Seattle / WA. (sc) Starbucks Corporation reported financial results for its 13-week fiscal third quarter and 39-week fiscal year to date ended June 30, 2013. Highlights:
- Total net revenues increased 13 percent to 3,7 billion USD
- Global comparable store sales grew eight percent driven by seven percent growth in traffic; all regions accelerated over Q2
- Americas comp growth of nine percent, driven by nine percent comp growth in the U.S.
- EMEA comp growth of two percent, driven by a five percent increase in traffic
- China/Asia Pacific comp growth of nine percent; traffic growth doubled versus Q2
- Consolidated operating income increased 25 percent to 615,2 million USD
- Consolidated operating margin expanded 150 basis points to 16,4 percent
- Earnings per share increased 28 percent to 0,55 USD per share
- Dollars loaded on Starbucks Cards globally grew 30 percent year over year
- Starbucks shipped its one billionth Starbucks- and Tazo-branded K-Cup in the quarter
- Company opened 341 net new stores in Q3; now operates 19’209 stores globally
«Starbucks Q3 results represent the best across-the-board third-quarter performance in our 42-year history», said Howard Schultz, chairman, president and ceo. «Our more than 19’000 store global footprint, our fast-growing CPG presence and our best-in-class digital, card, loyalty and mobile capabilities are creating a ´flywheel´ effect elevating the relevancy of all things Starbucks and driving profitability».
«Our powerful Q3 results reflect the outstanding success of our growth platforms both in the U.S. and globally, with all regions delivering an acceleration in comparable store sales and operating margin versus Q2», said Troy Alstead, chief financial officer. «Our ability to grow income at a pace that exceeds revenue growth clearly demonstrates the strategic synergies we generate across our global footprint, which combined with the diversity of our portfolio, enables consistent delivery of excellent results. Looking forward to FY14 and beyond, I am as confident as ever in our ability to continue to deliver strong revenue and earnings growth».
Fiscal 2013 Targets:
The company provides Q4 fiscal 2013 targets as follows:
- Consolidated operating margin improvement of approximately 100 basis points over Q4 FY12
- Earnings per share in the range of 0,59 USD to 0,60 USD, which includes a 0,03 USD gain on the Q4 sale of Starbucks equity in Argentina and Chile
- Full year earnings per share in the range of 2,22 USD to 2,23 USD
Fiscal 2014 Targets:
The company introduces fiscal 2014 targets as follows:
- Revenue growth of approximately ten percent to 13 percent
- Mid single digit comparable store sales growth
- An additional 1’400 net new stores:
- Americas: approximately 600
- EMEA: approximately 100
- CAP: accelerating to 700
- Consolidated operating margin improvement of approximately 150 to 200 basis points over FY13
- Earnings per share in the range of 2,55 USD to 2,65 USD representing growth of 18 percent to 22 percent, excluding combined gains of 0,06 USD per share in FY13 on the sale of Starbucks equity in Mexico, Argentina and Chile
Third Quarter Fiscal 2013 Summary
Consolidated net revenues were 3,7 billion USD in Q3 FY13, an increase of 13 percent over Q3 FY12. The increase was primarily driven by an eight percent increase in global comparable store sales and incremental revenues from 1’558 net new stores over the past twelve months. Consolidated operating income increased 25 percent to 615,2 million USD, compared to 491,6 million USD for the same period a year ago. Operating margin of 16,4 percent expanded 150 basis points compared to the prior year quarter, primarily driven by sales leverage and lower coffee costs.
Q3 Americas Segment Results
Net revenues for the Americas segment were 2,8 billion USD in Q3 FY13, an increase of twelve percent over Q3 FY12. The increase was primarily due to a nine percent increase in comparable store sales. Also contributing to the net revenue increase was incremental revenues from 596 net new store openings over the past twelve months. Operating income increased to 619,3 million USD in Q3 FY13, growth of 24 percent compared to 498,7 million USD for the same period a year ago. Operating margin of 22,3 percent expanded 210 basis points compared to the prior year quarter and was primarily driven by sales leverage. Also contributing to margin expansion were lower coffee costs.
Q3 EMEA Segment Results
Net revenues for the EMEA segment were 287,2 million USD in Q3 FY13, a two percent increase over Q3 FY12. Licensed stores revenue growth of 35 percent, driven by the opening of 125 net new stores in the last twelve months, was partially offset by a decline in company-operated revenue resulting from prior store portfolio optimization activities. Operating income increased to 9,3 million USD in Q3 FY13, from 1,6 million USD in the prior year quarter. Operating margin expanded 260 basis points to 3,2 percent, primarily driven by ongoing cost management and store portfolio optimization activities.
Q3 China/Asia Pacific Segment Results
Net revenues for the China/Asia Pacific segment were 233,7 million USD in Q3 FY13, an increase of 29 percent over Q3 FY12. The increase was primarily due to incremental revenues from 523 net new store openings over the past twelve months and a nine percent increase in comparable store sales. Operating income of 84,7 million USD in Q3 FY13 increased 38 percent compared to the same period a year ago. Operating margin expanded 250 basis points to 36,2 percent this quarter compared to 33,7 percent in Q3 FY12. The margin expansion was primarily driven by sales leverage, strong performance in our joint venture markets and lower coffee costs.
Q3 Channel Development Segment Results
Net revenues for the Channel Development segment were 336,4 million USD in Q3 FY13, an increase of six percent over Q3 FY12, driven by increased sales of premium single serve products, partially offset by decreased pricing on packaged coffee. Operating income grew 14 percent to 96,3 million USD in Q3 FY13 compared to 84,2 million USD for the same period a year ago. Operating margin increased 200 basis points to 28,6 percent in Q3 FY13 compared to the prior year period. The margin expansion was primarily due to lower coffee costs, partially offset by the impact of packaged coffee price reductions.
Q3 All Other Segments Results
Net revenues for All Other Segments were 107,9 million USD in Q3 FY13, an increase of 107 percent over Q3 FY12, primarily driven by the addition of Teavana retail store sales beginning in Q2 of FY13. Q3 FY13 operating loss was 9,4 million USD compared to a loss of 9,1 million USD for the same period a year ago.
Company Updates
- Starbucks and Danone, the world´s leading producer of fresh dairy products, announced a strategic agreement to offer a jointly created and developed selection of new, healthy specialty yoghurt products in participating Starbucks stores in 2014 and in grocery channels in 2015.
- The company´s long-term business partner Alsea, S.A.B. de C.V., announced its intention to acquire Starbucks 82 percent equity in Chile and its 18 percent equity in Argentina. Following the anticipated closing of the transactions in Q4 FY13, Alsea will fully operate all 494 Starbucks stores in Mexico, Argentina and Chile.
- Starbucks expanded its long-term strategic partnership with Green Mountain Coffee Roasters for the manufacturing, marketing, distribution and sale of Starbucks- and Tazo-branded single serve packs for use in GMCR´s Keurig single serve brewing systems globally.
- Starbucks continued its roll out of La Boulange products by launching its baked goods in Seattle, Portland and Spokane area Starbucks stores beginning in June, bringing the total number of stores that carry La Boulange products to 1’076 at the end of Q3.
- The company announced senior leadership team changes which will further accelerate the company´s global growth plans by taking full advantage of the diverse and complementary experience of its senior leaders. As a result, Cliff Burrows was promoted to Group President Americas + U.S., EMEA + Teavana and John Culver was promoted to Group President China/Asia Pacific, Channel Development + Emerging Brands. In addition, Jeff Hansberry was promoted to President China/Asia Pacific.
- Towards its goal of investing in the communities where it operates, Starbucks opened its first community store outside of the U.S., in Bangkok, Thailand, where ten percent of the sale price of Starbucks hand-crafted beverage sales will be directed to the farming communities of Northern Thailand.
- The Board of Directors declared a cash dividend of 0,21 USD per share, payable on August 23, 2013, to shareholders of record as of August 08, 2013.
