
Dec 30, 2018
Revenues
$494.6
$504.6
(2)%
Operating Income
$175.5
$175.8
—%
Operating Margin
35.5%
34.8%
70 bps
Net revenues for the Channel Development segment declined 2%
from Q1 FY19 to $494.6 million in Q1 FY20, primarily due to lapping
prior year product sales to Unilever as a result of the sale and
transition of the Tazo brand, partially offset by expansion of the
Global Coffee Alliance.
Operating income of $175.5 million in Q1 FY20 was flat compared
to Q1 FY19. Operating margin expanded 70 basis points to 35.5%,
primarily due to the lapping of prior year Nestlé transaction
costs, distribution efficiencies and favorable business mix shift,
partially offset by incremental costs to develop and grow the
Global Coffee Alliance.
Fiscal 2020 Guidance
The company's fiscal year 2020 guidance is unchanged from what
was provided in conjunction with its Q4 fiscal 2019 earnings report
which excludes any impact of the coronavirus.
Currently, we have closed more than half of our stores in China
and continue to monitor and modify the operating hours of all of
our stores in the market in response to the outbreak of the
coronavirus. This is expected to be temporary. Given the dynamic
nature of these circumstances, the duration of business disruption,
reduced customer traffic and related financial impact cannot be
reasonably estimated at this time but are expected to materially
affect our International segment and consolidated results for the
second quarter and full year of fiscal 2020. The company will
update its guidance for fiscal 2020 when we can reasonably estimate
the impact of the coronavirus.
Company Updates
1. In October, Starbucks announced a $10 million investment in
four established Community Development Financial Institutions to
drive economic opportunities in Chicago. The investment is expected
to finance more than 500 small business loans focused on supporting
entrepreneurs in Chicago's underserved communities.
2. In November, Starbucks opened its first-ever Starbucks®
Pickup store in New York City's Penn Plaza. This unique location is
designed for customers on-the-go and uses Starbucks Mobile Order
& Pay as the primary ordering and payment method.
3. In November, Starbucks announced a new flexible benefits
program for its partners in China known as Flex Star Benefits. The
program empowers partners to make individual benefits selections
based on what they need from a variety of options designed to help
partners enrich themselves, provide better care for loved ones, or
make a positive difference to their communities.
4. In November, Starbucks announced that it will eliminate
single-use plastic straws from nearly 1,500 stores across Japan
starting in January 2020. The change will introduce new paper
straws made of responsibly-sourced paper certified by the Forest
Stewardship Council® and will eliminate an estimated 200 million
single-use plastic straws annually from Starbucks stores in
Japan.
5. The company repurchased 13.0 million shares of common stock
in Q1 fiscal 2020; approximately 16.2 million shares remain
available for purchase under the current authorization.
6. The Board of Directors declared a cash dividend of $0.41 per
share, payable on February 21, 2020, to shareholders of record as
of February 6, 2020.
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
Patrick Grismer, 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 Thursday,
February 27, 2020.
About Starbucks
Since 1971, Starbucks Coffee Company has been committed to
ethically sourcing and roasting high-quality arabica coffee. Today,
with more than 31,000 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 stories.starbucks.com or
www.starbucks.com.
Forward-Looking
Statements
Certain statements contained herein 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,” “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: certain company initiatives,
strategies and plans, as well as trends in or expectations
regarding our diversified business model; the strength, resilience,
momentum and potential of our business, operations and brand; the
impacts, benefits, goals and expectations of our Streamline-driven
initiatives and long-term investments; the execution and
anticipated impact of our “Growth at Scale” agenda, with a focus on
our two lead growth markets of the U.S. and China; expanding the
global reach of the Starbucks brand through our Global Coffee
Alliance with Nestlé; increasing shareholder returns; our
commitment to the long-term opportunity in China, building on our
brand heritage and legacy of profitable growth; the estimated
impact of the changes in U.S. tax law; outlook, guidance and
projections for revenues, earnings per share, operating income,
operating margins, comparable store sales, net new stores, capital
expenditures, interest expense, G&A expenses, tax rates, fiscal
2020 guidance and long-term G&A expense guidance. 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 and trends 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; 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 integration of
the East China business and 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 and evolving consumer preferences and tastes; changes in
the availability and cost of labor; 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; the disruption to our business related to the
coronavirus; 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” section of Starbucks
Annual Report on Form 10-K for the fiscal year ended September 29,
2019. The company assumes no obligation to update any of these
forward-looking statements.
Non-GAAP Financial
Measures
Certain non-GAAP measures included in our press release 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
CONSOLIDATED STATEMENTS OF
EARNINGS
(unaudited, in millions, except
per share data)
Quarter Ended
Quarter Ended
Dec 29, 2019
Dec 30, 2018
% Change
Dec 29, 2019
Dec 30, 2018
As a % of total net
revenues
Net revenues:
Company-operated stores
$
5,780.7
$
5,370.3
7.6
%
81.5
%
81.0
%
Licensed stores
792.0
737.1
7.4
11.2
11.1
Other
524.4
525.3
(0.2)
7.4
7.9
Total net revenues
7,097.1
6,632.7
7.0
100.0
100.0
Cost of sales
2,236.4
2,175.8
2.8
31.5
32.8
Store operating expenses
2,821.5
2,586.8
9.1
39.8
39.0
Other operating expenses
101.8
97.6
4.3
1.4
1.5
Depreciation and amortization expenses
351.0
333.4
5.3
4.9
5.0
General and administrative expenses
434.2
448.0
(3.1)
6.1
6.8
Restructuring and impairments
6.3
43.2
(85.4)
0.1
0.7
Total operating expenses
5,951.2
5,684.8
4.7
83.9
85.7
Income from equity investees
73.9
67.8
9.0
1.0
1.0
Operating income
1,219.8
1,015.7
20.1
17.2
15.3
Interest income and other, net
15.9
24.8
(35.9)
0.2
0.4
Interest expense
(91.9)
(75.0)
22.5
(1.3)
(1.1)
Earnings before income taxes
1,143.8
965.5
18.5
16.1
14.6
Income tax expense
258.5
205.1
26.0
3.6
3.1
Net earnings including noncontrolling
interests
885.3
760.4
16.4
12.5
11.5
Net earnings/(loss) attributable to
noncontrolling interests
(0.4)
(0.2)
nm
—
—
Net earnings attributable to
Starbucks
$
885.7
$
760.6
16.4
12.5
%
11.5
%
Net earnings per common share -
diluted
$
0.74
$
0.61
21.3
%
Weighted avg. shares outstanding -
diluted
1,191.0
1,253.4
Cash dividends declared per share
$
0.41
$
0.36
Supplemental Ratios:
Store operating expenses as a % of
company-operated store revenues
48.8
%
48.2
%
Effective tax rate including
noncontrolling interests
22.6
%
21.2
%
Segment Results
(in millions)
Americas
Dec 29, 2019
Dec 30, 2018
% Change
Dec 29, 2019
Dec 30, 2018
Quarter
Ended
As a % of Americas
total net revenues
Net revenues:
Company-operated stores
$
4,471.0
$
4,092.2
9.3
%
89.2
%
88.7
%
Licensed stores
537.3
514.6
4.4
10.7
11.2
Other
2.6
5.7
(54.4)
0.1
0.1
Total net revenues
5,010.9
4,612.5
8.6
100.0
100.0
Cost of sales
1,388.4
1,351.3
2.7
27.7
29.3
Store operating expenses
2,214.4
1,983.1
11.7
44.2
43.0
Other operating expenses
42.5
44.5
(4.5)
0.8
1.0
Depreciation and amortization expenses
189.2
166.9
13.4
3.8
3.6
General and administrative expenses
72.4
75.1
(3.6)
1.4
1.6
Restructuring and impairments
5.2
22.9
(77.3)
0.1
0.5
Total operating expenses
3,912.1
3,643.8
7.4
78.1
79.0
Operating income
$
1,098.8
$
968.7
13.4
%
21.9
%
21.0
%
Supplemental Ratio:
Store operating expenses as a % of
company-operated store revenues
49.5
%
48.5
%
International
Dec 29, 2019
Dec 30, 2018
%
Change
Dec 29, 2019
Dec 30, 2018
Quarter
Ended
As a % of
International
total net revenues
Net revenues:
Company-operated stores
$
1,309.7
$
1,278.1
2.5
%
83.4
%
85.0
%
Licensed stores
254.7
222.5
14.5
16.2
14.8
Other
6.7
3.4
97.1
0.4
0.2
Total net revenues
1,571.1
1,504.0
4.5
100.0
100.0
Cost of sales
488.5
462.7
5.6
31.1
30.8
Store operating expenses
607.1
603.7
0.6
38.6
40.1
Other operating expenses
35.9
31.3
14.7
2.3
2.1
Depreciation and amortization expenses
126.6
127.0
(0.3)
8.1
8.4
General and administrative expenses
67.2
69.3
(3.0)
4.3
4.6
Restructuring and impairments
0.8
6.4
(87.5)
0.1
0.4
Total operating expenses
1,326.1
1,300.4
2.0
84.4
86.5
Income from equity investees
30.9
26.4
17.0
2.0
1.8
Operating income
$
275.9
$
230.0
20.0
%
17.6
%
15.3
%
Supplemental Ratio:
Store operating expenses as a % of
company-operated store revenues
46.4
%
47.2
%
Channel Development
Dec 29, 2019
Dec 30, 2018
% Change
Dec 29, 2019
Dec 30, 2018
Quarter
Ended
As a % of Channel
Development net revenues
Net revenues
$
494.6
$
504.6
(2.0)
%
Cost of sales
338.8
348.4
(2.8)
68.5
%
69.0
%
Other operating expenses
20.6
18.6
10.8
4.2
3.7
Depreciation and amortization expenses
0.3
—
nm
0.1
—
General and administrative expenses
2.4
3.2
(25.0)
0.5
0.6
Total operating expenses
362.1
370.2
(2.2)
73.2
73.4
Income from equity investees
43.0
41.4
3.9
8.7
8.2
Operating income
$
175.5
$
175.8
(0.2)
%
35.5
%
34.8
%
Corporate and Other
Dec 29, 2019
Dec 30, 2018
% Change
Quarter
Ended
Net revenues
$
20.5
$
11.6
76.7
%
Cost of sales
20.7
13.4
54.5
Other operating expenses
2.8
3.2
(12.5)
Depreciation and amortization expenses
34.9
39.5
(11.6)
General and administrative expenses
292.2
300.4
(2.7)
Restructuring and impairments
0.3
13.9
nm
Total operating expenses
350.9
370.4
(5.3)
Operating loss
$
(330.4)
$
(358.8)
(7.9)
%
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)
Dec 29, 2019
Sep 29, 2019
ASSETS
Current assets:
Cash and cash equivalents
$
3,040.5
$
2,686.6
Short-term investments
68.4
70.5
Accounts receivable, net
908.1
879.2
Inventories
1,408.7
1,529.4
Prepaid expenses and other current
assets
474.0
488.2
Total current assets
5,899.7
5,653.9
Long-term investments
199.8
220.0
Equity investments
411.3
396.0
Property, plant and equipment, net
6,390.9
6,431.7
Operating lease, right-of-use asset
8,358.5
—
Deferred income taxes, net
1,731.4
1,765.8
Other long-term assets
484.7
479.6
Other intangible assets
739.1
781.8
Goodwill
3,515.9
3,490.8
TOTAL ASSETS
$
27,731.3
$
19,219.6
LIABILITIES AND SHAREHOLDERS'
EQUITY/(DEFICIT)
Current liabilities:
Accounts payable
$
1,085.6
$
1,189.7
Accrued liabilities
1,637.8
1,753.7
Accrued payroll and benefits
578.5
664.6
Income taxes payable
1,414.0
1,291.7
Current portion of operating lease
liability
1,268.9
—
Store value card liability and current
portion of deferred revenue
1,694.1
1,269.0
Short-term debt
497.9
—
Current portion of long-term debt
498.7
—
Total current liabilities
8,675.5
6,168.7
Long-term debt
10,653.2
11,167.0
Operating lease liability
7,711.7
—
Deferred revenue
6,748.8
6,744.4
Other long-term liabilities
701.2
1,370.5
Total liabilities
34,490.4
25,450.6
Shareholders’ equity/(deficit):
Common stock ($0.001 par value) —
authorized, 2,400.0 shares; issued and outstanding, 1,174.5 and
1,184.6 shares, respectively
1.2
1.2
Additional paid-in capital
41.1
41.1
Retained earnings/(deficit)
(6,414.8)
(5,771.2)
Accumulated other comprehensive loss
(387.4)
(503.3)
Total shareholders’ equity/(deficit)
(6,759.9)
(6,232.2)
Noncontrolling interests
0.8
1.2
Total equity/(deficit)
(6,759.1)
(6,231.0)
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY/(DEFICIT)
$
27,731.3
$
19,219.6
STARBUCKS CORPORATION
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(unaudited and in millions)
Quarter
Ended
Dec 29, 2019
Dec 30, 2018
OPERATING ACTIVITIES:
Net earnings including noncontrolling
interests
$
885.3
$
760.4
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization
369.2
350.8
Deferred income taxes, net
10.4
(354.6)
Income earned from equity method
investees
(62.9)
(55.0)
Distributions received from equity method
investees
64.3
63.7
Stock-based compensation
90.3
97.3
Non-cash lease costs
294.9
—
Other
5.1
6.1
Cash provided by changes in operating
assets and liabilities:
Accounts receivable
(22.9)
(28.8)
Inventories
122.8
44.8
Prepaid expenses and other current
assets
(28.5)
847.3
Income taxes payable
125.1
489.3
Accounts payable
(110.3)
(21.3)
Deferred revenue
426.7
362.7
Operating lease liability
(301.6)
—
Other operating assets and liabilities
(31.8)
(183.7)
Net cash provided by operating
activities
1,836.1
2,379.0
INVESTING ACTIVITIES:
Purchases of investments
(38.0)
(108.7)
Sales of investments
64.6
32.1
Maturities and calls of investments
1.3
14.2
Additions to property, plant and
equipment
(394.3)
(431.4)
Other
(19.9)
(16.6)
Net cash used in investing activities
(386.3)
(510.4)
FINANCING ACTIVITIES:
Net proceeds from issuance of commercial
paper
398.9
—
Proceeds from issuance of commercial paper
(maturities longer than 90 days)
99.0
—
Repayments of long-term debt
—
(350.0)
Proceeds from issuance of common stock
33.1
108.4
Cash dividends paid
(484.2)
(446.7)
Repurchase of common stock
(1,091.4)
(5,114.7)
Minimum tax withholdings on share-based
awards
(78.4)
(55.3)
Other
—
(0.3)
Net cash used by financing activities
(1,123.0)
(5,858.6)
Effect of exchange rate changes on cash
and cash equivalents
27.1
(4.7)
Net increase/(decrease) in cash and cash
equivalents
353.9
(3,994.7)
CASH AND CASH EQUIVALENTS:
Beginning of period
2,686.6
8,756.3
End of period
$
3,040.5
$
4,761.6
Supplemental
Information
The following supplemental information is provided for
historical and comparative purposes.
U.S. Supplemental
Data
Quarter Ended
($ in millions)
Dec 29, 2019
Dec 30, 2018
Change (%)
Revenues
$4,583.0
$4,216.0
9%
Comparable Store Sales Growth
(1)
6%
4%
Change in Transactions
3%
0%
Change in Ticket
3%
4%
Store Count
15,188
14,767
3%
(1) Includes only Starbucks®
company-operated stores open 13 months or longer. The results from
Siren Retail operations are not reflected in comparable store
sales.
China
Supplemental Data
Quarter Ended
($ in millions)
Dec 29, 2019
Dec 30, 2018
Change (%)
Revenues
$745.0
$657.7
13%
Comparable Store Sales Growth
(1)
3%
0%
Change in Transactions
1%
(2)%
Change in Ticket
2%
2%
Store Count
4,292
3,685
16%
(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 and Siren Retail stores.
Store
Data
Net stores opened/(closed) and
transferred during the period
Quarter Ended
Stores open as of
Dec 29, 2019
Dec 30, 2018
Dec 29, 2019
Dec 30, 2018
Americas:
Company-operated stores
46
87
10,020
9,777
Licensed stores
90
106
8,183
7,876
Total Americas
136
193
18,203
17,653
International:
Company-operated stores
199
188
6,059
5,839
Licensed stores
204
172
7,533
6,373
Total International
403
360
13,592
12,212
Corporate and Other (1):
Licensed stores
—
(12)
—
—
Total Corporate and Other
—
(12)
—
—
Total Company
539
541
31,795
29,865
(1) Corporate and Other store data
includes the closure of 12 Teavana® retail stores in the first
quarter of fiscal 2019.
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 G&A, non-GAAP operating income, non-GAAP
operating income growth, non-GAAP operating margin, non-GAAP
effective tax rate and non-GAAP EPS 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
EPS 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
Restructuring, impairment and optimization
costs
Management excludes restructuring charges
and business process optimization costs related to U.S.,
International and other business units. Additionally, management
excludes expenses related to divesting certain lower-margin
businesses and assets, such as closure of certain company-operated
stores. Management excludes these items for reasons discussed
above. These expenses are anticipated to be completed within a
finite period of time.
Transaction and integration-related
costs
Management excludes transaction and
integration costs 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.
2018 U.S. stock award
Management excludes the incremental
stock-based compensation award granted in the third quarter of
fiscal 2018 for reasons discussed above.
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.
Other tax matters
On December 22, 2017, the Tax Cuts and
Jobs Act was signed into U.S. law. Management excludes the
estimated transition tax on undistributed foreign earnings, the
impacts of estimated incremental foreign withholding taxes on
expected repatriated earnings and the re–measurement of deferred
tax assets and liabilities due to the reduction of the U.S. federal
corporate income tax rate 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 EPS may have limitations as analytical tools.
These measures should not be considered in isolation or as a
substitute for analysis of the company's results as reported under
GAAP. Other companies may calculate these non-GAAP financial
measures differently than the company does, limiting the usefulness
of those measures for comparative purposes.
STARBUCKS CORPORATION
RECONCILIATION OF SELECTED
GAAP MEASURES TO NON-GAAP MEASURES
(unaudited)
($ in millions)
Quarter Ended
Consolidated
Dec 29, 2019
Dec 30, 2018
Change
General and administrative expenses, as
reported (GAAP)
$
434.2
$
448.0
(3.1)%
Restructuring, impairment and optimization
costs (1)
(0.8)
(6.4)
International transaction and
integration-related items (2)
(2.5)
(2.9)
2018 U.S. stock award (3)
—
(23.1)
Nestlé transaction and integration-related
costs
(0.3)
(0.5)
Non-GAAP G&A
$
430.6
$
415.1
3.7%
Non-GAAP G&A as a % of total net
revenues (4)
6.1
%
6.3
%
Operating income, as reported (GAAP)
$
1,219.8
$
1,015.7
20.1%
Restructuring, impairment and optimization
costs (1)
7.1
48.8
International transaction and
integration-related items (2)
58.9
60.3
2018 U.S. stock award (3)
—
23.1
Nestlé transaction and integration-related
costs
5.6
5.8
Non-GAAP operating income
$
1,291.4
$
1,153.7
11.9%
Operating margin, as reported (GAAP)
17.2
%
15.3
%
190 bps
Restructuring, impairment and optimization
costs (1)
0.1
0.7
International transaction and
integration-related items (2)
0.8
0.9
2018 U.S. stock award (3)
—
0.4
Nestlé transaction and integration-related
costs
0.1
0.1
Non-GAAP operating margin
18.2
%
17.4
%
80 bps
Diluted net earnings per share, as
reported (GAAP)
$
0.74
$
0.61
21.3%
Restructuring, impairment and optimization
costs (1)
0.01
0.04
International transaction and
integration-related items (2)
0.05
0.05
2018 U.S. stock award (3)
—
0.02
Nestlé transaction and integration-related
costs
0.01
—
Other tax matters (5)
—
0.06
Income tax effect on Non-GAAP adjustments
(6)
(0.02)
(0.03)
Non-GAAP EPS
$
0.79
$
0.75
5.3%
(1)
Represents costs associated with our
restructuring efforts, primarily severance and asset impairments
related to certain company-operated store closures, as well as
business process optimization costs, largely consulting fees.
(2)
Includes transaction costs for the
acquisition of our East China joint venture and the divestitures of
our Taiwan joint venture; 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 incremental stock-based
compensation award for U.S. partners (employees).
(4)
Non-GAAP G&A as a percentage of total
net revenues for the first quarter of fiscal 2020 was 6.1%.
Non-GAAP G&A as a percentage of total net revenues for fiscal
years 2019 and 2018 was 6.5% and 6.4%, respectively. Refer to the
Starbucks Investor Relations website for additional information
regarding historical non-GAAP information.
(5)
Represents the estimated impact of the
U.S. Tax Cuts and Jobs Act, specifically the transition tax on
undistributed foreign earnings, estimated incremental foreign
withholding taxes on expected repatriated earnings and the
re-measurement of deferred taxes.
(6)
Adjustments were determined based on the
nature of the underlying items and their relevant jurisdictional
tax rates.
Q1 QTD FY20 NON-GAAP
DISCLOSURE DETAILS
(Pretax $ in millions and
USD)
Q1 QTD FY20
Americas
International
Channel Development
Corporate and Other
Consolidated
Statement of Earnings Line Item
Restructuring, Impairment and
Optimization Costs
International Transaction and
Integration Costs
Restructuring, Impairment and
Optimization Costs
Nestlé Transaction and
Integration-Related Costs
International Transaction and
Integration Costs
Nestlé Transaction and
Integration-Related Costs
Restructuring, Impairment
& Optimization Costs
Total Non-GAAP
Adjustment
Net revenue
Cost of sales
Store operating expenses
3.3
3.3
Other operating expenses
5.3
5.3
Depreciation and amortization expenses
53.1
53.1
General and administrative expenses
2.4
0.7
0.1
0.3
0.1
3.6
Restructuring and impairments
5.2
0.8
0.3
6.3
Income from equity investees
Total impact to operating income
(5.2
)
(58.8
)
(1.5
)
(5.3
)
(0.1
)
(0.3
)
(0.4
)
(71.6
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200128005762/en/
Starbucks Contact, Investor Relations: Durga Doraisamy
206-318-7118 investorrelations@starbucks.com
Starbucks Contact, Media: Reggie Borges 206-318-7100
press@starbucks.com
Starbucks (NASDAQ:SBUX)
Historical Stock Chart
From Jun 2024 to Jul 2024
Starbucks (NASDAQ:SBUX)
Historical Stock Chart
From Jul 2023 to Jul 2024