27.01.05

27.1.2005: Meldung: Starbucks Corp.: First Quarter Fiscal 2005 Results

Starbucks Announces Record First Quarter Fiscal 2005 Results & Raises Full Year EPS Target Range
Wednesday January 26, 4:03 pm ET
Net Revenues Increase 24 Percent to a Record $1.6 billion
Earnings Per Share Increase 30 Percent to $0.35; Fiscal 2005 Earnings Per Share Target Range Raised to $1.15 to $1.17

SEATTLE---Jan. 26, 2005-- Starbucks Corporation (Nasdaq:SBUX - News) today announced record revenues and earnings for its fiscal first quarter ended January 2, 2005.

For the 13 weeks ended January 2, 2005, consolidated net revenues increased 24 percent to $1.6 billion from $1.3 billion for the same period in fiscal 2004. Net earnings for the 13 weeks ended January 2, 2005, increased 31 percent to $145 million from $110 million for the same period in fiscal 2004. Earnings were $0.35 per share for the 13 weeks ended January 2, 2005, compared to $0.27 per share for the comparable period in fiscal 2004.

"Starbucks first quarter was built around our holiday promotion, which included our popular seasonal beverages, strong customer response to Starbucks? Christmas Blend, and relevant gift options ranging from Starbucks Cards to Starbucks Hear Music offerings," commented Jim Donald, ceo designate. "This exciting line-up resulted in our strongest holiday ever. Looking forward, we believe the innovative winter promotion currently underway in our stores, together with the outstanding Starbucks Experience our partners provide on a daily basis, present customers with a compelling reason to redeem their holiday Starbucks Cards."

Consolidated Financial and Operating Summary

Company-operated retail revenues increased 26 percent to $1.4 billion for the 13 weeks ended January 2, 2005, from $1.1 billion for the same period in fiscal 2004. The increase was primarily attributable to the opening of 642 new Company-operated retail stores in the last 12 months and comparable store sales growth of 10 percent for the quarter. The increase in comparable store sales was due to a six percent increase in the number of customer transactions and a four percent increase in the average value per transaction.

Specialty revenues increased 15 percent to $231 million for the 13 weeks ended January 2, 2005, compared to $201 million for the corresponding period of fiscal 2004. Licensing revenues increased 18 percent to $157 million primarily due to higher product sales and royalty revenues from opening 740 new licensed retail stores in the last 12 months. Foodservice and other revenues increased 10 percent to $74 million primarily due to growth in new and existing U.S. and International foodservice accounts.

Cost of sales and related occupancy costs decreased to 40.9 percent of total net revenues for the 13 weeks ended January 2, 2005, compared to 41.4 percent in the corresponding 13-week period of fiscal 2004, primarily due to a higher average value per retail transaction, partially offset by higher initial costs associated with the Company"s recent expansion of the food program in Company-operated retail stores.

Store operating expenses as a percentage of Company-operated retail revenues increased to 38.3 percent for the 13 weeks ended January 2, 2005, from 37.6 percent for the corresponding period of fiscal 2004, primarily due to higher marketing and payroll-related expenditures for planned acceleration of Company-operated retail store growth and to ensure a consistent Starbucks Experience in existing stores, partially offset by strong revenue growth.

Other operating expenses (expenses associated with the Company"s specialty operations) decreased to 19.2 percent of total specialty revenues for the 13 weeks ended January 2, 2005, compared to 21.8 percent in the corresponding period of fiscal 2004. The decrease was primarily due to efficiencies gained from fully integrating the Seattle Coffee Company during fiscal 2004 and lower expenditures related to marketing and distribution within the grocery and warehouse club businesses.

Depreciation and amortization expenses increased to $76 million for the 13 weeks ended January 2, 2005, compared to $66 million for the corresponding period of fiscal 2004. The increase was primarily due to the opening of 642 new Company-operated retail stores in the last 12 months. As a percentage of total net revenues, depreciation and amortization expenses decreased to 4.8 percent for the 13 weeks ended January 2, 2005, from 5.1 percent for the corresponding 13-week period of fiscal 2004.

General and administrative expenses increased to $84 million for the 13 weeks ended January 2, 2005, compared to $70 million for the corresponding period of fiscal 2004, primarily due to higher payroll-related expenditures and professional fees in support of both domestic and international expansion. As a percentage of total net revenues, general and administrative expenses decreased to 5.3 percent for the 13 weeks ended January 2, 2005, from 5.5 percent for the corresponding period of fiscal 2004.

Income from equity investees increased $3 million to $13 million for the 13 weeks ended January 2, 2005, from $10 million for the corresponding period of fiscal 2004. The increase was primarily due to volume driven operating results for The North American Coffee Partnership, which produces bottled Frappuccino? and Starbucks DoubleShot? coffee drinks, and improved results from international investees as a result of new licensed retail store openings.

Operating income increased 30 percent to $227 million for the 13 weeks ended January 2, 2005, compared to $175 million for the corresponding 13-week period of fiscal 2004. Operating margin increased to 14.3 percent of total net revenues for the 13 weeks ended January 2, 2005, compared to 13.7 percent for the corresponding period of fiscal 2004, primarily due to strong revenue growth, partially offset by higher retail store operating expenses.

Interest and other income increased to $5 million for the 13 weeks ended January 2, 2005, from $3 million in the corresponding period of fiscal 2004, primarily due to interest income earned on higher cash and liquid investment balances.

Net earnings for the 13 weeks ended January 2, 2005, increased 31 percent to $145 million from $110 million for the same period in fiscal 2004. Earnings were $0.35 per share for the 13 weeks ended January 2, 2005, compared to $0.27 per share for the comparable period in fiscal 2004.

Fiscal 2005 Targets

The Company also provided updated fiscal 2005 targets:

* The Company expects to open approximately 1,500 new stores on a global basis in fiscal 2005. In the United States, Starbucks plans to open approximately 550 Company-operated locations and 525 licensed locations. In International markets, Starbucks plans to open approximately 100 Company-operated stores and 325 licensed stores;
* Starbucks is targeting total net revenue growth of approximately 20% in fiscal 2005, excluding the impact of the 53rd week in fiscal 2004;
* The Company maintained its longer term comparable store sales target range of three percent to seven percent, and stated that it expects comparable store sales growth for the remainder of fiscal 2005 to be at the high end of the longer term range, with monthly anomalies;
* Based on the Company"s strong first quarter earnings and updated business forecast for the remainder of the year, Starbucks raised its earnings per share target range to $1.15 to $1.17 for fiscal 2005, excluding the impact from expensing stock options. This is an increase from the Company"s original target range of $1.12 to $1.15 introduced in July 2004;
* Starbucks reaffirmed its fiscal 2005 second and third quarter earnings per share growth targets and moderately increased its fourth quarter earnings per share targeted growth rate. Specifically, the Company is targeting quarterly earnings per share in the range of $0.23 - $0.24 for the second quarter, $0.29 - $0.30 for the third quarter, and $0.28 - $0.29 for fourth quarter of fiscal 2005, resulting in the fiscal year target range of $1.15 to $1.17. The Company recognizes the importance of balancing its short term profitability targets and its long term growth objectives, and as in the past where appropriate, will invest ahead of the curve. This important balance remains consistent with Starbucks commitment to building long term shareholder value;
* The Company continues to target a full year effective tax rate of 37.5% with minor variations from quarter to quarter, and;
* Capital expenditures are expected to be in the range of $600 to $650 million in fiscal 2005.

Starbucks will be holding a conference call today at 1:30 p.m. Pacific time, which will be hosted by Howard Schultz, chairman, Orin Smith, president and chief executive officer, Jim Donald, ceo designate and Michael Casey, 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://www.starbucks.com/aboutus/investor.asp. A replay of the call will be available via telephone through 5:00 p.m. Pacific time on Wednesday, February 2, 2005, by calling 1-800-642-1687, reservation number 3300662, or via the Investor Relations page on Starbucks.com through approximately 5:00 p.m. Pacific time on Thursday, February 24, 2005, at the following URL: http://www.starbucks.com/aboutus/investor.asp.

The Company"s consolidated financial statements, operating segment results, and other additional information have been provided on the following pages in accordance with current year classifications, and 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 10, 2004, for additional information.


United States

United States total net revenues increased by $248 million, or 23 percent, to $1.3 billion for the 13 weeks ended January 2, 2005, compared to $1.1 billion for the corresponding period of fiscal 2004. United States Company-operated retail revenues increased by $225 million, or 24 percent, to $1.1 billion for the 13 weeks ended January 2, 2005, compared to $925 million for the corresponding period of fiscal 2004, primarily due to the opening of 515 new Company-operated retail stores in the last 12 months and comparable store sales growth of 11 percent for the quarter. The increase in comparable store sales was due to a six percent increase in the number of customer transactions and a five percent increase in the average value per transaction.

Total United States specialty revenues increased $23 million, or 14 percent, to $189 million for the 13 weeks ended January 2, 2005, compared to $166 million in the corresponding period of fiscal 2004. United States licensing revenues increased $18 million, or 18 percent, to $121 million, compared to $103 million for the corresponding period of fiscal 2004. The increase was primarily due to higher product sales and royalty revenues as a result of opening 450 new licensed retail stores in the last 12 months. United States foodservice and other revenues increased $5 million, or seven percent, to $68 million from $63 million in fiscal 2004, primarily due to growth in new and existing foodservice accounts.

United States operating income increased by 24 percent to $266 million for the 13 weeks ended January 2, 2005, from $214 million for the same period in fiscal 2004. Operating margin increased to 19.9 percent of related revenues from 19.7 percent in the corresponding period of fiscal 2004, primarily due to strong revenue growth and fixed costs being distributed over an expanded revenue base, partially offset by higher marketing and payroll-related expenditures, as well as higher initial costs associated with the recent expansion of the Company"s food program in Company-operated retail stores.

International

International total net revenues increased by $60 million, or 32 percent, to $251 million for the 13 weeks ended January 2, 2005, compared to $191 million for the corresponding period of fiscal 2004. International Company-operated retail revenues increased by $53 million, or 34 percent, to $209 million for the 13 weeks ended January 2, 2005, compared to $156 million for the corresponding period for fiscal 2004, primarily due to the opening of 127 new Company-operated retail stores in the last 12 months, favorable foreign currency exchange rates for both the British pound sterling and Canadian dollar, and comparable store sales growth of seven percent for the quarter. The increase in comparable store sales resulted from a four percent increase in the number of customer transactions coupled with a three percent increase in the average value per transaction.

Total international specialty revenues increased $7 million, or 21 percent, to $42 million for the 13 weeks ended January 2, 2005, compared to $35 million in the corresponding period of fiscal 2004. The increase was primarily due to higher product sales and royalty revenues from opening 290 licensed retail stores in the last 12 months and expansion of the Canadian grocery and warehouse club business.

International operating income increased to $20 million for the 13 weeks ended January 2, 2005, from $11 million in the corresponding period of fiscal 2004. Operating margin increased to 7.9 percent of related revenues from 5.7 percent in the corresponding period of fiscal 2004, primarily due to leverage gained on fixed costs distributed over an expanded revenue base.


Starbucks Corporation is the leading retailer, roaster and brand of specialty coffee in the world, with more than 8,700 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? 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 superpremium 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.


# ? 2005 Starbucks Coffee Company. All rights reserved.
Contact:

Starbucks Corporation
Investor Relations: Mary Ellen Fukuhara, 206-318-4025
Media: Audrey Lincoff, 206-447-7950 ext. 52690
http://www.businesswire.com/cnn/sbux.shtml


Source: Starbucks Corporation
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