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Meldungen 22.04.2004

22.4.2004: Meldung: Starbucks Corp.: Record Second Quarter Results

Starbucks Announces Record Second Quarter Results

Wednesday April 21, 4:02 pm ET

30% Revenue Growth Plus Continued Margin Improvement Drive 53% Net Earnings Increase

Raises Full Year Earnings Per Share Target to the Range of $0.90 to $0.91

 

SEATTLE-- April 21, 2004-- Starbucks Corporation (Nasdaq:SBUX - News) today announced revenues and earnings for its fiscal second quarter ended March 28, 2004.

 

For the 13 weeks ended March 28, 2004, consolidated net revenues increased 30 percent to $1.2 billion from $954 million for the same period in fiscal 2003. Net earnings for the 13 weeks ended March 28, 2004, increased 53 percent to $79 million from $52 million for the same period in fiscal 2003. Diluted earnings were $0.19 per share for the 13 weeks ended March 28, 2004, compared to $0.13 per share for the comparable period in fiscal 2003.

 

For the 26 weeks ended March 28, 2004, consolidated net revenues increased 29 percent to $2.5 billion from $2.0 billion for the same period in fiscal 2003. Net earnings for the 26 weeks ended March 28, 2004, increased 46 percent to $190 million from $130 million for the same period in fiscal 2003. Diluted earnings were $0.46 per share for the 26 weeks ended March 28, 2004, compared to $0.33 per share for the comparable period in fiscal 2003.

 

"During the second quarter, all areas of our business, from our retail operations both domestically and internationally, to our specialty businesses delivered strong financial performance," stated Orin Smith, president and ceo. "Company-operated retail stores posted the strongest quarterly comparable store sales gain for the Company in more than ten years. Additionally, innovation was prevalent throughout the Company and we believe recently announced initiatives combined with our core retail business provide a powerful platform for future growth."

 

Consolidated Financial and Operating Summary

 

Company-operated retail revenues increased 30 percent to $1.1 billion for the 13 weeks ended March 28, 2004, from $809 million for the same period in fiscal 2003. The increase was primarily attributable to the opening of 671 new Company-operated retail stores in the last 12 months and comparable store sales growth of 12 percent for the quarter. The increase in comparable store sales was due to an 11 percent increase in the number of customer transactions and a one percent increase in the average dollar value per transaction.

 

Specialty revenues increased 32 percent to $191 million for the 13 weeks ended March 28, 2004, compared to $145 million for the same period in fiscal 2003. Licensing revenues increased 33 percent to $123 million due to the addition of 705 new licensed retail stores in the last 12 months as well as growth in the grocery and warehouse club businesses. Foodservice and other revenues increased 29 percent to $68 million primarily due to the acquisition of Seattle Coffee Company in the fiscal fourth quarter of 2003 and growth in new and existing Starbucks foodservice accounts.

 

Cost of sales and related occupancy costs were unchanged at 41.1 percent of total net revenues for the 13 weeks ended March 28, 2004, compared to the corresponding period of fiscal 2003. A shift in sales mix toward lower margin products and higher green coffee and dairy commodity costs were offset by efficiencies in supply chain distribution operations and leverage gained on fixed occupancy costs spread over an expanded revenue base.

 

Store operating expenses as a percentage of Company-operated retail revenues decreased to 40.6 percent for the 13 weeks ended March 28, 2004, from 40.7 percent for the corresponding period of fiscal 2003 primarily due to leverage gained on fixed occupancy and personnel expenditures spread over an expanded revenue base. This leverage was partially offset by costs associated with retail management participation in the Company"s global leadership conference held in March 2004. The conference is an important investment in the Company"s development of its partners (employees).

 

Other operating expenses (expenses associated with the Company"s specialty operations) decreased to 21.4 percent of total specialty revenues for the 13 weeks ended March 28, 2004, compared to 25.2 percent in the corresponding period of fiscal 2003. This decrease was primarily due to leverage in the current fiscal period on most fixed expenditures spread over an expanded revenue base and a $2.0 million provision recorded in the corresponding period of fiscal 2003 for dissolving the Company"s licensed Israel operations.

 

Depreciation and amortization expenses increased to $72.0 million for the 13 weeks ended March 28, 2004, compared to $58.0 million for the corresponding period of fiscal 2003. The increase was primarily due to the opening of 671 Company-operated retail stores in the last 12 months and higher depreciation expenses associated with the Company"s foodservice operations. As a percentage of total net revenues, depreciation and amortization decreased to 5.8 percent for the 13 weeks ended March 28, 2004, from 6.1 percent for the same period in fiscal 2003.

 

General and administrative expenses increased to $80.0 million for the 13 weeks ended March 28, 2004, compared to $59.6 million for the corresponding period of fiscal 2003. The increase was primarily due to higher payroll-related expenditures. As a percentage of total net revenues, general and administrative expenses increased to 6.4 percent for the 13 weeks ended March 28, 2004, from 6.2 percent for the same period in fiscal 2003. As a percentage of total net revenues, the increase was due to a higher provision for incentive compensation based on the Company"s outstanding performance during the quarter.

 

Income from equity investees increased $5.7 million to $12.3 million for the 13 weeks ended March 28, 2004, from $6.6 million for the same period in fiscal 2003. The increase was attributable to volume driven operating results in international markets, particularly in Japan, as well as the North American Coffee Partnership. New licensed retail store openings and the July 2003 increase in the Company"s ownership interest from five percent to 50 percent for the Taiwan and Shanghai licensed operations also contributed to the growth.

 

Operating income increased 45.6 percent to $124.5 million for the 13 weeks ended March 28, 2004, compared to $85.5 million for the same period in fiscal 2003. Operating margin increased to 10.0 percent of total net revenues in the 13 weeks ended March 28, 2004, compared to 9.0 percent in the corresponding period of fiscal 2003, primarily due to reductions in store operating, other operating, and depreciation and amortization expenses as a percentage of total net revenues.

 

Interest and other income increased to $3.7 million for the 13 weeks ended March 28, 2004, from $1.2 million in the corresponding period of fiscal 2003, primarily due to higher interest income earned on cash and liquid investment balances and a smaller loss this year compared to last year related to transactions based in currencies other than the United States dollar.

 

Fiscal 2004 Targets

 

The Company also provided updated fiscal 2004 targets:

 

* Starbucks plans to open approximately 1,300 new stores on a global basis for fiscal 2004. In the United States the Company plans to open approximately 525 new Company-operated locations and 350 licensed locations. Internationally, including Canada, the Company plans to open approximately 100 locations in Company-operated markets and 325 locations in licensed markets;

* Based on the above-target year-to-date revenue growth of 28.8 percent, as well as the 53rd week of sales that will be recorded in the fourth quarter, the Company now expects full year fiscal 2004 revenue growth in the range of 25 percent to 30 percent. For the remainder of this fiscal year, comparable store sales growth may continue to exceed the Company"s target range of three to seven percent. However, the Company continues to believe that approximately 20 percent total revenue growth and three to seven percent comparable store sales growth, with monthly anomalies, are the right levels for longer-term expectations;

* The Company continues to target modest improvement in full year operating income margin in fiscal year 2004, resulting from sales leverage of fixed occupancy costs and most operating expenses;

* As a result of Starbucks strong second quarter results along with its current revenue and operating income margin outlook for fiscal 2004, the Company is raising its full-year earnings per share target range by $0.04 per share to $0.90 to $0.91 per share. This target range is an increase from the previous target of $0.86 to $0.87 and is $0.06 to $0.07 above the Company"s original fiscal 2004 target range of $0.83 to $0.85 per share. Both the new target and the previous target ranges include an approximate $0.02 per share benefit from the 53rd week in fiscal 2004. The entire benefit from the 53rd week will occur in the fourth quarter of fiscal 2004. On a quarterly basis, Starbucks now expects year-over-year earnings per share growth in the range of 20 to 25 percent in the third quarter of fiscal 2004, and in the range of 40 to 45 percent in the fourth quarter of fiscal 2004, and;

* The Company is updating its target for capital expenditures to approximately $475 million.

 

Finally, Starbucks believes it is well-positioned to aggressively pursue its goals of approximately 20 percent revenue growth and 20 to 25 percent earnings per share growth over the next three to five years.

 

Starbucks will be holding a conference call today at 1:30 p.m. Pacific time, which will be hosted by Howard Schultz, chairman and chief global strategist, Orin Smith, president and chief executive officer, Michael Casey, executive vice president and chief financial officer, and Jim Donald, president, North America. The call will be broadcast live over the Internet and can be accessed at the Company"s web site address ofwww.starbucks.com/aboutus/investor.asp. A replay of the call will be available via telephone from approximately 5:30 p.m. Pacific time today through 5:30 p.m. Pacific time on April 28, 2004, by calling 1-800-642-1687, reservation number 6683486, or via the Investor Relations page on Starbucks.com through approximately 5:00 p.m. Pacific time on Tuesday, May 18, 2004 at the following URL:www.starbucks.com/aboutus/investor.asp.

 

 

 

Segment Results

 

Segment information is prepared on the same basis that the Company"s management internally reviews financial information for operational decision making purposes.

 

United States

 

United States operations ("United States") sell coffee and other beverages, whole bean coffees, complementary food, coffee brewing equipment and merchandise primarily through Company-operated retail stores. Specialty operations within the United States include retail store and other licensing operations, foodservice accounts and other initiatives related to the Company"s core businesses.

 

International

 

International operations ("International") sell coffee and other beverages, whole bean coffees, complementary food, coffee brewing equipment and merchandise through Company-operated retail stores in Canada, the United Kingdom, Thailand and Australia, as well as through retail store licensing operations and foodservice accounts in these and 30 other countries. International operations are in various early stages of development and have country-specific regulatory requirements that require a more extensive support organization relative to the current levels of revenue and operating income than the United States.

 

Unallocated Corporate

 

Unallocated corporate expenses pertain to certain functions, such as executive management, accounting, administration, tax, treasury, and information technology infrastructure, which are not specifically attributable to the Company"s operating segments and include related depreciation and amortization expenses.

 

 

United States

 

United States total net revenues increased by $239 million, or 29 percent, to $1.1 billion for the 13 weeks ended March 28, 2004, compared to $817 million for the corresponding period of fiscal 2003. United States Company-operated retail revenues increased by $200 million, or 29 percent, to $898 million for the 13 weeks ended March 28, 2004, compared to $698 million for the corresponding period of fiscal 2003, primarily due to the opening of 560 new Company-operated retail stores in the last 12 months and comparable store sales growth of 13 percent for the 13 weeks ended March 28, 2004. The increase in comparable store sales was due to a 12 percent increase in the number of customer transactions and a one percent increase in the average dollar value per transaction.

 

Total United States specialty revenues increased $39 million, or 33 percent, to $157 million for the 13 weeks ended March 28, 2004, compared to $118 million in the corresponding period of fiscal 2003. The increase was primarily related to foodservice operations, which benefited from the acquisition of Seattle Coffee Company in the fiscal fourth quarter of 2003, as well as the growth in new and existing Starbucks foodservice accounts. Increases in retail store licensing revenues, due to the opening of 438 new licensed retail stores in the last 12 months, as well as in the grocery and warehouse club businesses contributed to specialty revenue growth.

 

United States operating income increased by 30.2 percent to $173.6 million for the 13 weeks ended March 28, 2004, from $133.3 million for the same period in fiscal 2003. Operating margin increased to 16.4 percent of related revenues from 16.3 percent in the corresponding period of fiscal 2003, primarily due to reductions in most operating expenses as a percentage of related revenues.

 

International

 

International total net revenues increased by $48 million, or 35 percent, to $186 million for the 13 weeks ended March 28, 2004, compared to $138 million for the corresponding period of fiscal 2003. International Company-operated retail revenues increased by $41 million, or 37 percent, to $152 million for the 13 weeks ended March 28, 2004, compared to $111 million for the corresponding period for fiscal 2003, primarily due to the opening of 111 new Company-operated retail stores in the last 12 months and comparable store sales growth of six percent for the 13 weeks ended March 28, 2004. The increase in comparable store sales resulted from a four percent increase in the number of customer transactions and a two percent increase in the average dollar value per transaction.

 

Total international specialty revenues increased $7 million, or 25 percent, to $33 million for the 13 weeks ended March 28, 2004, compared to $27 million in the corresponding period of fiscal 2003. The increase was primarily due to higher product sales and higher royalty revenue as a result of the opening of 267 new licensed retail stores in the last 12 months.

 

International operating income increased to $8.4 million for the 13 weeks ended March 28, 2004, from an operating loss of $3.8 million in the corresponding period of fiscal 2003. Operating margin increased to 4.5 percent of related revenues from a negative 2.8 percent in the corresponding period of fiscal 2003, primarily due to greater efficiency throughout the system. Excluding Canadian operations, operating income increased to $2.6 million for the 13 weeks ended March 28, 2004, compared to an operating loss of $8.2 million in the corresponding period of fiscal 2003.

 

Starbucks Coffee Company is the leading retailer, roaster and brand of specialty coffee in the world, with more than 7,500 retail locations in North America, Latin America, Europe, the Middle East and the Pacific Rim. The Company is committed to offering the highest quality coffee and the Starbucks Experience while conducting its business in ways that produce social, environmental and economic benefits for communities in which it does business. In addition to its retail operations, the Company produces and sells bottled Frappuccino® coffee drinks, Starbucks DoubleShot(TM) coffee drink, and a line of superpremium ice creams through its joint venture partnerships. The Company"s brand portfolio provides a wide variety of consumer products. Tazo Tea"s line of innovative premium teas and Hear Music"s exceptional compact discs enhance the Starbucks Experience through best-of-class products. The Seattle"s Best Coffee® and Torrefazione Italia® Coffee brands enable Starbucks to appeal to a broader consumer base by offering an alternative variety of coffee flavor profiles.

 

Contact:

 

Starbucks Corporation

Mary Ellen Fukuhara, 206-318-4025 (Investor Relations)

Lara Wyss, 206-447-7950 ext. 52690 (Media)

www.businesswire.com/cnn/sbux.shtml

 

 

Source: Starbucks Corporation

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