Starbucks: Reports Q2 Fiscal 2023 Financial Results

Seattle / WA. (sc) Starbucks Corporation reported financial results for its 13-week fiscal second quarter ended April 02, 2023. GAAP results in fiscal 2023 and fiscal 2022 include items that are excluded from non-GAAP results. Q2 Fiscal 2023 highlights:

  • Global comparable store sales increased 11 percent, primarily driven by a 6 percent increase in comparable transactions and 4 percent increase in average ticket
    • North America comparable store sales increased 12 percent, driven by a 6 percent increase in comparable transactions and a 5 percent increase in average ticket; U.S. comparable store sales increased 12 percent, driven by a 6 percent increase in comparable transactions and a 6 percent increase in average ticket
    • International comparable store sales increased 7 percent, driven by a 7 percent increase in comparable transactions; China comparable store sales increased 3 percent, driven by a 4 percent increase in comparable transactions and a 1 percent decline in average ticket
  • The company opened 464 net new stores in Q2, inclusive of closures across North America and International as part of ongoing efforts to strengthen the portfolio, ending the period with 36,634 stores globally: 51 percent company-operated and 49 percent licensed
    • At the end of Q2, stores in the U.S. and China comprised 61 percent of the company’s global portfolio, with 16,044 and 6,243 stores in the U.S. and China, respectively
  • Consolidated net revenues up 14 percent to USD 8.7 billion, inclusive of approximately 2 percent unfavorable impact from foreign currency translation
  • GAAP operating margin of 15.2 percent increased from 12.4 percent in the prior year, primarily driven by sales leverage, pricing, productivity improvement and gain on the sale of Seattle’s Best Coffee brand. This expansion was partially offset by previously committed investments in labor, including enhanced store partner wages and benefits, increased general and administrative costs related to our Reinvention Plan as well as inflationary pressures.
    • Non-GAAP operating margin of 14.3 percent increased from 13.0 percent in the prior year
  • GAAP earnings per share of USD 0.79 grew 36 percent over prior year
    • Non-GAAP earnings per share of USD 0.74 grew 25 percent over prior year
  • Starbucks Rewards loyalty program 90-day active members in the U.S. increased to 30.8 million, up 15 percent year-over-year

«I am very pleased with our Reinvention progress and grateful for the opportunity to fully immerse into the company, which I formally took over on March 20, 2023. It is a privilege to have learned from our founder and partners around the world,» commented Laxman Narasimhan, chief executive officer. «From my immersion observations, our leadership team now has a clear line of sight into our growth headroom, as well as our opportunities to enhance margins and modernize the business, brand, partner experience and culture of Starbucks. As we strive to continue to be a different kind of company, we will unlock our limitless possibilities to meet the needs of today and, importantly, the future of Starbucks,» Narasimhan added.

«I am so proud of our outstanding second quarter performance, underscoring strength in both topline and margin globally. This momentum was made possible by the investments we are making in our stores and partners, and allowed us to continue unlocking capital to further reinvest in our business,» commented Rachel Ruggeri, chief financial officer. «As we begin on this next step in our journey, I’m confident that, together with our partners, our execution against our Reinvention plan and broader strategies will position us in our new era,» Ruggeri added.

«In support of our Reinvention Plan, and as part of our ongoing efforts to transform our store portfolio, we continue to open, close and evolve our stores as we assess, reposition and strengthen our store portfolio. We are pleased to have opened over 100 net new stores in North America during the quarter and are excited to now have nearly 17,500 stores across the segment,» commented Sara Trilling, executive vice president and president of Starbucks North America. «International added more than 360 net new stores and continues to grow in-line with our ambitious expectations,» added Michael Conway, group president, International and Channel Development.