16.11.07

16.11.2007: Meldung: Starbucks Reports Q4 & Record Full Year 2007 Results

Revenue Growth of 22 Percent for the Quarter and 21 Percent for Fiscal 2007

Comparable Store Sales Growth of Four Percent for the Quarter and Five Percent for Fiscal Year 2007

Significant Q4 International Operating Margin Expansion

EPS of $0.21 for the Quarter and $0.87 for Fiscal 2007

SEATTLE--(BUSINESS WIRE)--Nov. 15, 2007--Starbucks Corporation (NASDAQ:SBUX) today announced financial results for its fiscal fourth quarter and fiscal year ended September 30, 2007.

Fiscal Fourth Quarter 2007 Highlights:

* Consolidated net revenues of $2.4 billion, a 22 percent increase
* Comparable store sales growth of four percent
* Operating margin improved 30 basis points to 10.2 percent
* Earnings per share of $0.21, compared to $0.15 per share

Fiscal Year End 2007 Highlights:

* 2,571 new store openings; 70 percent in the U.S. and 30 percent in International markets
* Consolidated net revenues of $9.4 billion, a 21 percent increase
* Comparable store sales growth of five percent
* Operating margin contracted 30 basis points to 11.2 percent
* Earnings per share of $0.87, compared to $0.71 per share

"For the year, we delivered solid results, in spite of a difficult economic and operating environment," said Jim Donald, president and CEO. "Looking ahead, we believe in the global opportunity for Starbucks, and we remain focused on delivering the highest quality beverages and legendary service, while driving innovation and extending the Starbucks Experience to more customers throughout the world."

Consolidated net revenues increased 22 percent to $2.4 billion for the 13 weeks ended September 30, 2007, compared to $2.0 billion for the fiscal fourth quarter of 2006. Net earnings totaled $159 million in the fourth quarter 2007 versus $117 million for the same period a year ago. Earnings per share for the fourth quarter rose to $0.21 from $0.15 in the prior year period. Net earnings and earnings per share in fiscal 2006 included a one-time cumulative accounting charge of $17 million or $0.02 per share recorded in the fourth quarter of fiscal 2006 resulting from the company"s adoption of the new accounting requirements of FIN 47, which addresses asset retirement obligations. Excluding the cumulative effect of the adjustment, fiscal 2007 fourth quarter earnings grew 18 percent and earnings per share increased 24 percent.

Fiscal Year 2007 in Review

Fiscal year 2007 consolidated net revenues increased 21 percent to $9.4 billion, compared to $7.8 billion for the 52 weeks ended October 1, 2006. Company-operated retail revenues in fiscal 2007 rose 21 percent to $8.0 billion from $6.6 billion in fiscal 2006, predominantly due to the opening of 1,342 stores and comparable store sales growth of five percent. The increase in comparable store sales was due to a four percent increase in the average value per transaction and one percent growth in the number of customer transactions. Specialty revenues grew 17 percent to $1.4 billion from $1.2 billion in fiscal 2006.

For fiscal 2007, operating income increased to $1.1 billion, compared to $894 million for fiscal 2006. Operating margin contracted 30 basis points to 11.2 percent of total net revenues for the full year ended September 30, 2007, from 11.5 percent for the same period a year ago. Margin compression was due to higher costs of sales and occupancy costs as a percentage of total net revenues due to a shift in sales to higher cost products and higher distribution costs, rent expense and dairy costs. These cost pressures were offset in part by lower general and administrative and store operating expenses as a percentage of total net revenues.

Net earnings rose to $673 million in fiscal 2007 from $564 million for the previous year. Earnings per share for the period increased to $0.87 compared to $0.71 a year ago. Excluding the adjustment for FIN 47 in fourth quarter 2006, earnings grew 16 percent and earnings per share increased 19 percent.

Fourth Quarter Summary of Results

Company-operated retail revenues increased 21 percent to $2.1 billion for the 13 weeks ended September 30, 2007, from $1.7 billion for the same period in fiscal 2006, resulting primarily from opening 1,342 new company-operated retail stores in the last 12 months and comparable store sales growth of four percent for the quarter. The increase in comparable store sales was due to a four percent increase in the average value per transaction.

Specialty revenues increased 24 percent to $383 million for the 13 weeks ended September 30, 2007, compared to $309 million for the corresponding period of fiscal 2006. Licensing revenues increased 27 percent to $283 million for the 13 weeks ended September 30, 2007, driven by revenue growth of 44 percent from the company"s Global Consumer Products business, and from higher product sales and royalty revenues from the opening of 1,229 new licensed retail stores in the last 12 months.

Cost of sales including occupancy increased to 43.7 as a percent of total net revenues for the 13 weeks ended September 30, 2007, compared to 41.7 percent in the corresponding 13-week period of fiscal 2006. The increase was primarily due to a shift in sales to higher cost products and higher dairy costs.

Store operating expenses as a percentage of company-operated retail revenues improved to 41.0 percent for the 13 weeks ended September 30, 2007, from 42.1 percent for the corresponding period of fiscal 2006. The improvement was due to the benefit gained from price increases coupled with leverage on regional overhead, partially offset by higher payroll expenditures from wage increases for retail store partners.

Other operating expenses (expenses associated with the company"s specialty operations) decreased to 19.5 percent of total specialty revenues for the 13 weeks ended September 30, 2007, compared to 21.4 percent in the corresponding period of fiscal 2006. The improvement resulted primarily from lower payroll-related expenditures as a percentage of total specialty revenues.

General and administrative expenses as a percentage of total net revenues decreased to 5.0 percent for the fourth quarter fiscal 2007, from 5.8 percent for the corresponding period of fiscal 2006. The improvement was a result of leveraging of the company"s scale and infrastructure against continued global growth.

Operating income increased to $248 million for the 13 weeks ended September 30, 2007, compared to $198 million for the corresponding period of fiscal 2006. Operating margin increased 30 basis points to 10.2 percent of total net revenues for the 13 weeks ended September 30, 2007, from 9.9 percent for the corresponding period of fiscal 2006. Lower store operating expenses, general and administrative expenses, and other operating expenses as a percentage of total net revenues more than offset the increase in cost of sales including occupancy.

Net interest and other was an expense of $1.2 million for the 13 weeks ended September 30, 2007, compared to income of $3.9 million for the corresponding period of fiscal 2006, primarily due to a higher level of borrowings outstanding, which include the $550 million senior notes issued in August 2007.

Fourth Quarter Results - United States

United States total net revenues increased 19 percent to $1.9 billion for the 13 weeks ended September 30, 2007, compared to $1.6 billion for the corresponding period of fiscal 2006. United States company-operated retail revenues increased 19 percent to $1.7 billion, primarily due to the opening of 1,065 new company-operated retail stores in the last 12 months and comparable store sales growth of four percent for the quarter. Comparable store sales growth was due to a five percent increase in the average value per transaction, which included the impact of price increases taken during the fiscal year, partially offset by a one percent decrease in number of transactions.

Total United States specialty revenues increased 16 percent to $201 million for the 13 weeks ended September 30, 2007, compared to $173 million in the corresponding period of fiscal 2006. United States licensing revenues in the fourth quarter 2007 increased 17 percent to $111 million from $95 million for the same period a year ago. The growth was primarily due to higher product sales and royalty revenues as a result of opening 723 new licensed retail stores in the last 12 months.

United States operating income increased 12 percent to $225 million for the 13 weeks ended September 30, 2007, from $201 million for the corresponding period in fiscal 2006. Operating margin decreased 70 basis points to 12.1 percent of related revenues from 12.8 percent in the corresponding period of fiscal 2006. The decrease was driven by higher cost of sales including occupancy costs, primarily due to higher dairy costs.

Fourth Quarter Results - International

International total net revenues increased 31 percent to $472 million for the 13 weeks ended September 30, 2007, compared to $361 million for the corresponding period of fiscal 2006. International company-operated retail revenues increased 32 percent to $399 million, primarily due to the opening of 277 new company-operated retail stores in the last 12 months, favorable foreign currency exchange for the British pound sterling and Canadian dollar, and comparable store sales growth of six percent for the quarter. The increase in comparable store sales resulted from a five percent increase in the number of customer transactions coupled with a one percent increase in the average value per transaction.

Total International specialty revenues increased by $13 million, or 23 percent, to $73 million for the 13 weeks ended September 30, 2007, compared to $59 million in the corresponding period of fiscal 2006. The growth was primarily due to higher product sales and royalty revenues from opening 506 licensed retail stores in the last 12 months.

International operating income increased to $51 million for the 13 weeks ended September 30, 2007, compared to $27 million in the corresponding period of fiscal 2006. Operating margin increased 350 basis points to 10.8 percent of related revenues from 7.3 percent in the corresponding period of fiscal 2006, primarily due to lower general and administrative expenses and lower store operating expenses as a percentage of related revenues, as well as higher income from equity investees.

Fourth Quarter Results - Global Consumer Products Group

For the Global Consumer Products Group (CPG), total net revenues increased by $33 million, or 44 percent, to $110 million for the 13 weeks ended September 30, 2007, compared to $76 million for the corresponding period of fiscal 2006. The increase in revenues was primarily due to higher sales of U.S. packaged coffee and tea and increased product sales and royalties in the international ready-to-drink business.

CPG operating income increased to $62 million for the 13 weeks ended September 30, 2007, compared to $47 million in the same period of fiscal 2006. Operating margin decreased to 56.9 percent of related revenues from 61.8 percent in fiscal fourth quarter 2006. Contraction of operating margin for the quarter was due to slower growth in income from equity investees from The North American Coffee Partnership, which produces ready-to-drink beverages.

Fourth Quarter Results - Unallocated Corporate Expenses

Total unallocated corporate expenses as a percentage of total net revenues improved to 3.7 percent for the 13-weeks ended September 30, 2007, from 3.8 percent for the corresponding period of fiscal 2006, primarily due to leverage from growth.

Cash Flow and Balance Sheet

For the 52 weeks ended September 30, 2007, net cash flow from operating activities totaled $1.3 billion, compared to $1.1 billion in the same period a year ago. Capital expenditures for fiscal year 2007 were $1.1 billion, of which approximately 80 percent was used to fund new store openings and existing store remodels.

On August 23rd, the company issued $550 million of 6.25% Senior Notes due in August 2017. The proceeds were primarily used to repay short-term borrowings and fund additional share repurchases.

During the fourth quarter, the company repurchased a total of 12.6 million shares at a cost of $342 million. During fiscal year 2007, Starbucks repurchased 33.0 million shares at a cost of $1.0 billion. At the end of the fiscal fourth quarter, 13.5 million shares remained available for repurchase under the current authorization.

Fiscal 2008 Targets

During the fourth quarter, Starbucks evaluated its plan for fiscal 2008 given the challenging operating environment. As a result, the company has established the following fiscal 2008 targets:

* The company has adjusted its new store opening target to approximately 2,500 net new stores on a global basis in fiscal 2008; approximately 900 company-operated locations and 700 licensed locations in the U.S., and approximately 300 company-operated stores and 600 licensed stores in international markets;
* Comparable store sales growth in the range of three to five percent;
* Total net revenue growth of approximately 17 to 18 percent;
* Total company operating margin to expand slightly year-over-year, with improvement expected to be in the second half of fiscal 2008;

* U.S. operating margin relatively stable and International operating margin improvement of at least 100 basis points over fiscal 2007;

# Diluted earnings per share in the range of $1.02 to $1.05 representing 17 percent to 21 percent growth, with earningsper share expansion expected to be greater in the second half of fiscal 2008;

* First quarter fiscal 2008 earnings per share of $0.28; impacted by ongoing dairy cost pressure coupled with expectations of continued softness in the U.S. consumer and economic environment compared to first quarter fiscal 2007;

# Effective tax rate in-line with fiscal 2007; and,
# Capital expenditures in-line with the $1.1 billion invested in fiscal 2007.

Pete Bocian, chief financial officer, commented, "Given the current economic environment, and the commodity costs that are not expected to ease until the latter part of the year, we expect EPS expansion to be greater in the second half of fiscal 2008."

Conference Call

Starbucks will be holding a conference call today at 2:00 p.m. PST, which will be hosted by Jim Donald, president and ceo, Martin Coles, chief operating officer, and Pete Bocian, executive vice president and chief financial officer. The call will be broadcast live over the Internet and can be accessed at the company"s web site address of http://investor.starbucks.com. A replay of the call will be available via telephone through 5:30 p.m. PST on Thursday, November 22, 2007, by calling 1-800-642-1687, reservation number 4132564. A posting of speaker remarks and a replay of the call will also be available via the Investor Relations page on Starbucks.com through approximately 5:00 p.m. PST on Friday, December 14, 2007, at the following URL: http://investor.starbucks.com.

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 filed with the Securities and Exchange Commission on December 14, 2006, as amended by Amendment No.1 to Annual Report on Form 10-K/A filed on December 21, 2006, for additional information.

About Starbucks

Starbucks Coffee Company provides an uplifting experience that enriches people"s lives one moment, one human being, one extraordinary cup of coffee at a time. To share in the experience, visit www.starbucks.com.

Forward-Looking Statements

This release includes forward-looking statements about trends in or expectations regarding: store openings, comparable store sales, net revenue, earnings per share, operating margin, commodity costs, effective tax rate, and capital expenditures. These forward-looking statements are based on currently available operating, financial and competitive information and are subject to various risks and uncertainties. Actual future results and trends may differ materially depending on a variety of factors including, but not limited to, coffee, dairy and other raw material prices and availability, successful execution of internal performance and expansion plans, fluctuations in U.S. and international economies and currencies, the impact of initiatives by competitors, the effect of legal proceedings, and other risks detailed in the company"s 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 1, 2006. The company assumes no obligation to update any of these forward-looking statements.

STARBUCKS CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)

13 Weeks Ended 13 Weeks Ended
---------------------------- ----------------
Sept 30, Oct 1, % Sept 30, Oct 1,
2007 2006 Change 2007 2006
----------- ---------------- --------- ------
(in thousands, except per As a % of total
share data) net revenues
----------------
Net revenues:
Company-operated
retail $2,057,977 $1,694,294 21.5% 84.3 % 84.6%
Specialty:
Licensing 282,705 222,905 26.8 11.6 11.1
Foodservice and
other 100,253 86,156 16.4 4.1 4.3
---------------------- ----------------
Total specialty 382,958 309,061 23.9 15.7 15.4
---------------------- ----------------
Total net revenues 2,440,935 2,003,355 21.8 100.0 100.0

Cost of sales
including occupancy
costs 1,065,674 834,991 27.6 43.7 41.7
Store operating
expenses (a) 843,725 713,774 18.2 34.6 35.6
Other operating
expenses (b) 74,510 66,230 12.5 3.0 3.3
Depreciation and
amortization expenses 124,170 102,876 20.7 5.1 5.1
General and
administrative
expenses 123,312 116,412 5.9 5.0 5.8
---------------------- ----------------
Subtotal operating
expenses 2,231,391 1,834,283 21.6 91.4 91.5

Income from equity
investees 38,489 28,566 34.7 1.6 1.4
---------------------- ----------------
Operating income 248,033 197,638 25.5 10.2 9.9

Net interest and other
(expense) / income (1,187) 3,852 (0.1) 0.2
---------------------- ----------------
Earnings before
income taxes 246,846 201,490 22.5 10.1 10.1

Income taxes (c) 88,343 66,987 3.6 3.4
---------------------- ----------------
Earnings before
cumulative effect 158,503 134,503 17.8 6.5 6.7

Cumulative effect of
accounting change - 17,214 - 0.8
---------------------- --------- ------
Net earnings $ 158,503 $ 117,289 35.1 6.5 % 5.9%
=========== ========== ========= ======

Earnings before
cumulative effect of
change in accounting
principle - diluted 0.21 0.17 23.5
Cumulative effect of
accounting change - 0.02
----------- ---------
Net earnings per
common share -
diluted $ 0.21 $ 0.15 40.0%
=========== =========
Weighted avg. shares
outstanding - diluted 759,113 784,196

(a) As a percentage of related company-operated retail revenues, store
operating expenses were 41.0 percent for the 13 weeks ended September
30, 2007, and 42.1 percent for the 13 weeks ended October 1, 2006.

(b) As a percentage of related total specialty revenues, other
operating expenses were 19.5 percent for the 13 weeks ended September
30, 2007, and 21.4 percent for the 13 weeks ended October 1, 2006.

(c) The effective tax rates were 35.8 percent for the 13 weeks ended
September 30, 2007, and 33.2 percent for the 13 weeks ended October
1, 2006.

STARBUCKS CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)

52 Weeks Ended 52 Weeks Ended
--------------------------- ----------------
Sept 30, Oct 1, % Sept 30, Oct 1,
2007 2006 Change 2007 2006
---------- ---------------- --------- ------
(in thousands, except per As a % of total
share data) net revenues
-----------------
Net revenues:
Company-operated
retail $7,998,265 $6,583,098 21.5% 85.0% 84.5%
Specialty:
Licensing 1,026,338 860,676 19.2 10.9 11.1
Foodservice and
other 386,894 343,168 12.7 4.1 4.4
--------------------- ----------------
Total specialty 1,413,232 1,203,844 17.4 15.0 15.5
--------------------- ----------------
Total net revenues 9,411,497 7,786,942 20.9 100.0 100.0

Cost of sales including
occupancy costs 3,999,124 3,178,791 25.8 42.5 40.8
Store operating
expenses (a) 3,215,889 2,687,815 19.6 34.2 34.5
Other operating
expenses (b) 294,136 253,724 15.9 3.1 3.3
Depreciation and
amortization expenses 467,160 387,211 20.6 4.9 5.0
General and
administrative
expenses 489,249 479,386 2.1 5.2 6.1
--------------------- ----------------
Subtotal operating
expenses 8,465,558 6,986,927 21.2 89.9 89.7

Income from equity
investees 108,006 93,937 15.0 1.1 1.2
--------------------- ----------------
Operating income 1,053,945 893,952 17.9 11.2 11.5

Net interest and other
(expense) / income 2,419 12,291 - 0.1
--------------------- ----------------
Earnings before
income taxes 1,056,364 906,243 16.6 11.2 11.6

Income taxes (c) 383,726 324,770 4.1 4.1
--------------------- ----------------
Earnings before
cumulative effect 672,638 581,473 15.7 7.1 7.5

Cumulative effect of
accounting change - 17,214 - 0.3
-------------------- ----------------
Net earnings $ 672,638 $ 564,259 19.2 7.1% 7.2%
===================== ================

Earnings before
cumulative effect of
accounting change -
diluted 0.87 0.73 19.2
Cumulative effect of
accounting change - 0.02
--------- ---------
Net earnings per common
share - diluted $ 0.87 $ 0.71 22.5%
========= =========
Weighted avg. shares
outstanding - diluted 770,091 792,556

(a) As a percentage of related company-operated retail revenues, store
operating expenses were 40.2 percent for the 52 weeks ended September
30, 2007, and 40.8 percent for the 52 weeks ended October 1, 2006.

(b) As a percentage of related total specialty revenues, other
operating expenses were 20.8 percent for the 52 weeks ended September
30, 2007, and 21.1 percent for the 52 weeks ended October 1, 2006.

(c) The effective tax rates were 36.3 percent for the 52 weeks ended
September 30, 2007, and 35.8 percent for the 52 weeks ended October
1, 2006.

Segment Results

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

United States Sept 30, Oct 1, % Sept 30, Oct 1,
2007 2006 Change 2007 2006
---------- ---------- ------ --------- ------
As a % of U.S.
total net
13 Weeks Ended revenues
---------------------- -----------------
Net revenues:
Company-operated
retail $1,658,978 $1,392,089 19.2 % 89.2% 88.9%
Specialty:
Licensing 110,932 95,155 16.6 6.0 6.1
Foodservice and
other 89,584 78,226 14.5 4.8 5.0
--------------------- ----------------
Total specialty 200,516 173,381 15.7 10.8 11.1
--------------------- ----------------
Total net revenues 1,859,494 1,565,470 18.8 100.0 100.0

Cost of sales
including occupancy
costs 774,921 617,178 25.6 41.7 39.4
Store operating
expenses (a) 699,433 600,676 16.4 37.6 38.4
Other operating
expenses (b) 48,742 47,444 2.7 2.6 3.1
Depreciation and
amortization expenses 93,273 75,169 24.1 5.0 4.8
General and
administrative
expenses 19,324 24,124 (19.9) 1.0 1.5
--------------------- ----------------
Total operating
expenses 1,635,693 1,364,591 19.9 87.9 87.2

Income from equity
investees 768 - nm - -
--------------------- ----------------
Operating income $ 224,569 $ 200,879 11.8 % 12.1% 12.8%
===================== ================

52 Weeks Ended
----------------------
Net revenues:
Company-operated
retail $6,560,864 $5,495,240 19.4 % 89.3% 88.9%
Specialty:
Licensing 439,161 369,155 19.0 6.0 6.0
Foodservice and
other 348,968 314,162 11.1 4.7 5.1
--------------------- ----------------
Total specialty 788,129 683,317 15.3 10.7 11.1
--------------------- ----------------
Total net revenues 7,348,993 6,178,557 18.9 100.0 100.0

Cost of sales
including occupancy
costs 2,956,231 2,374,485 24.5 40.2 38.4
Store operating
expenses (c) 2,684,196 2,280,044 17.7 36.5 36.9
Other operating
expenses (d) 204,672 190,624 7.4 2.8 3.1
Depreciation and
amortization expenses 348,199 284,625 22.3 4.7 4.6
General and
administrative
expenses 85,948 93,754 (8.3) 1.2 1.5
--------------------- ----------------
Total operating
expenses 6,279,246 5,223,532 20.2 85.4 84.5

Income from equity
investees 768 151 nm - -
--------------------- ----------------
Operating income $1,070,515 $ 955,176 12.1 % 14.6% 15.5%
===================== ================

(a) As a percentage of related company-operated retail revenues, store
operating expenses were 42.2 percent for the 13 weeks ended September
30, 2007, and 43.1 percent for the 13 weeks ended October 1, 2006.

(b) As a percentage of related total specialty revenues, other
operating expenses were 24.3 percent for the 13 weeks ended September
30, 2007, and 27.4 percent for the 13 weeks ended October 1, 2006.

(c) As a percentage of related company-operated retail revenues, store
operating expenses were 40.9 percent for the 52 weeks ended September
30, 2007, and 41.5 percent for the 52 weeks ended October 1, 2006.

(d) As a percentage of related total specialty revenues, other
operating expenses were 26.0 percent for the 52 weeks ended September
30, 2007, and 27.9 percent for the 52 weeks ended October 1, 2006.

International Sept 30, Oct 1, % Sept 30, Oct 1,
2007 2006 Change 2007 2006
---------- ---------- ------ --------- ------
As a % of
International
total net
13 Weeks Ended revenues
----------------------- -----------------
Net revenues:
Company-operated
retail $ 398,999 $ 302,205 32.0 % 84.6% 83.6%
Specialty:
Licensing 62,110 51,351 21.0 13.2 14.2
Foodservice and
other 10,669 7,930 34.5 2.2 2.2
--------------------- ----------------
Total specialty 72,779 59,281 22.8 15.4 16.4
--------------------- ----------------
Total net revenues 471,778 361,486 30.5 100.0 100.0

Cost of sales including
occupancy costs 225,052 172,053 30.8 47.7 47.6
Store operating
expenses (a) 144,292 113,098 27.6 30.6 31.3
Other operating
expenses (b) 20,599 15,755 30.7 4.4 4.4
Depreciation and
amortization expenses 21,764 18,245 19.3 4.6 5.0
General and
administrative
expenses 21,892 23,171 (5.5) 4.6 6.4
--------------------- ----------------
Total operating
expenses 433,599 342,322 26.7 91.9 94.7

Income from equity
investees 12,874 7,358 75.0 2.7 2.0
--------------------- ----------------
Operating income $ 51,053 $ 26,522 92.5 % 10.8% 7.3%
===================== ================

52 Weeks Ended
-----------------------
Net revenues:
Company-operated
retail $1,437,401 $1,087,858 32.1 % 84.7% 83.5%
Specialty:
Licensing 220,832 186,050 18.7 13.0 14.3
Foodservice and
other 37,926 29,006 30.8 2.3 2.2
--------------------- ----------------
Total specialty 258,758 215,056 20.3 15.3 16.5
--------------------- ----------------
Total net revenues 1,696,159 1,302,914 30.2 100.0 100.0

Cost of sales including
occupancy costs 824,594 625,008 31.9 48.6 48.0
Store operating
expenses (c) 531,693 407,771 30.4 31.4 31.3
Other operating
expenses (d) 69,881 50,900 37.3 4.1 3.9
Depreciation and
amortization expenses 84,165 66,800 26.0 5.0 5.1
General and
administrative
expenses 93,806 78,337 19.7 5.5 6.0
---------- ---------- --------- ------
Total operating
expenses 1,604,139 1,228,816 30.5 94.6 94.3

Income from equity
investees 45,723 34,370 33.0 2.7 2.6
--------------------- ----------------
Operating income $ 137,743 $ 108,468 27.0 % 8.1% 8.3%
===================== ================

(a) As a percentage of related company-operated retail revenues, store
operating expenses were 36.2 percent for the 13 weeks ended September
30, 2007, and 37.4 percent for the 13 weeks ended October 1, 2006.

(b) As a percentage of related total specialty revenues, other
operating expenses were 28.3 percent for the 13 weeks ended September
30, 2007, and 26.6 percent for the 13 weeks ended October 1, 2006.

(c) As a percentage of related company-operated retail revenues, store
operating expenses were 37.0 percent for the 52 weeks ended September
30, 2007, and 37.5 percent for the 52 weeks ended October 1, 2006.

(d) As a percentage of related total specialty revenues, other
operating expenses were 27.0 percent for the 52 weeks ended September
30, 2007, and 23.7 percent for the 52 weeks ended October 1, 2006.

Global Consumer Products
Group (CPG) Sept 30, Oct 1, % Sept 30, Oct 1,
2007 2006 Change 2007 2006
------------------------ ----------------
As a % of CPG
total net
13 Weeks Ended revenues
-------------------------- -----------------
Net revenues:
Specialty:
Licensing $109,663 $ 76,399 43.5% 100.0% 100.0%
----------------- ----------------
Total specialty 109,663 76,399 43.5 100.0 100.0
----------------- ----------------
Total net revenues 109,663 76,399 43.5 100.0 100.0

Cost of sales 65,701 45,760 43.6 59.9 59.9
Other operating expenses 5,169 3,031 70.5 4.7 4.0
Depreciation and
amortization expenses 15 21 (28.6) - -
General and administrative
expenses 1,269 1,583 (19.8) 1.2 2.1
----------------- ----------------
Total operating
expenses 72,154 50,395 43.2 65.8 66.0

Income from equity
investees 24,847 21,208 17.2 22.7 27.8
----------------- ----------------
Operating income $ 62,356 $ 47,212 32.1% 56.9% 61.8%
================= ================

52 Weeks Ended
--------------------------
Net revenues:
Specialty:
Licensing $366,345 $305,471 19.9% 100.0% 100.0%
----------------- ----------------
Total specialty 366,345 305,471 19.9 100.0 100.0
----------------- ----------------
Total net revenues 366,345 305,471 19.9 100.0 100.0

Cost of sales 218,299 179,298 21.8 59.6 58.7
Other operating expenses 19,583 12,200 60.5 5.4 4.0
Depreciation and
amortization expenses 76 108 (29.6) - -
General and administrative
expenses 6,349 6,363 (0.2) 1.7 2.1
----------------- ----------------
Total operating
expenses 244,307 197,969 23.4 66.7 64.8

Income from equity
investees 61,515 59,416 3.5 16.8 19.4
----------------- ----------------
Operating income $183,553 $166,918 10.0% 50.1% 54.6%
================= ================

Unallocated Corporate
--------------------------- ----------------
Sept 30, Oct 1, % Sept 30, Oct 1,
2007 2006 Change 2007 2006
--------------------------- ----------------
As a % of total
13 Weeks Ended net revenues
------------------------ ----------------
Depreciation and
amortization expenses $ 9,118 $ 9,441 (3.4)% 0.4 % 0.4 %
General and
administrative expenses 80,827 67,534 19.7 3.3 3.4
--------------------- ----------------
Operating loss $ (89,945) $ (76,975) 16.8 % (3.7)% (3.8)%
===================== ================

52 Weeks Ended
------------------------
Depreciation and
amortization expenses $ 34,720 $ 35,678 (2.7)% 0.4 % 0.4 %
General and
administrative expenses 303,146 300,932 0.7 3.2 3.9
--------------------- ----------------
Operating loss $(337,866) $(336,610) 0.4 % (3.6)% (4.3)%
===================== ================

STARBUCKS CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)

September 30, October 1,
2007 2006
------------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 281,261 $ 312,606
Short-term investments - available-for-
sale securities 83,845 87,542
Short-term investments - trading
securities 73,588 53,496
Accounts receivable, net 287,925 224,271
Inventories 691,658 636,222
Prepaid expenses and other current assets 148,757 126,874
Deferred income taxes, net 129,453 88,777
------------- -----------
Total current assets 1,696,487 1,529,788

Long-term investments - available-for-sale
securities 21,022 5,811
Equity and other investments 258,846 219,093
Property, plant and equipment, net 2,890,433 2,287,899
Other assets 219,422 186,917
Other intangible assets 42,043 37,955
Goodwill 215,625 161,478
------------- -----------
TOTAL ASSETS $ 5,343,878 $ 4,428,941
============= ===========

LIABILITIES AND SHAREHOLDERS" EQUITY
Current liabilities:
Commercial paper and short-term borrowings $ 710,248 $ 700,000
Accounts payable 390,836 340,937
Accrued compensation and related costs 332,331 288,963
Accrued occupancy costs 74,591 54,868
Accrued taxes 92,516 94,010
Other accrued expenses 257,369 224,154
Deferred revenue 296,900 231,926
Current portion of long-term debt 775 762
------------- -----------
Total current liabilities 2,155,566 1,935,620

Long-term debt 550,121 1,958
Other long-term liabilities 354,074 262,857
------------- -----------
Total liabilities 3,059,761 2,200,435

Shareholders" equity:
Common stock ($0.001 par value) -
authorized, 1,200,000,000 shares; issued
and outstanding, 738,285,285 and
756,602,055 shares, respectively,
(includes 3,420,448 common stock units in
both periods) 738 756
Other additional paid-in-capital 39,393 39,393
Retained earnings 2,189,366 2,151,084
Accumulated other comprehensive income 54,620 37,273
------------- -----------
Total shareholders" equity 2,284,117 2,228,506
------------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS" EQUITY $ 5,343,878 $ 4,428,941
============= ===========

STARBUCKS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited and in thousands)

52 Weeks Ended
-------------------------
Sept 30, Oct 1,
2007 2006
------------- -----------
OPERATING ACTIVITIES:
Net earnings $ 672,638 $ 564,259
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Cumulative effect of accounting change for
FIN47, net of taxes - 17,214
Depreciation and amortization 491,238 412,625
Provision for impairments and asset
disposals 26,032 19,622
Deferred income taxes, net (37,326) (84,324)
Equity in income of investees (65,743) (60,570)
Distributions from equity investees 65,927 49,238
Stock-based compensation 103,865 105,664
Tax benefit from exercise of stock options 7,705 1,318
Excess tax benefit from exercise of stock
options (93,055) (117,368)
Net amortization of premium on securities 653 2,013
Cash provided/(used) by changes in
operating assets and liabilities:
Inventories (48,576) (85,527)
Accounts payable 36,068 104,966
Accrued compensation and related costs 38,628 54,424
Accrued taxes 86,371 132,725
Deferred revenue 63,233 56,547
Other operating assets and liabilities (16,437) (41,193)
------------- -----------
Net cash provided by operating activities 1,331,221 1,131,633

INVESTING ACTIVITIES:
Purchase of available-for-sale securities (237,422) (639,192)
Maturity of available-for-sale securities 178,167 269,134
Sale of available-for-sale securities 47,497 431,181
Acquisitions, net of cash acquired (53,293) (91,734)
Net purchases of equity, other investments
and other assets (56,552) (39,199)
Net additions to property, plant and
equipment (1,080,348) (771,230)
------------- -----------
Net cash used by investing activities (1,201,951) (841,040)

FINANCING ACTIVITIES:
Repayments of commercial paper (16,600,841) -
Proceeds from issuance of commercial paper 17,311,089 -
Repayments of short-term borrowings (1,470,000) (993,093)
Proceeds from short-term borrowings 770,000 1,416,093
Proceeds from issuance of common stock 176,937 159,249
Excess tax benefit from exercise of stock
options 93,055 117,368
Principal payments on long-term debt (784) (898)
Proceeds from issuance of long-term debt 548,960 -
Repurchase of common stock (996,798) (854,045)
Other (3,505) -
------------- -----------
Net cash used by financing activities (171,887) (155,326)
Effect of exchange rate changes on cash and
cash equivalents 11,272 3,530
------------- -----------
Net increase/(decrease) in cash and cash
equivalents (31,345) 138,797

CASH AND CASH EQUIVALENTS:
Beginning of period 312,606 173,809
------------- -----------

End of the period $ 281,261 $ 312,606
============= ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the period for:
Interest, net of capitalized interest $ 35,294 $ 10,576
Income taxes $ 342,223 $ 274,134

Fiscal Fourth Quarter 2007 Store Data

The company"s store data for the periods presented are as follows:

Net stores opened during the
period
-------------------------------
13-week period 52-week period Stores open as of
--------------- --------------- -----------------
Sept 30, Oct 1, Sept 30, Oct 1, Sept 30, Oct 1,
2007 2006 2007 2006 2007 2006
--------------- --------------- -----------------
United States:
Company-operated
Stores (1) 227 278 1,065 810 6,793 5,728
Licensed Stores 162 216 723 733 3,891 3,168
--------------- --------------- -----------------
389 494 1,788 1,543 10,684 8,896
--------------- --------------- -----------------
International:
Company-operated
Stores (1) 99 75 277 233 1,712 1,435
Licensed Stores (1) 127 87 506 423 2,615 2,109
--------------- --------------- -----------------
226 162 783 656 4,327 3,544
--------------- --------------- -----------------

Total 615 656 2,571 2,199 15,011 12,440
=============== =============== =================

(1) International store data has been adjusted for the acquisition of
the Beijing operations by reclassifying historical information from
Licensed Stores to company-operated Stores. United States store data
was also adjusted to align with the Hawaii operations segment change
by reclassifying historical information from International company-
operated stores to the United States.

(C) 2007 Starbucks Coffee Company. All rights reserved.

CONTACT:
Starbucks Contact, Investor Relations:
JoAnn DeGrande, 206-318-7893
jdegrand@starbucks.com

SOURCE: Starbucks Corporation
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