EX-99.1 2 sbux-9292013xexhibit991.htm EXHIBIT 99.1 SBUX - 9.29.2013 - Exhibit 99.1


Exhibit 99.1
Starbucks Q4 EPS Rises 37% to a Record $0.63 Per Share
Revenue grows 13% to $3.8 billion with continued strong comp growth of 8% in the Americas and 7% globally
Margins expand in all segments; consolidated operating margin reaches record 17.6%
Board increases quarterly cash dividend 24% on strong performance and robust outlook

SEATTLE; October 30, 2013 – Starbucks Corporation (NASDAQ: SBUX) today reported financial results for its 13-week fiscal fourth quarter and 52-week fiscal year ended September 29, 2013.

Q4 Fiscal 2013 Highlights:
Total net revenues increased 13% to $3.8 billion
Global comparable store sales grew 7% driven by a 5% increase in traffic
8% comp growth in the Americas and the U.S.
2% comp growth in EMEA
8% comp growth in China/Asia Pacific
Consolidated operating income increased 29% to $669 million
Consolidated operating margin expanded 220 basis points to 17.6%
Earnings per share increased 37% to $0.63 per share, including a $0.03 non-routine gain on the sale of Starbucks equity in Chile and Argentina joint ventures
Opened 558 net new stores in the quarter, including the 1,000th store in both China and Japan
The Board of Directors declared a cash dividend of $0.26 per share, an increase of 24%

Fiscal Year 2013 Highlights:
Total net revenues increased 12% to $14.9 billion
Global comparable store sales grew 7%, driven by a 5% increase in traffic
7% comp growth in the Americas, driven by 8% comp growth in the U.S.
Comp sales flat in EMEA, traffic increased 2%
9% comp growth in China/Asia Pacific, driven by a 7% increase in traffic
Consolidated operating income increased 23% to $2.5 billion
Consolidated operating margin expanded 150 basis points to a record 16.5%
Earnings per share increased 26% to $2.26 per share, including non-routine gains of $0.03 in Q2 and $0.03 in Q4 on the sale of Starbucks equity in Mexico, Chile and Argentina joint ventures
Opened 1,701 net new stores in the year; ended fiscal 2013 with 19,767 stores globally
Returned $1.2 billion to shareholders through dividend payments and share repurchases


“The fourth quarter of fiscal 2013 capped off by far the best year in Starbucks 42-year-history,” said Howard Schultz, chairman, president and ceo of Starbucks Coffee Company. “Our results were driven by disciplined, ongoing efforts to elevate the value and relevance of the Starbucks brand, continued innovation and the success of our efforts to deepen our connection to customers and communities around the world.”

“Today Starbucks announced incredible fourth quarter results in what has been a truly outstanding year,” said Troy Alstead, cfo and group president. “Outstanding global sales growth combined with record earnings and operating margin demonstrate the fundamental health of our business model and our continued ability to successfully execute on new initiatives while maintaining financial discipline. The strong momentum of the fourth quarter gives us further confidence in our robust outlook for fiscal 2014.”


- more -

2

Fourth Quarter Fiscal 2013 Summary
 
Quarter Ended Sep 29, 2013
Comparable Store Sales(1)
Sales Growth
 
Change in Transactions
 
Change in Ticket
Consolidated
7%
 
5%
 
2%
Americas
8%
 
5%
 
3%
United States
8%
 
5%
 
3%
EMEA
2%
 
3%
 
(1)%
CAP
8%
 
6%
 
2%
(1) Includes only Starbucks company-operated stores open 13 months or longer.

Operating Results
Quarter Ended
 
 
($ in millions, except per share amounts)
Sep 29, 2013
 
Sep 30, 2012
 
Change
Net New Stores
558
 
415
 
143
Revenues
$3,795.0
 
$3,364.2
 
13%
Operating Income
$668.9
 
$519.6
 
29%
Operating Margin
17.6%
 
15.4%
 
220 bps
EPS
$0.63
 
$0.46
 
37%

Consolidated net revenues were $3.8 billion in Q4 FY13, an increase of 13% over Q4 FY12. The increase was primarily driven by 7% growth in global comparable store sales and incremental revenues from 1,701 net new store openings over the past 12 months.

Consolidated operating income increased 29% to $668.9 million, compared to $519.6 million for the same period a year ago. Operating margin of 17.6% expanded 220 basis points compared to the prior year quarter, primarily driven by sales leverage, store portfolio optimization in Europe and lower commodity costs.


Q4 Americas Segment Results
 
 
 
 
 
 
 
Quarter Ended
 
 
($ in millions)
Sep 29, 2013
 
Sep 30, 2012
 
Change
Net New Stores(1)
340
 
256
 
84
Revenues
$2,779.5
 
$2,511.7
 
11%
Operating Income
$605.9
 
$523.6
 
16%
Operating Margin
21.8%
 
20.8%
 
100 bps
(1) Americas store data has been adjusted to exclude Seattle's Best Coffee and Evolution Fresh, which are now reported within All Other Segments.

Net revenues for the Americas segment were $2.8 billion in Q4 FY13, an increase of 11% over Q4 FY12. The increase was primarily due to an 8% increase in comparable store sales. Also contributing to the net revenue increase was incremental revenue from 680 net new store openings over the past 12 months.

Operating income increased to $605.9 million in Q4 FY13, growth of 16% compared to $523.6 million for the same period a year ago. Operating margin of 21.8% expanded 100 basis points compared to the prior year quarter and was primarily driven by sales leverage.


- more -

3

Q4 EMEA Segment Results
 
 
 
 
 
 
 
Quarter Ended
 
 
($ in millions)
Sep 29, 2013
 
Sep 30, 2012
 
Change
Net New Stores
28
 
33
 
(5)
Revenues
$293.4
 
$283.7
 
3%
Operating Income (Loss)
$27.3
 
($6.7)
 
nm
Operating Margin
9.3%
 
(2.4)%
 
1,170 bps

Net revenues for the EMEA segment were $293.4 million in Q4 FY13, an increase of 3% over Q4 FY12. The increase was due to licensed stores revenue growth of 26%, primarily driven by the opening of 129 net new stores in the last 12 months. A 2% increase in comparable store sales also contributed to the net revenue increase.

Operating income increased to $27.3 million in Q4 FY13, from a loss of $6.7 million in the prior year quarter. Operating margin expanded 1,170 basis points to 9.3%, primarily driven by lower costs related to store portfolio optimization activities that began in Q4 of the prior year.

Q4 China/Asia Pacific Segment Results
 
 
 
 
 
 
 
Quarter Ended
 
 
($ in millions)
Sep 29, 2013
 
Sep 30, 2012
 
Change
Net New Stores
197
 
132
 
65
Revenues
$255.7
 
$198.0
 
29%
Operating Income
$96.0
 
$65.6
 
46%
Operating Margin
37.5%
 
33.1%
 
440 bps

Net revenues for the China/Asia Pacific segment were $255.7 million in Q4 FY13, an increase of 29% over Q4 FY12. The increase was primarily due to incremental revenue from 588 net new store openings over the past 12 months. An 8% increase in comparable store sales also contributed to the net revenue increase.

Operating income of $96.0 million in Q4 FY13 increased 46% compared to the same period a year ago. Operating margin expanded 440 basis points to 37.5% this quarter compared to 33.1% in Q4 FY12. The margin expansion was primarily driven by sales leverage and lower operating costs, as well as a reduction to the estimated asset retirement obligations of our store leases in the region.

Q4 Channel Development Segment Results
 
 
 
 
 
 
 
Quarter Ended
 
 
($ in millions)
Sep 29, 2013
 
Sep 30, 2012
 
Change
Revenues
$360.9
 
$318.5
 
13%
Operating Income
$128.4
 
$98.9
 
30%
Operating Margin
35.6%
 
31.1%
 
450 bps

Net revenues for the Channel Development segment were $360.9 million in Q4 FY13, an increase of 13% over Q4 FY12. The increase was primarily driven by increased sales of premium single serve products. Foodservice revenue growth of 13% also contributed to the increase.

Operating income grew 30% to $128.4 million in Q4 FY13 compared to $98.9 million for the same period a year ago. Operating margin increased 450 basis points to 35.6% in Q4 FY13 compared to the prior year period. The margin expansion was primarily due to lower coffee costs and sales leverage.


- more -

4

Q4 All Other Segments Results
 
 
 
 
 
 
 
Quarter Ended
 
 
($ in millions)
Sep 29, 2013
 
Sep 30, 2012
 
Change
Net New Stores
(7)
 
(6)
 
(1)
Revenues
$105.5
 
$52.3
 
102%
Operating loss
($16.5)
 
($8.6)
 
92%

Net revenues for All Other Segments were $105.5 million in Q4 FY13, an increase of 102% over Q4 FY12, primarily driven by the addition of Teavana retail store sales beginning in Q2 of FY13.

Q4 FY13 operating loss was $16.5 million compared to a loss of $8.6 million in Q4 FY12. The increased operating loss was driven by investment spending on emerging brands.


Full Year Financial Results

 
Year Ended Sep 29, 2013
Comparable Store Sales(1)
Sales Growth
 
Change in Transactions
 
Change in Ticket
Consolidated
7%
 
5%
 
2%
Americas
7%
 
5%
 
2%
United States
8%
 
5%
 
2%
EMEA
0%
 
2%
 
(2)%
CAP
9%
 
7%
 
2%
(1) Includes only Starbucks company-operated stores open 13 months or longer.

Operating Results
Year Ended
 
 
($ in millions, except per share amounts)
Sep 29, 2013
 
Sep 30, 2012
 
Change
Net New Stores(1)
1,701
 
1,063
 
638
Revenues
$14,892.2
 
$13,299.5
 
12%
Operating Income
$2,458.7
 
$1,997.4
 
23%
Operating Margin
16.5%
 
15.0%
 
150 bps
EPS
$2.26
 
$1.79
 
26%
(1) Includes 366 Teavana stores added in fiscal 2013.


- more -

5

Fiscal 2014 Targets
The company updates and reaffirms the following fiscal 2014 targets:

Revenue growth of 10% or greater
Global comparable store sales growth in the mid single digits
Consolidated operating margin improvement of approximately 150 to 200 basis points over FY13:
Americas: moderate improvement over FY13
EMEA: operating margin improving toward the high single digits
CAP: operating margin percentage moving toward the low 30's
Channel Development: modest improvement over FY13
Consolidated tax rate of approximately 34.5%
Earnings per share in the range of $2.55 to $2.65:
Q1 EPS in the range of $0.67 to $0.69
Q2 EPS in the range of $0.54 to $0.55
Approximately 1,500 net new stores now expected:
Americas: approximately 600
EMEA: increased to approximately 150
CAP: increased to approximately 750
Capital expenditures of approximately $1.2 billion

Company Updates
Starbucks long-term business partner Alsea, S.A.B. de C.V., acquired Starbucks 82% equity in Chile and its 18% equity in Argentina in the quarter and assumed full operational responsibilities for the 118 stores across both markets.
The company announced its intent to open its first store in Colombia in 2014, a joint venture between Starbucks two business partners in the Latin America region - Alsea and Grupo Nutresa.
On October 23, almost one year after its acquisition of Teavana, Starbucks opened the first-of-its-kind Teavana Fine Teas + Tea Bar in New York City’s Upper East Side. The Tea Bar elevates the premium tea experience by delivering an assortment of handcrafted tea beverages, premium loose leaf teas, tea-inspired food offerings and tea merchandise.
The company raised $750 million in proceeds in September from a public offering of 3.85% senior notes due 2023. The company plans to use the net proceeds for general corporate purposes.
Starbucks continued the rollout of La Boulange™ bakery products in Starbucks stores by launching in Phoenix, Chicago, Boston and New York City in Q4, bringing the total number of Starbucks stores that carry La Boulange™ products to nearly 3,300 at the end of fiscal 2013.
The company opened a state-of-the-art juicery that will quadruple production of cold-pressed Evolution Fresh™ juice and allows the brand to significantly increase innovation and distribution capacity.
The Board of Directors declared a cash dividend of $0.26 per share, payable on November 29, 2013 to shareholders of record as of November 14, 2013. The company also increased its targeted payout ratio to 35% to 45%, demonstrating an ongoing commitment to increasing returns to its shareholders.
The company repurchased 10.8 million shares of common stock in fiscal 2013; approximately 26 million shares remain available for purchase under previous authorizations.


Conference Call

Starbucks will be holding a conference call today at 2:00 p.m. Pacific Time, which will be hosted by Howard Schultz, chairman, president and ceo, Troy Alstead, cfo and group president, and John Culver, group president, China/Asia Pacific and Channel Development and Emerging Brands. The call will be webcast and can be accessed at http://investor.starbucks.com. A replay of the webcast will be available through approximately 9:00 p.m. Pacific Time on Friday, November 29, 2013. A replay of the call will also be available via telephone through 9:00 p.m. Pacific Time on Saturday, November 2, 2013 by calling 1-855-859-2056, reservation number 22399523.

The company’s consolidated statements of earnings, operating segment results, and other additional information have been provided on the following pages in accordance with current year classifications. This information should be reviewed in conjunction with this press release. Please refer to the company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2012 for additional information.


- more -

6


About Starbucks

Since 1971, Starbucks Coffee Company has been committed to ethically sourcing and roasting the highest quality arabica coffee in the world. 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 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, health and potential of our business, operations and brand, business momentum, growth and growth opportunities, earnings per share, dividend payout ratios, revenues, operating margins, profits, capital expenditures, tax rates, comparable store sales and store openings and closings. 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, coffee, dairy and other raw material prices and availability, costs associated with, and the successful execution of, the company's initiatives, strategies and plans, the acceptance of the company's products by our customers, fluctuations in U.S. and international economies and currencies, the impact of competition, the effect of legal proceedings, and other risks detailed in the company filings with the Securities and Exchange Commission, including the “Risk Factors” section of Starbucks Annual Report on Form 10-K for the fiscal year ended September 30, 2012.  The company assumes no obligation to update any of these forward-looking statements.




Contacts:
Starbucks Contact, Investor Relations:
 
Starbucks Contact, Media:
JoAnn DeGrande / Greg Smith
 
Jim Olson
206-318-7118
 
206-318-7100
investorrelations@starbucks.com
 
press@starbucks.com



- more -

7

STARBUCKS CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited, in millions, except per share data)
 
 
Quarter Ended
 
Quarter Ended
 
 
Sep 29,
2013
 
Sep 30,
2012
 
%
Change
 
Sep 29,
2013
 
Sep 30,
2012
 
 
 
 
 
 
 
 
 
As a % of total
net revenues
 
Net revenues:
 
 
 
 
 
 
 
 
 
 
Company-operated stores
$
3,009.6

 
$
2,665.9

 
12.9
 %
 
79.3
 %
 
79.2
 %
 
Licensed stores
346.3

 
305.3

 
13.4

 
9.1

 
9.1

 
CPG, foodservice and other
439.1

 
393.0

 
11.7

 
11.6

 
11.7

 
Total net revenues
3,795.0

 
3,364.2

 
12.8

 
100.0

 
100.0

 
Cost of sales including occupancy costs
1,633.7

 
1,459.2

 
12.0

 
43.0

 
43.4

 
Store operating expenses
1,073.9

 
989.9

 
8.5

 
28.3

 
29.4

 
Other operating expenses
107.3

 
111.9

 
(4.1
)
 
2.8

 
3.3

 
Depreciation and amortization expenses
166.1

 
141.7

 
17.2

 
4.4

 
4.2

 
General and administrative expenses
226.1

 
203.8

 
10.9

 
6.0

 
6.1

 
Total operating expenses
3,207.1

 
2,906.5

 
10.3

 
84.5

 
86.4

 
Income from equity investees
81.0

 
61.9

 
30.9

 
2.1

 
1.8

 
Operating income
668.9

 
519.6

 
28.7

 
17.6

 
15.4

 
Interest income and other, net
72.1

 
26.3

 
174.1

 
1.9

 
0.8

 
Interest expense
(9.1
)
 
(6.4
)
 
42.2

 
(0.2
)
 
(0.2
)
 
Earnings before income taxes
731.9

 
539.5

 
35.7

 
19.3

 
16.0

 
Income taxes
250.9

 
180.2

 
39.2

 
6.6

 
5.4

 
Net earnings including noncontrolling interests
481.0

 
359.3

 
33.9

 
12.7

 
10.7

 
Net earnings attributable to noncontrolling interests
(0.1
)
 
0.3

 
nm

 

 

 
Net earnings attributable to Starbucks
$
481.1

 
$
359.0

 
34.0
 %
 
12.7
 %
 
10.7
 %
 
 
 
 
 
 
 
 
 
 
 
 
Net earnings per common share - diluted
$
0.63

 
$
0.46

 
37.0
 %
 
 
 
 
 
Weighted avg. shares outstanding - diluted
764.5

 
773.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash dividends declared per share
$
0.26

 
$
0.21

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Supplemental Ratios:
 
 
 
 
 
 
 
 
 
 
Store operating expenses as a percentage of company-operated stores revenue
 
 
 
 
 
 
35.7
 %
 
37.1
 %
 
Effective tax rate including noncontrolling interest
 
 
 
 
 
 
34.3
 %
 
33.4
 %


- more -

8


STARBUCKS CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited, in millions, except per share data)
 
 
Year Ended
 
Year Ended
 
 
Sep 29,
2013
 
Sep 30,
2012
 
%
Change
 
Sep 29,
2013
 
Sep 30,
2012
 
 
 
 
 
 
 
 
 
As a % of total
net revenues
 
Net revenues:
 
 
 
 
 
 
 
 
 
 
Company-operated stores
$
11,793.2

 
$
10,534.5

 
11.9
 %
 
79.2
 %
 
79.2
 %
 
Licensed stores
1,360.5

 
1,210.3

 
12.4

 
9.1

 
9.1

 
CPG, foodservice and other
1,738.5

 
1,554.7

 
11.8

 
11.7

 
11.7

 
Total net revenues
14,892.2

 
13,299.5

 
12.0

 
100.0

 
100.0

 
Cost of sales including occupancy costs
6,382.3

 
5,813.3

 
9.8

 
42.9

 
43.7

 
Store operating expenses
4,286.1

 
3,918.1

 
9.4

 
28.8

 
29.5

 
Other operating expenses
457.2

 
429.9

 
6.4

 
3.1

 
3.2

 
Depreciation and amortization expenses
621.4

 
550.3

 
12.9

 
4.2

 
4.1

 
General and administrative expenses
937.9

 
801.2

 
17.1

 
6.3

 
6.0

 
Total operating expenses
12,684.9

 
11,512.8

 
10.2

 
85.2

 
86.6

 
Income from equity investees
251.4

 
210.7

 
19.3

 
1.7

 
1.6

 
Operating income
2,458.7

 
1,997.4

 
23.1

 
16.5

 
15.0

 
Interest income and other, net
123.6

 
94.4

 
30.9

 
0.8

 
0.7

 
Interest expense
(28.1
)
 
(32.7
)
 
(14.1
)
 
(0.2
)
 
(0.2
)
 
Earnings before income taxes
2,554.2

 
2,059.1

 
24.0

 
17.2

 
15.5

 
Income taxes
832.3

 
674.4

 
23.4

 
5.6

 
5.1

 
Net earnings including noncontrolling interests
1,721.9

 
1,384.7

 
24.4

 
11.6

 
10.4

 
Net earnings attributable to noncontrolling interests
0.5

 
0.9

 
(44.4
)
 

 

 
Net earnings attributable to Starbucks
$
1,721.4

 
$
1,383.8

 
24.4
 %
 
11.6
 %
 
10.4
 %
 
 
 
 
 
 
 
 
 
 
 
 
Net earnings per common share - diluted
$
2.26

 
$
1.79

 
26.3
 %
 
 
 
 
 
Weighted avg. shares outstanding - diluted
762.3

 
773.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash dividends declared per share
$
0.89

 
$
0.72

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Supplemental Ratios:
 
 
 
 
 
 
 
 
 
 
Store operating expenses as a percentage of company-operated stores revenue
 
 
 
 
 
 
36.3
 %
 
37.2
 %
 
Effective tax rate including noncontrolling interest
 
 
 
 
 
 
32.6
 %
 
32.8
 %

- more -

9

Segment Results

The tables below present reportable segment results net of intersegment eliminations (in millions):

Americas
 
 
Sep 29,
2013
 
Sep 30,
2012
 
%
Change
 
Sep 29,
2013
 
Sep 30,
2012
 
 
Quarter Ended
 
 
 
 
 
 
As a % of Americas
total net revenues
 
Net revenues:
 
 
 
 
 
 
 
 
 
 
Company-operated stores
$
2,538.7

 
$
2,294.2

 
10.7
 %
 
91.3
%
 
91.3
%
 
Licensed stores
231.0

 
202.2

 
14.2

 
8.3

 
8.1

 
CPG, foodservice and other
9.8

 
15.3

 
(35.9
)
 
0.4

 
0.6

 
Total net revenues
2,779.5

 
2,511.7

 
10.7

 
100.0

 
100.0

 
Cost of sales including occupancy costs
1,071.3

 
972.0

 
10.2

 
38.5

 
38.7

 
Store operating expenses
923.6

 
857.6

 
7.7

 
33.2

 
34.1

 
Other operating expenses
22.8

 
24.4

 
(6.6
)
 
0.8

 
1.0

 
Depreciation and amortization expenses
113.1

 
100.9

 
12.1

 
4.1

 
4.0

 
General and administrative expenses
42.8

 
33.2

 
28.9

 
1.5

 
1.3

 
Total operating expenses
2,173.6

 
1,988.1

 
9.3

 
78.2

 
79.2

 
Operating income
$
605.9

 
$
523.6

 
15.7
 %
 
21.8
%
 
20.8
%
 
Supplemental Ratios:
 
 
 
 
 
 
 
 
 
 
Store operating expenses as a percentage of company-operated stores revenue
 
 
 
 
 
 
36.4
%
 
37.4
%
 
 
 
 
 
 
 
 
 
 
 
 
Year Ended
 
 
 
 
 
 
 
 
 
 
Net revenues:
 
 
 
 
 
 
 
 
 
 
Company-operated stores
$
10,038.3

 
$
9,077.0

 
10.6
 %
 
91.3
%
 
91.4
%
 
Licensed stores
915.4

 
825.8

 
10.9

 
8.3

 
8.3

 
CPG, foodservice and other
47.1

 
33.2

 
41.9

 
0.4

 
0.3

 
Total net revenues
11,000.8

 
9,936.0

 
10.7

 
100.0

 
100.0

 
Cost of sales including occupancy costs
4,214.9

 
3,885.5

 
8.5

 
38.3

 
39.1

 
Store operating expenses
3,710.2

 
3,427.8

 
8.2

 
33.7

 
34.5

 
Other operating expenses
96.9

 
83.8

 
15.6

 
0.9

 
0.8

 
Depreciation and amortization expenses
429.3

 
392.4

 
9.4

 
3.9

 
3.9

 
General and administrative expenses
186.7

 
128.2

 
45.6

 
1.7

 
1.3

 
Total operating expenses
8,638.0

 
7,917.7

 
9.1

 
78.5

 
79.7

 
Income from equity investees
2.4

 
2.1

 
14.3

 

 

 
Operating income
$
2,365.2

 
$
2,020.4

 
17.1
 %
 
21.5
%
 
20.3
%
 
Supplemental Ratios:
 
 
 
 
 
 
 
 
 
 
Store operating expenses as a percentage of company-operated stores revenue
 
 
 
 
 
 
37.0
%
 
37.8
%



- more -

10

EMEA
 
 
Sep 29,
2013
 
Sep 30,
2012
 
%
Change
 
Sep 29,
2013
 
Sep 30,
2012
 
 
Quarter Ended
 
 
 
 
 
 
As a % of EMEA
total net revenues
 
Net revenues:
 
 
 
 
 
 
 
 
 
 
Company-operated stores
$
232.9

 
$
233.2

 
(0.1
)%
 
79.4
%
 
82.2
 %
 
Licensed stores
50.8

 
40.4

 
25.7

 
17.3

 
14.2

 
CPG, foodservice and other
9.7

 
10.1

 
(4.0
)
 
3.3

 
3.6

 
Total net revenues
293.4

 
283.7

 
3.4

 
100.0

 
100.0

 
Cost of sales including occupancy costs
150.1

 
153.2

 
(2.0
)
 
51.2

 
54.0

 
Store operating expenses
80.1

 
97.1

 
(17.5
)
 
27.3

 
34.2

 
Other operating expenses
9.5

 
7.6

 
25.0

 
3.2

 
2.7

 
Depreciation and amortization expenses
13.9

 
14.2

 
(2.1
)
 
4.7

 
5.0

 
General and administrative expenses
12.9

 
18.3

 
(29.5
)
 
4.4

 
6.5

 
Total operating expenses
266.5

 
290.4

 
(8.2
)
 
90.8

 
102.4

 
Income from equity investees
0.4

 

 
nm

 
0.1

 

 
Operating income
$
27.3

 
$
(6.7
)
 
nm

 
9.3
%
 
(2.4
)%
 
Supplemental Ratios:
 
 
 
 
 
 
 
 
 
 
Store operating expenses as a percentage of company-operated stores revenue
 
 
 
 
 
 
34.4
%
 
41.6
 %
 
 
 
 
 
 
 
 
 
 
 
 
Year Ended
 
 
 
 
 
 
 
 
 
 
Net revenues:
 
 
 
 
 
 
 
 
 
 
Company-operated stores
$
932.8

 
$
968.3

 
(3.7
)%
 
80.4
%
 
84.8
 %
 
Licensed stores
190.3

 
139.5

 
36.4

 
16.4

 
12.2

 
CPG, foodservice and other
36.9

 
33.5

 
10.1

 
3.2

 
2.9

 
Total net revenues
1,160.0

 
1,141.3

 
1.6

 
100.0

 
100.0

 
Cost of sales including occupancy costs
590.9

 
597.3

 
(1.1
)
 
50.9

 
52.3

 
Store operating expenses
339.4

 
371.1

 
(8.5
)
 
29.3

 
32.5

 
Other operating expenses
38.5

 
33.6

 
14.6

 
3.3

 
2.9

 
Depreciation and amortization expenses
55.5

 
57.1

 
(2.8
)
 
4.8

 
5.0

 
General and administrative expenses
71.9

 
75.7

 
(5.0
)
 
6.2

 
6.6

 
Total operating expenses
1,096.2

 
1,134.8

 
(3.4
)
 
94.5

 
99.4

 
Income from equity investees
0.4

 
0.3

 
33.3

 

 

 
Operating income
$
64.2

 
$
6.8

 
844.1
 %
 
5.5
%
 
0.6
 %
 
Supplemental Ratios:
 
 
 
 
 
 
 
 
 
 
Store operating expenses as a percentage of company-operated stores revenue
 
 
 
 
 
 
36.4
%
 
38.3
 %



- more -

11

China / Asia Pacific (CAP)
 
 
Sep 29,
2013
 
Sep 30,
2012
 
%
Change
 
Sep 29,
2013
 
Sep 30,
2012
 
 
Quarter Ended
 
 
 
 
 
 
As a % of CAP
total net revenues
 
Net revenues:
 
 
 
 
 
 
 
 
 
 
Company-operated stores
$
193.2

 
$
138.5

 
39.5
 %
 
75.6
%
 
69.9
%
 
Licensed stores
62.5

 
59.5

 
5.0

 
24.4

 
30.1

 
Total net revenues
255.7

 
198.0

 
29.1

 
100.0

 
100.0

 
Cost of sales including occupancy costs
125.6

 
100.1

 
25.5

 
49.1

 
50.6

 
Store operating expenses
48.2

 
35.2

 
36.9

 
18.9

 
17.8

 
Other operating expenses
12.4

 
14.6

 
(15.1
)
 
4.8

 
7.4

 
Depreciation and amortization expenses
9.3

 
6.7

 
38.8

 
3.6

 
3.4

 
General and administrative expenses
10.9

 
7.6

 
43.4

 
4.3

 
3.8

 
Total operating expenses
206.4

 
164.2

 
25.7

 
80.7

 
82.9

 
Income from equity investees
46.7

 
31.8

 
46.9

 
18.3

 
16.1

 
Operating income
$
96.0

 
$
65.6

 
46.3
 %
 
37.5
%
 
33.1
%
 
Supplemental Ratios:
 
 
 
 
 
 
 
 
 
 
Store operating expenses as a percentage of company-operated stores revenue
 
 
 
 
 
 
24.9
%
 
25.4
%
 
 
 
 
 
 
 
 
 
 
 
 
Year Ended
 
 
 
 
 
 
 
 
 
 
Net revenues:
 
 
 
 
 
 
 
 
 
 
Company-operated stores
$
671.7

 
$
489.2

 
37.3
 %
 
73.2
%
 
67.8
%
 
Licensed stores
245.3

 
232.2

 
5.6

 
26.8

 
32.2

 
Total net revenues
917.0

 
721.4

 
27.1

 
100.0

 
100.0

 
Cost of sales including occupancy costs
449.5

 
362.8

 
23.9

 
49.0

 
50.3

 
Store operating expenses
170.0

 
119.2

 
42.6

 
18.5

 
16.5

 
Other operating expenses
46.1

 
47.0

 
(1.9
)
 
5.0

 
6.5

 
Depreciation and amortization expenses
33.8

 
23.2

 
45.7

 
3.7

 
3.2

 
General and administrative expenses
48.4

 
39.0

 
24.1

 
5.3

 
5.4

 
Total operating expenses
747.8

 
591.2

 
26.5

 
81.5

 
82.0

 
Income from equity investees
152.0

 
122.4

 
24.2

 
16.6

 
17.0

 
Operating income
$
321.2

 
$
252.6

 
27.2
 %
 
35.0
%
 
35.0
%
 
Supplemental Ratios:
 
 
 
 
 
 
 
 
 
 
Store operating expenses as a percentage of company-operated stores revenue
 
 
 
 
 
 
25.3
%
 
24.4
%



- more -

12

Channel Development
 
 
Sep 29,
2013
 
Sep 30,
2012
 
%
Change
 
Sep 29,
2013
 
Sep 30,
2012
 
 
Quarter Ended
 
 
 
 
 
 
As a % of
Channel Development
total net revenues
 
Net revenues:
 
 
 
 
 
 
 
 
 
 
CPG
$
266.2

 
$
235.0

 
13.3
 %
 
73.8
%
 
73.8
%
 
Foodservice
94.7

 
83.5

 
13.4

 
26.2

 
26.2

 
Total net revenues
360.9

 
318.5

 
13.3

 
100.0

 
100.0

 
Cost of sales
217.5

 
201.2

 
8.1

 
60.3

 
63.2

 
Other operating expenses
44.4

 
43.8

 
1.4

 
12.3

 
13.8

 
Depreciation and amortization expenses
0.2

 
0.3

 
(33.3
)
 
0.1

 
0.1

 
General and administrative expenses
4.3

 
4.1

 
4.9

 
1.2

 
1.3

 
Total operating expenses
266.4

 
249.4

 
6.8

 
73.8

 
78.3

 
Income from equity investees
33.9

 
29.8

 
13.8

 
9.4

 
9.4

 
Operating income
$
128.4

 
$
98.9

 
29.8
 %
 
35.6
%
 
31.1
%
 
 
 
 
 
 
 
 
 
 
 
 
Year Ended
 
 
 
 
 
 
 
 
 
 
Net revenues:
 
 
 
 
 
 
 
 
 
 
CPG
$
1,056.0

 
$
952.1

 
10.9
 %
 
74.3
%
 
73.7
%
 
Foodservice
364.7

 
340.1

 
7.2

 
25.7

 
26.3

 
Total net revenues
1,420.7

 
1,292.2

 
9.9

 
100.0

 
100.0

 
Cost of sales
878.4

 
827.6

 
6.1

 
61.8

 
64.0

 
Other operating expenses
201.2

 
191.1

 
5.3

 
14.2

 
14.8

 
Depreciation and amortization expenses
1.1

 
1.3

 
(15.4
)
 
0.1

 
0.1

 
General and administrative expenses
21.1

 
17.0

 
24.1

 
1.5

 
1.3

 
Total operating expenses
1,101.8

 
1,037.0

 
6.2

 
77.6

 
80.3

 
Income from equity investees
96.6

 
85.2

 
13.4

 
6.8

 
6.6

 
Operating income
$
415.5

 
$
340.4

 
22.1
 %
 
29.2
%
 
26.3
%



- more -

13

All Other Segments
 
Sep 29,
2013
 
Sep 30,
2012
 
%
Change
 
Quarter Ended
 
 
 
 
 
Net revenues:
 
 
 
 
 
Company-operated stores
$
44.8

 
$

 
nm

Licensed stores
2.0

 
3.2

 
(37.5
)
CPG, foodservice and other
58.7

 
49.1

 
19.6

Total net revenues
105.5

 
52.3

 
101.7

Cost of sales including occupancy costs
67.3

 
33.5

 
100.9

Store operating expenses
22.0

 

 
nm

Other operating expenses
18.7

 
21.6

 
(13.4
)
Depreciation and amortization expenses
3.9

 
0.8

 
387.5

General and administrative expenses
10.1

 
5.3

 
90.6

Total operating expenses
122.0

 
61.2

 
99.3

Income from equity investees

 
0.3

 
(100.0
)
Operating loss
$
(16.5
)
 
$
(8.6
)
 
91.9
 %
 
 
 
 
 
 
Year Ended
 
 
 
 
 
Net revenues:
 
 
 
 
 
Company-operated stores
$
150.4

 
$

 
nm

Licensed stores
9.5

 
12.8

 
(25.8
)
CPG, foodservice and other
233.8

 
195.8

 
19.4

Total net revenues
393.7

 
208.6

 
88.7

Cost of sales including occupancy costs
239.8

 
140.1

 
71.2

Store operating expenses
66.5

 

 
nm

Other operating expenses
75.3

 
74.4

 
1.2

Depreciation and amortization expenses
11.7

 
2.5

 
368.0

General and administrative expenses
34.9

 
19.7

 
77.2

Total operating expenses
428.2

 
236.7

 
80.9

Income from equity investees

 
0.7

 
(100.0
)
Operating loss
$
(34.5
)
 
$
(27.4
)
 
25.9
 %




- more -

14

STARBUCKS CORPORATION
CONSOLIDATED BALANCE SHEETS
(in millions, except per share data)
(unaudited)
 
 
Sep 29,
2013
 
Sep 30,
2012
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
2,575.7

 
$
1,188.6

Short-term investments
658.1

 
848.4

Accounts receivable, net
561.4

 
485.9

Inventories
1,111.2

 
1,241.5

Prepaid expenses and other current assets
287.7

 
196.5

Deferred income taxes, net
214.8

 
238.7

Total current assets
5,408.9

 
4,199.6

Long-term investments
58.3

 
116.0

Equity and cost investments
496.5

 
459.9

Property, plant and equipment, net
3,200.5

 
2,658.9

Other assets
202.1

 
242.0

Other intangible assets
274.8

 
143.7

Goodwill
862.9

 
399.1

TOTAL ASSETS
$
10,504.0

 
$
8,219.2

LIABILITIES AND EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
491.7

 
$
398.1

Accrued liabilities
1,270.8

 
1,133.8

Insurance reserves
178.5

 
167.7

Deferred revenue
653.7

 
510.2

Total current liabilities
2,594.7

 
2,209.8

Long-term debt
1,299.4

 
549.6

Other long-term liabilities
414.4

 
345.3

Total liabilities
4,308.5

 
3,104.7

Shareholders’ equity:
 
 
 
Common stock ($0.001 par value) — authorized, 1,200.0 shares; issued and outstanding, 753.2 shares and 749.3 shares (includes 3.4 common stock units), respectively
0.8

 
0.7

Additional paid-in capital
282.1

 
39.4

Retained earnings
5,843.5

 
5,046.2

Accumulated other comprehensive income
67.0

 
22.7

Total shareholders’ equity
6,193.4

 
5,109.0

Noncontrolling interests
2.1

 
5.5

Total equity
6,195.5

 
5,114.5

TOTAL LIABILITIES AND EQUITY
$
10,504.0

 
$
8,219.2



- more -

15

STARBUCKS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited and in millions)
Fiscal Year Ended
Sep 29,
2013
 
Sep 30,
2012
 
Oct 2,
2011
OPERATING ACTIVITIES:
 
 
 
 
 
Net earnings including noncontrolling interests
$
1,721.9

 
$
1,384.7

 
$
1,248.0

Adjustments to reconcile net earnings to net cash provided by operating activities:
 
 
 
 
 
Depreciation and amortization
655.6

 
580.6

 
550.0

Gain on sale of properties

 

 
(30.2
)
Deferred income taxes, net
65.2

 
61.1

 
106.2

Income earned from equity method investees, net of distributions
(56.2
)
 
(49.3
)
 
(32.9
)
Gain resulting from sale/acquisition of equity in joint ventures
(80.1
)
 

 
(55.2
)
Stock-based compensation
142.3

 
153.6

 
145.2

Other
33.5

 
23.6

 
33.3

Cash provided/(used) by changes in operating assets and liabilities:
 
 
 
 
 
Accounts receivable
(68.3
)
 
(90.3
)
 
(88.7
)
Inventories
152.5

 
(273.3
)
 
(422.3
)
Accounts payable
88.7

 
(105.2
)
 
227.5

Accrued liabilities and insurance reserves
47.5

 
23.7

 
(81.8
)
Deferred revenue
139.9

 
60.8

 
35.8

Prepaid expenses, other current assets and other assets
76.3

 
(19.7
)
 
(22.5
)
Net cash provided by operating activities
2,918.8

 
1,750.3

 
1,612.4

INVESTING ACTIVITIES:
 
 
 
 
 
Purchase of investments
(785.9
)
 
(1,748.6
)
 
(966.0
)
Sales, maturities and calls of investments
1,040.2

 
1,796.4

 
430.0

Acquisitions, net of cash acquired
(610.4
)
 
(129.1
)
 
(55.8
)
Additions to property, plant and equipment
(1,161.7
)
 
(856.2
)
 
(531.9
)
Proceeds from the sale of property, plant, and equipment
15.3

 
5.3

 
117.4

Proceeds from sale of equity in joint ventures
108.0

 

 

Other
(27.2
)
 
(41.8
)
 
(13.2
)
Net cash used by investing activities
(1,421.7
)
 
(974.0
)
 
(1,019.5
)
FINANCING ACTIVITIES:
 
 
 
 
 
Proceeds from issuance of long-term debt
749.7

 

 

Principal payments on long-term debt
(35.2
)
 

 

(Payments)/proceeds from short-term borrowings

 
(30.8
)
 
30.8

Purchase of noncontrolling interest

 

 
(27.5
)
Proceeds from issuance of common stock
247.2

 
236.6

 
250.4

Excess tax benefit from exercise of stock options
258.1

 
169.8

 
103.9

Cash dividends paid
(628.9
)
 
(513.0
)
 
(389.5
)
Repurchase of common stock
(588.1
)
 
(549.1
)
 
(555.9
)
Minimum tax withholdings on share-based awards
(121.4
)
 
(58.5
)
 
(15.0
)
Other
10.4

 
(0.5
)
 
(5.2
)
Net cash used by financing activities
(108.2
)
 
(745.5
)
 
(608.0
)
Effect of exchange rate changes on cash and cash equivalents
(1.8
)
 
9.7

 
(0.8
)
Net increase/(decrease) in cash and cash equivalents
1,387.1

 
40.5

 
(15.9
)
CASH AND CASH EQUIVALENTS:
 
 
 
 
 
Beginning of period
1,188.6

 
1,148.1

 
1,164.0

End of period
$
2,575.7

 
$
1,188.6

 
$
1,148.1

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
 
 
 
 
 
Cash paid during the period for:
 
 
 
 
 
Interest, net of capitalized interest
$
34.4

 
$
34.4

 
$
34.4

Income taxes
$
539.1

 
$
416.9

 
$
350.1



- more -

16

Supplemental Information

The following supplemental information is provided for historical and comparative purposes. 
Fiscal Fourth Quarter 2013 U.S. Supplemental Data
 
 
 
 
 
 
 
Quarter Ended
 
 
($ in millions)
Sep 29, 2013
 
Sep 30, 2012
 
Change
Revenues
$2,451.3
 
$2,204.7
 
11%
Operating Income
$583.8
 
$495.2
 
18%
Operating Margin
23.8%
 
22.5%
 
130 bps


Store Data:

 
Net stores opened (closed) during the period
 
 
 
 
 
Quarter Ended
 
Year Ended
 
Stores open as of
 
Sep 29,
2013
 
Sep 30,
2012
 
Sep 29,
2013
 
Sep 30,
2012
 
Sep 29,
2013
 
Sep 30,
2012
Americas
 
 
 
 
 
 
 
 
 
 
 
Company-operated stores(1)
164

 
150

 
276

 
228

 
8,078

 
7,802

Licensed stores(1)
176

 
106

 
404

 
280

 
5,415

 
5,011

 
340

 
256

 
680

 
508

 
13,493

 
12,813

EMEA
 
 
 
 
 
 
 
 
 
 
 
Company-operated stores (2)
(6
)
 
3

 
(29
)
 
10

 
853

 
882

Licensed stores(2)
34

 
30

 
129

 
101

 
1,116

 
987

 
28

 
33

 
100

 
111

 
1,969

 
1,869

CAP
 
 
 
 
 
 
 
 
 
 
 
Company-operated stores
79

 
59

 
240

 
154

 
906

 
666

Licensed stores
118

 
73

 
348

 
294

 
2,976

 
2,628

 
197

 
132

 
588

 
448

 
3,882

 
3,294

All Other Segments
 
 
 
 
 
 
 
 
 
 
 
Company-operated stores
7

 

 
343