Washington | 0-20322 | 91-1325671 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
2401 Utah Avenue South, Seattle, Washington 98134 |
(Address of principal executive offices) (Zip Code) |
(206) 447-1575 |
(Registrant’s telephone number, including area code) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition. |
Item 9.01 | Financial Statements and Exhibits. |
Exhibit No. | Description | |
99.1 | Earnings release of Starbucks Corporation dated November 3, 2016 |
STARBUCKS CORPORATION | |||
Dated: November 3, 2016 | |||
By: | /s/ Scott Maw | ||
Scott Maw | |||
executive vice president, chief financial officer |
Exhibit No. | Description | |
99.1 | Earnings release of Starbucks Corporation dated November 3, 2016 |
• | U.S. comparable store sales increase of 4% was comprised of 6% increase in average ticket and 1% decrease in traffic. After adjusting for the estimated impact of order consolidation related to the new Starbucks RewardsTM loyalty program, average ticket grew 4% and traffic grew 1%. |
• | Consolidated net revenues grew 16% to $5.7 billion |
• | Consolidated operating income increased 27% to $1.2 billion |
• | Consolidated operating margin expanded 180 basis points to 21.5% |
• | GAAP EPS increased 26% to $0.54 per share and included $0.06 related to the extra week in Q4 FY16 |
◦ | Non-GAAP EPS of $0.56 included $0.06 related to the extra week in Q4 FY16. Excluding the extra week, non-GAAP EPS of $0.50 grew 16% over Q4 FY15 non-GAAP EPS |
• | The company opened 690 net new stores in the quarter, bringing total stores to 25,085 in 75 countries worldwide |
• | Mobile Order and Pay represented 6% of U.S. transactions in the quarter, up from 5% in the prior quarter |
• | Global comparable store sales increased 5%, comprised of a 6% increase in the Americas segment and a 3% increase in the China/Asia Pacific segment. Comparable store sales in the EMEA segment were flat. |
• | Consolidated net revenues grew 11% to $21.3 billion |
• | Consolidated operating income increased 16% to $4.2 billion |
• | Consolidated operating margin expanded 80 basis points to 19.6% |
• | Company reports record 53- and 52-week, GAAP and non-GAAP revenue, operating income and operating margin |
• | GAAP EPS increased 4% to $1.90 per share and included $0.06 related to the extra week in Q4 FY16 |
◦ | Non-GAAP EPS of $1.91 included $0.06 related to the extra week in Q4 FY16. Excluding the extra week, non-GAAP EPS of $1.85 grew 17% over FY15 non-GAAP EPS |
• | The company opened 2,042 net new stores globally in fiscal 2016, including the first Starbucks stores in Cambodia, Kazakhstan, Luxembourg, Andorra, South Africa, Slovakia, and Trinidad and Tobago |
Quarter Ended Oct 2, 2016 | |||||
Comparable Store Sales(1) | Sales Growth | Change in Transactions | Change in Ticket | ||
Consolidated(2) | 4% | (1)% | 5% | ||
Americas | 5% | (1)% | 6% | ||
CAP(2) | 1% | 0% | 2% | ||
EMEA | (1)% | 0% | (1)% | ||
(1) Includes only Starbucks company-operated stores open 13 months or longer. For fiscal 2016, comparable store sales percentages were calculated excluding the 53rd week. | |||||
(2) Beginning in December of fiscal 2016, comparable store sales include the results of the 1,009 company-operated stores acquired as part of the acquisition of Starbucks Japan in the first quarter of fiscal 2015. |
Quarter Ended | Change | ||||
Operating Results | Oct 2, 2016 | Sep 27, 2015 | |||
($ in millions, except per share amounts) | (14 Weeks Ended) | (13 Weeks Ended) | |||
Net New Stores | 690 | 524 | 166 | ||
Revenues | $5,711.2 | $4,914.8 | 16% | ||
Operating Income | $1,227.5 | $969.4 | 27% | ||
Operating Margin | 21.5% | 19.7% | 180 bps | ||
EPS | $0.54 | $0.43 | 26% |
Quarter Ended | Change | ||||
Oct 2, 2016 | Sep 27, 2015 | ||||
($ in millions) | (14 Weeks Ended) | (13 Weeks Ended) | |||
Net New Stores | 307 | 233 | 74 | ||
Revenues | $3,968.1 | $3,383.8 | 17% | ||
Operating Income | $1,096.9 | $840.6 | 30% | ||
Operating Margin | 27.6% | 24.8% | 280 bps |
Quarter Ended | Change | ||||
Oct 2, 2016 | Sep 27, 2015 | ||||
($ in millions) | (14 Weeks Ended) | (13 Weeks Ended) | |||
Net New Stores | 316 | 223 | 93 | ||
Revenues | $839.2 | $652.2 | 29% | ||
Operating Income | $192.4 | $129.8 | 48% | ||
Operating Margin | 22.9% | 19.9% | 300 bps |
Quarter Ended | Change | ||||
Oct 2, 2016 | Sep 27, 2015 | ||||
($ in millions) | (14 Weeks Ended) | (13 Weeks Ended) | |||
Net New Stores | 77 | 71 | 6 | ||
Revenues | $270.2 | $308.3 | (12)% | ||
Operating Income | $45.8 | $53.1 | (14)% | ||
Operating Margin | 17.0% | 17.2% | (20) bps |
Quarter Ended | Change | ||||
Oct 2, 2016 | Sep 27, 2015 | ||||
($ in millions) | (14 Weeks Ended) | (13 Weeks Ended) | |||
Revenues | $518.5 | $456.7 | 14% | ||
Operating Income | $244.3 | $197.3 | 24% | ||
Operating Margin | 47.1% | 43.2% | 390 bps |
Quarter Ended | Change | ||||
Oct 2, 2016 | Sep 27, 2015 | ||||
($ in millions) | (14 Weeks Ended) | (13 Weeks Ended) | |||
Net New Stores | (10) | (3) | (7) | ||
Revenues | $115.2 | $113.8 | 1% | ||
Operating Loss | $(10.1) | $(17.7) | (43)% |
Year Ended Oct 2, 2016 | |||||
Comparable Store Sales(1) | Sales Growth | Change in Transactions | Change in Ticket | ||
Consolidated(2) | 5% | 1% | 4% | ||
Americas | 6% | 1% | 5% | ||
CAP(2) | 3% | 1% | 2% | ||
EMEA | 0% | 1% | 0% | ||
(1) Includes only Starbucks company-operated stores open 13 months or longer. For fiscal 2016, comparable store sales percentages were calculated excluding the 53rd week. | |||||
(2) Beginning in December of fiscal 2016, comparable store sales include the results of the 1,009 company-operated stores acquired as part of the acquisition of Starbucks Japan in the first quarter of fiscal 2015. |
Year Ended | Change | ||||
Operating Results | Oct 2, 2016 | Sep 27, 2015 | |||
($ in millions, except per share amounts) | (53 Weeks Ended) | (52 Weeks Ended) | |||
Net New Stores(1) | 2,042 | 1,677 | 365 | ||
Revenues | $21,315.9 | $19,162.7 | 11% | ||
Operating Income | $4,171.9 | $3,601.0 | 16% | ||
Operating Margin | 19.6% | 18.8% | 80 bps | ||
EPS | $1.90 | $1.82 | 4% | ||
(1) Fiscal 2015 net new stores include the closure of 132 Target Canada licensed stores. |
• | Approximately 2,100 net new stores globally |
• | Mid-single digit comparable store sales growth globally |
• | Consolidated revenue growth in the double digits |
• | GAAP EPS range of $2.09 to $2.11, non-GAAP EPS range of $2.12 to $2.14 |
• | Starbucks announced it will open its fourth Starbucks Reserve Roastery and Tasting Room in Japan in 2018. In addition to Seattle, the Tokyo location will join Roasteries in Shanghai in 2017 and New York in 2018, and will be designed in collaboration with world-renowned architect Kengo Kuma. |
• | The company entered its 75th country globally in Q4, opening its first store in the country of Trinidad and Tobago in partnership with Prestige Holdings Ltd. The company also opened its 1,000 Starbucks store in Latin America in Q4, in the Colombian city of Medellin. |
• | Effective in October, the company promoted Belinda Wong from president to chief executive officer of Starbucks China. Wong has been instrumental in Starbucks unprecedented growth in China – from 400 stores in 2011 to over 2,400 stores today. In this role, Wong will oversee Starbucks plans to open and operate 5,000 stores in China by 2021. |
• | In addition to bringing handcrafted flavor to cold coffee, Starbucks recently became the largest retailer to offer Nitro Cold Brew, an innovative new cold coffee beverage infused with nitrogen to create an ultra-creamy texture that has been enthusiastically embraced by Starbucks customers. More than 500 Starbucks stores in coffee-forward markets across the US are now including Starbucks Nitro Cold Brew on menus. |
• | In September, Starbucks debuted "Upstanders," an original series sharing real stories of humanity which aims to inspire acts of compassion, citizenship and civility. Multi-platform distribution channels were utilized, including Starbucks Mobile App and Starbucks online and in-store digital network. |
• | The company repurchased 7.3 million shares of common stock in Q4 FY16; 118 million shares remain available for purchase under current authorizations. |
• | The Board of Directors declared a cash dividend of $0.25 per share, a 25% increase, payable on December 2, 2016 to shareholders of record as of November 17, 2016. |
Starbucks Contact, Investor Relations: | Starbucks Contact, Media: | |
Tom Shaw | Alisha Damodaran | |
206-318-7118 | 206-318-7100 | |
investorrelations@starbucks.com | press@starbucks.com |
Quarter Ended | Quarter Ended | ||||||||||||||||
Oct 2, 2016 | Sep 27, 2015 | % Change | Oct 2, 2016 | Sep 27, 2015 | |||||||||||||
(14 Weeks Ended) | (13 Weeks Ended) | As a % of total net revenues | |||||||||||||||
Net revenues: | |||||||||||||||||
Company-operated stores | $ | 4,507.8 | $ | 3,886.6 | 16.0 | % | 78.9 | % | 79.1 | % | |||||||
Licensed stores | 593.2 | 481.4 | 23.2 | 10.4 | 9.8 | ||||||||||||
CPG, foodservice and other | 610.2 | 546.8 | 11.6 | 10.7 | 11.1 | ||||||||||||
Total net revenues | 5,711.2 | 4,914.8 | 16.2 | 100.0 | 100.0 | ||||||||||||
Cost of sales including occupancy costs | 2,254.2 | 1,982.6 | 13.7 | 39.5 | 40.3 | ||||||||||||
Store operating expenses | 1,562.3 | 1,378.6 | 13.3 | 27.4 | 28.0 | ||||||||||||
Other operating expenses | 122.1 | 127.9 | (4.5 | ) | 2.1 | 2.6 | |||||||||||
Depreciation and amortization expenses | 249.9 | 234.3 | 6.7 | 4.4 | 4.8 | ||||||||||||
General and administrative expenses | 401.2 | 303.9 | 32.0 | 7.0 | 6.2 | ||||||||||||
Total operating expenses | 4,589.7 | 4,027.3 | 14.0 | 80.4 | 81.9 | ||||||||||||
Income from equity investees | 106.0 | 81.9 | 29.4 | 1.9 | 1.7 | ||||||||||||
Operating income | 1,227.5 | 969.4 | 26.6 | 21.5 | 19.7 | ||||||||||||
Loss on extinguishment of debt | — | (61.1 | ) | (100.0 | ) | — | (1.2 | ) | |||||||||
Interest income and other, net | 12.5 | 6.4 | 95.3 | 0.2 | 0.1 | ||||||||||||
Interest expense | (24.7 | ) | (18.2 | ) | 35.7 | (0.4 | ) | (0.4 | ) | ||||||||
Earnings before income taxes | 1,215.3 | 896.5 | 35.6 | 21.3 | 18.2 | ||||||||||||
Income tax expense | 413.5 | 244.0 | 69.5 | 7.2 | 5.0 | ||||||||||||
Net earnings including noncontrolling interests | 801.8 | 652.5 | 22.9 | 14.0 | 13.3 | ||||||||||||
Net earnings attributable to noncontrolling interests | 0.8 | — | nm | — | — | ||||||||||||
Net earnings attributable to Starbucks | $ | 801.0 | $ | 652.5 | 22.8 | 14.0 | % | 13.3 | % | ||||||||
Net earnings per common share - diluted | $ | 0.54 | $ | 0.43 | 25.6 | % | |||||||||||
Weighted avg. shares outstanding - diluted | 1,478.4 | 1,504.5 | |||||||||||||||
Cash dividends declared per share | $ | 0.25 | $ | 0.20 | |||||||||||||
Supplemental Ratios: | |||||||||||||||||
Store operating expenses as a percentage of company-operated store revenues | 34.7 | % | 35.5 | % | |||||||||||||
Effective tax rate including noncontrolling interests | 34.0 | % | 27.2 | % |
Year Ended | Year Ended | ||||||||||||||||
Oct 2, 2016 | Sep 27, 2015 | % Change | Oct 2, 2016 | Sep 27, 2015 | |||||||||||||
(53 Weeks Ended) | (52 Weeks Ended) | As a % of total net revenues | |||||||||||||||
Net revenues: | |||||||||||||||||
Company-operated stores | $ | 16,844.1 | $ | 15,197.3 | 10.8 | % | 79.0 | % | 79.3 | % | |||||||
Licensed stores | 2,154.2 | 1,861.9 | 15.7 | 10.1 | 9.7 | ||||||||||||
CPG, foodservice and other | 2,317.6 | 2,103.5 | 10.2 | 10.9 | 11.0 | ||||||||||||
Total net revenues | 21,315.9 | 19,162.7 | 11.2 | 100.0 | 100.0 | ||||||||||||
Cost of sales including occupancy costs | 8,511.1 | 7,787.5 | 9.3 | 39.9 | 40.6 | ||||||||||||
Store operating expenses | 6,064.3 | 5,411.1 | 12.1 | 28.4 | 28.2 | ||||||||||||
Other operating expenses | 545.4 | 522.4 | 4.4 | 2.6 | 2.7 | ||||||||||||
Depreciation and amortization expenses | 980.8 | 893.9 | 9.7 | 4.6 | 4.7 | ||||||||||||
General and administrative expenses | 1,360.6 | 1,196.7 | 13.7 | 6.4 | 6.2 | ||||||||||||
Total operating expenses | 17,462.2 | 15,811.6 | 10.4 | 81.9 | 82.5 | ||||||||||||
Income from equity investees | 318.2 | 249.9 | 27.3 | 1.5 | 1.3 | ||||||||||||
Operating income | 4,171.9 | 3,601.0 | 15.9 | 19.6 | 18.8 | ||||||||||||
Gain resulting from acquisition of joint venture | — | 390.6 | (100.0 | ) | — | 2.0 | |||||||||||
Loss on extinguishment of debt | — | (61.1 | ) | (100.0 | ) | — | (0.3 | ) | |||||||||
Interest income and other, net | 108.0 | 43.0 | 151.2 | 0.5 | 0.2 | ||||||||||||
Interest expense | (81.3 | ) | (70.5 | ) | 15.3 | (0.4 | ) | (0.4 | ) | ||||||||
Earnings before income taxes | 4,198.6 | 3,903.0 | 7.6 | 19.7 | 20.4 | ||||||||||||
Income tax expense | 1,379.7 | 1,143.7 | 20.6 | 6.5 | 6.0 | ||||||||||||
Net earnings including noncontrolling interests | 2,818.9 | 2,759.3 | 2.2 | 13.2 | 14.4 | ||||||||||||
Net earnings attributable to noncontrolling interests | 1.2 | 1.9 | (36.8 | ) | — | — | |||||||||||
Net earnings attributable to Starbucks | $ | 2,817.7 | $ | 2,757.4 | 2.2 | % | 13.2 | % | 14.4 | % | |||||||
Net earnings per common share - diluted | $ | 1.90 | $ | 1.82 | 4.4 | % | |||||||||||
Weighted avg. shares outstanding - diluted | 1,486.7 | 1,513.4 | |||||||||||||||
Cash dividends declared per share | $ | 0.85 | $ | 0.68 | |||||||||||||
Supplemental Ratios: | |||||||||||||||||
Store operating expenses as a percentage of company-operated store revenues | 36.0 | % | 35.6 | % | |||||||||||||
Effective tax rate including noncontrolling interests | 32.9 | % | 29.3 | % |
Oct 2, 2016 | Sep 27, 2015 | % Change | Oct 2, 2016 | Sep 27, 2015 | |||||||||||||
Quarter Ended | (14 Weeks Ended) | (13 Weeks Ended) | As a % of Americas total net revenues | ||||||||||||||
Net revenues: | |||||||||||||||||
Company-operated stores | $ | 3,550.1 | $ | 3,035.0 | 17.0 | % | 89.5 | % | 89.7 | % | |||||||
Licensed stores | 410.5 | 341.4 | 20.2 | 10.3 | 10.1 | ||||||||||||
Foodservice and other | 7.5 | 7.4 | 1.4 | 0.2 | 0.2 | ||||||||||||
Total net revenues | 3,968.1 | 3,383.8 | 17.3 | 100.0 | 100.0 | ||||||||||||
Cost of sales including occupancy costs | 1,406.0 | 1,220.6 | 15.2 | 35.4 | 36.1 | ||||||||||||
Store operating expenses | 1,259.7 | 1,111.8 | 13.3 | 31.7 | 32.9 | ||||||||||||
Other operating expenses | 10.2 | 29.4 | (65.3 | ) | 0.3 | 0.9 | |||||||||||
Depreciation and amortization expenses | 148.5 | 135.8 | 9.4 | 3.7 | 4.0 | ||||||||||||
General and administrative expenses | 46.8 | 45.6 | 2.6 | 1.2 | 1.3 | ||||||||||||
Total operating expenses | 2,871.2 | 2,543.2 | 12.9 | 72.4 | 75.2 | ||||||||||||
Operating income | $ | 1,096.9 | $ | 840.6 | 30.5 | % | 27.6 | % | 24.8 | % | |||||||
Supplemental Ratios: | |||||||||||||||||
Store operating expenses as a percentage of company-operated store revenues | 35.5 | % | 36.6 | % | |||||||||||||
Oct 2, 2016 | Sep 27, 2015 | % Change | Oct 2, 2016 | Sep 27, 2015 | |||||||||||||
Year Ended | (53 Weeks Ended) | (52 Weeks Ended) | As a % of Americas total net revenues | ||||||||||||||
Net revenues: | |||||||||||||||||
Company-operated stores | $ | 13,247.4 | $ | 11,925.6 | 11.1 | % | 89.5 | % | 89.7 | % | |||||||
Licensed stores | 1,518.5 | 1,334.4 | 13.8 | 10.3 | 10.0 | ||||||||||||
Foodservice and other | 29.5 | 33.4 | (11.7 | ) | 0.2 | 0.3 | |||||||||||
Total net revenues | 14,795.4 | 13,293.4 | 11.3 | 100.0 | 100.0 | ||||||||||||
Cost of sales including occupancy costs | 5,271.9 | 4,845.0 | 8.8 | 35.6 | 36.4 | ||||||||||||
Store operating expenses | 4,909.3 | 4,387.9 | 11.9 | 33.2 | 33.0 | ||||||||||||
Other operating expenses | 96.0 | 122.8 | (21.8 | ) | 0.6 | 0.9 | |||||||||||
Depreciation and amortization expenses | 590.1 | 522.3 | 13.0 | 4.0 | 3.9 | ||||||||||||
General and administrative expenses | 186.1 | 192.1 | (3.1 | ) | 1.3 | 1.4 | |||||||||||
Total operating expenses | 11,053.4 | 10,070.1 | 9.8 | 74.7 | 75.8 | ||||||||||||
Operating income | $ | 3,742.0 | $ | 3,223.3 | 16.1 | % | 25.3 | % | 24.2 | % | |||||||
Supplemental Ratios: | |||||||||||||||||
Store operating expenses as a percentage of company-operated store revenues | 37.1 | % | 36.8 | % |
Oct 2, 2016 | Sep 27, 2015 | % Change | Oct 2, 2016 | Sep 27, 2015 | |||||||||||||
Quarter Ended | (14 Weeks Ended) | (13 Weeks Ended) | As a % of CAP total net revenues | ||||||||||||||
Net revenues: | |||||||||||||||||
Company-operated stores | $ | 756.4 | $ | 584.8 | 29.3 | % | 90.1 | % | 89.7 | % | |||||||
Licensed stores | 81.6 | 66.7 | 22.3 | 9.7 | 10.2 | ||||||||||||
Foodservice and other | 1.2 | 0.7 | 71.4 | 0.1 | 0.1 | ||||||||||||
Total net revenues | 839.2 | 652.2 | 28.7 | 100.0 | 100.0 | ||||||||||||
Cost of sales including occupancy costs | 363.2 | 286.7 | 26.7 | 43.3 | 44.0 | ||||||||||||
Store operating expenses | 221.4 | 173.8 | 27.4 | 26.4 | 26.6 | ||||||||||||
Other operating expenses | 22.1 | 18.8 | 17.6 | 2.6 | 2.9 | ||||||||||||
Depreciation and amortization expenses | 48.9 | 44.4 | 10.1 | 5.8 | 6.8 | ||||||||||||
General and administrative expenses | 37.2 | 32.4 | 14.8 | 4.4 | 5.0 | ||||||||||||
Total operating expenses | 692.8 | 556.1 | 24.6 | 82.6 | 85.3 | ||||||||||||
Income from equity investees | 46.0 | 33.7 | 36.5 | 5.5 | 5.2 | ||||||||||||
Operating income | $ | 192.4 | $ | 129.8 | 48.2 | % | 22.9 | % | 19.9 | % | |||||||
Supplemental Ratios: | |||||||||||||||||
Store operating expenses as a percentage of company-operated store revenues | 29.3 | % | 29.7 | % | |||||||||||||
Oct 2, 2016 | Sep 27, 2015 | % Change | Oct 2, 2016 | Sep 27, 2015 | |||||||||||||
Year Ended | (53 Weeks Ended) | (52 Weeks Ended) | As a % of CAP total net revenues | ||||||||||||||
Net revenues: | |||||||||||||||||
Company-operated stores | $ | 2,640.4 | $ | 2,127.3 | 24.1 | % | 89.8 | % | 88.8 | % | |||||||
Licensed stores | 292.3 | 264.4 | 10.6 | 9.9 | 11.0 | ||||||||||||
Foodservice and other | 6.1 | 4.2 | 45.2 | 0.2 | 0.2 | ||||||||||||
Total net revenues | 2,938.8 | 2,395.9 | 22.7 | 100.0 | 100.0 | ||||||||||||
Cost of sales including occupancy costs | 1,296.7 | 1,071.5 | 21.0 | 44.1 | 44.7 | ||||||||||||
Store operating expenses | 779.4 | 609.8 | 27.8 | 26.5 | 25.5 | ||||||||||||
Other operating expenses | 70.3 | 62.2 | 13.0 | 2.4 | 2.6 | ||||||||||||
Depreciation and amortization expenses | 180.6 | 150.7 | 19.8 | 6.1 | 6.3 | ||||||||||||
General and administrative expenses | 130.3 | 120.8 | 7.9 | 4.4 | 5.0 | ||||||||||||
Total operating expenses | 2,457.3 | 2,015.0 | 22.0 | 83.6 | 84.1 | ||||||||||||
Income from equity investees | 150.1 | 119.6 | 25.5 | 5.1 | 5.0 | ||||||||||||
Operating income | $ | 631.6 | $ | 500.5 | 26.2 | % | 21.5 | % | 20.9 | % | |||||||
Supplemental Ratios: | |||||||||||||||||
Store operating expenses as a percentage of company-operated store revenues | 29.5 | % | 28.7 | % |
Oct 2, 2016 | Sep 27, 2015 | % Change | Oct 2, 2016 | Sep 27, 2015 | |||||||||||||
Quarter Ended | (14 Weeks Ended) | (13 Weeks Ended) | As a % of EMEA total net revenues | ||||||||||||||
Net revenues: | |||||||||||||||||
Company-operated stores | $ | 156.0 | $ | 223.2 | (30.1 | )% | 57.7 | % | 72.4 | % | |||||||
Licensed stores | 100.2 | 71.8 | 39.6 | 37.1 | 23.3 | ||||||||||||
Foodservice | 14.0 | 13.3 | 5.3 | 5.2 | 4.3 | ||||||||||||
Total net revenues | 270.2 | 308.3 | (12.4 | ) | 100.0 | 100.0 | |||||||||||
Cost of sales including occupancy costs | 137.7 | 148.1 | (7.0 | ) | 51.0 | 48.0 | |||||||||||
Store operating expenses | 51.2 | 68.3 | (25.0 | ) | 18.9 | 22.2 | |||||||||||
Other operating expenses | 15.0 | 11.8 | 27.1 | 5.6 | 3.8 | ||||||||||||
Depreciation and amortization expenses | 8.4 | 13.1 | (35.9 | ) | 3.1 | 4.2 | |||||||||||
General and administrative expenses | 12.1 | 15.0 | (19.3 | ) | 4.5 | 4.9 | |||||||||||
Total operating expenses | 224.4 | 256.3 | (12.4 | ) | 83.0 | 83.1 | |||||||||||
Income from equity investees | — | 1.1 | (100.0 | ) | — | 0.4 | |||||||||||
Operating income | $ | 45.8 | $ | 53.1 | (13.7 | )% | 17.0 | % | 17.2 | % | |||||||
Supplemental Ratios: | |||||||||||||||||
Store operating expenses as a percentage of company-operated store revenues | 32.8 | % | 30.6 | % | |||||||||||||
Oct 2, 2016 | Sep 27, 2015 | % Change | Oct 2, 2016 | Oct 2, 2016 | |||||||||||||
Year Ended | (53 Weeks Ended) | (52 Weeks Ended) | As a % of EMEA total net revenues | ||||||||||||||
Net revenues: | |||||||||||||||||
Company-operated stores | $ | 732.0 | $ | 911.2 | (19.7 | )% | 65.1 | % | 74.9 | % | |||||||
Licensed stores | 339.5 | 257.2 | 32.0 | 30.2 | 21.1 | ||||||||||||
Foodservice | 53.4 | 48.3 | 10.6 | 4.7 | 4.0 | ||||||||||||
Total net revenues | 1,124.9 | 1,216.7 | (7.5 | ) | 100.0 | 100.0 | |||||||||||
Cost of sales including occupancy costs | 565.0 | 582.5 | (3.0 | ) | 50.2 | 47.9 | |||||||||||
Store operating expenses | 260.6 | 308.7 | (15.6 | ) | 23.2 | 25.4 | |||||||||||
Other operating expenses | 57.0 | 51.8 | 10.0 | 5.1 | 4.3 | ||||||||||||
Depreciation and amortization expenses | 40.8 | 52.0 | (21.5 | ) | 3.6 | 4.3 | |||||||||||
General and administrative expenses | 51.4 | 56.6 | (9.2 | ) | 4.6 | 4.7 | |||||||||||
Total operating expenses | 974.8 | 1,051.6 | (7.3 | ) | 86.7 | 86.4 | |||||||||||
Income from equity investees | 1.5 | 3.1 | (51.6 | ) | 0.1 | 0.3 | |||||||||||
Operating income | $ | 151.6 | $ | 168.2 | (9.9 | )% | 13.5 | % | 13.8 | % | |||||||
Supplemental Ratios: | |||||||||||||||||
Store operating expenses as a percentage of company-operated store revenues | 35.6 | % | 33.9 | % |
Oct 2, 2016 | Sep 27, 2015 | % Change | Oct 2, 2016 | Sep 27, 2015 | |||||||||||||
Quarter Ended | (14 Weeks Ended) | (13 Weeks Ended) | As a % of Channel Development total net revenues | ||||||||||||||
Net revenues: | |||||||||||||||||
CPG | $ | 401.7 | $ | 353.2 | 13.7 | % | 77.5 | % | 77.3 | % | |||||||
Foodservice | 116.8 | 103.5 | 12.9 | 22.5 | 22.7 | ||||||||||||
Total net revenues | 518.5 | 456.7 | 13.5 | 100.0 | 100.0 | ||||||||||||
Cost of sales | 271.9 | 252.6 | 7.6 | 52.4 | 55.3 | ||||||||||||
Other operating expenses | 56.7 | 49.6 | 14.3 | 10.9 | 10.9 | ||||||||||||
Depreciation and amortization expenses | 0.7 | 0.7 | — | 0.1 | 0.2 | ||||||||||||
General and administrative expenses | 4.9 | 3.6 | 36.1 | 0.9 | 0.8 | ||||||||||||
Total operating expenses | 334.2 | 306.5 | 9.0 | 64.5 | 67.1 | ||||||||||||
Income from equity investees | 60.0 | 47.1 | 27.4 | 11.6 | 10.3 | ||||||||||||
Operating income | $ | 244.3 | $ | 197.3 | 23.8 | % | 47.1 | % | 43.2 | % | |||||||
Oct 2, 2016 | Sep 27, 2015 | % Change | Oct 2, 2016 | Sep 27, 2015 | |||||||||||||
Year Ended | (53 Weeks Ended) | (52 Weeks Ended) | As a % of Channel Development total net revenues | ||||||||||||||
Net revenues: | |||||||||||||||||
CPG | $ | 1,488.2 | $ | 1,329.0 | 12.0 | % | 77.0 | % | 76.8 | % | |||||||
Foodservice | 444.3 | 401.9 | 10.5 | 23.0 | 23.2 | ||||||||||||
Total net revenues | 1,932.5 | 1,730.9 | 11.6 | 100.0 | 100.0 | ||||||||||||
Cost of sales | 1,042.6 | 974.8 | 7.0 | 54.0 | 56.3 | ||||||||||||
Other operating expenses | 228.5 | 210.5 | 8.6 | 11.8 | 12.2 | ||||||||||||
Depreciation and amortization expenses | 2.8 | 2.7 | 3.7 | 0.1 | 0.2 | ||||||||||||
General and administrative expenses | 17.9 | 16.2 | 10.5 | 0.9 | 0.9 | ||||||||||||
Total operating expenses | 1,291.8 | 1,204.2 | 7.3 | 66.8 | 69.6 | ||||||||||||
Income from equity investees | 166.6 | 127.2 | 31.0 | 8.6 | 7.3 | ||||||||||||
Operating income | $ | 807.3 | $ | 653.9 | 23.5 | % | 41.8 | % | 37.8 | % |
Oct 2, 2016 | Sep 27, 2015 | % Change | ||||||||
Quarter Ended | (14 Weeks Ended) | (13 Weeks Ended) | ||||||||
Net revenues: | ||||||||||
Company-operated stores | $ | 45.3 | $ | 43.6 | 3.9 | % | ||||
Licensed stores | 0.9 | 1.5 | (40.0 | ) | ||||||
CPG, foodservice and other | 69.0 | 68.7 | 0.4 | |||||||
Total net revenues | 115.2 | 113.8 | 1.2 | |||||||
Cost of sales including occupancy costs | 69.9 | 74.0 | (5.5 | ) | ||||||
Store operating expenses | 30.0 | 24.7 | 21.5 | |||||||
Other operating expenses | 16.1 | 19.3 | (16.6 | ) | ||||||
Depreciation and amortization expenses | 3.1 | 4.2 | (26.2 | ) | ||||||
General and administrative expenses | 6.2 | 9.3 | (33.3 | ) | ||||||
Total operating expenses | 125.3 | 131.5 | (4.7 | ) | ||||||
Operating loss | $ | (10.1 | ) | $ | (17.7 | ) | (42.9 | )% | ||
Oct 2, 2016 | Sep 27, 2015 | % Change | ||||||||
Year Ended | (53 Weeks Ended) | (52 Weeks Ended) | ||||||||
Net revenues: | ||||||||||
Company-operated stores | $ | 224.3 | $ | 233.2 | (3.8 | )% | ||||
Licensed stores | 3.9 | 5.9 | (33.9 | ) | ||||||
CPG, foodservice and other | 296.1 | 286.7 | 3.3 | |||||||
Total net revenues | 524.3 | 525.8 | (0.3 | ) | ||||||
Cost of sales including occupancy costs | 316.5 | 316.5 | — | |||||||
Store operating expenses | 115.0 | 104.7 | 9.8 | |||||||
Other operating expenses | 91.4 | 76.5 | 19.5 | |||||||
Depreciation and amortization expenses | 13.3 | 16.3 | (18.4 | ) | ||||||
General and administrative expenses | 26.5 | 36.6 | (27.6 | ) | ||||||
Total operating expenses | 562.7 | 550.6 | 2.2 | |||||||
Operating loss | $ | (38.4 | ) | $ | (24.8 | ) | 54.8 | % |
STARBUCKS CORPORATION CONSOLIDATED BALANCE SHEETS (in millions, except per share data) (unaudited) | |||||||
Oct 2, 2016 | Sep 27, 2015 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 2,128.8 | $ | 1,530.1 | |||
Short-term investments | 134.4 | 81.3 | |||||
Accounts receivable, net | 768.8 | 719.0 | |||||
Inventories | 1,378.5 | 1,306.4 | |||||
Prepaid expenses and other current assets | 350.0 | 334.2 | |||||
Total current assets | 4,760.5 | 3,971.0 | |||||
Long-term investments | 1,141.7 | 312.5 | |||||
Equity and cost investments | 354.5 | 352.0 | |||||
Property, plant and equipment, net | 4,533.8 | 4,088.3 | |||||
Deferred income taxes, net | 885.4 | 1,180.8 | |||||
Other long-term assets | 417.7 | 415.9 | |||||
Other intangible assets | 516.3 | 520.4 | |||||
Goodwill | 1,719.6 | 1,575.4 | |||||
TOTAL ASSETS | $ | 14,329.5 | $ | 12,416.3 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 730.6 | $ | 684.2 | |||
Accrued liabilities | 1,999.1 | 1,755.3 | |||||
Insurance reserves | 246.0 | 224.8 | |||||
Stored value card liability | 1,171.2 | 983.8 | |||||
Current portion of long-term debt | 400.0 | — | |||||
Total current liabilities | 4,546.9 | 3,648.1 | |||||
Long-term debt | 3,202.2 | 2,347.5 | |||||
Other long-term liabilities | 689.7 | 600.9 | |||||
Total liabilities | 8,438.8 | 6,596.5 | |||||
Shareholders’ equity: | |||||||
Common stock ($0.001 par value) — authorized, 2,400.0 shares; issued and outstanding, 1,460.5 and 1,485.1 shares, respectively | 1.5 | 1.5 | |||||
Additional paid-in capital | 41.1 | 41.1 | |||||
Retained earnings | 5,949.8 | 5,974.8 | |||||
Accumulated other comprehensive loss | (108.4 | ) | (199.4 | ) | |||
Total shareholders’ equity | 5,884.0 | 5,818.0 | |||||
Noncontrolling interests | 6.7 | 1.8 | |||||
Total equity | 5,890.7 | 5,819.8 | |||||
TOTAL LIABILITIES AND EQUITY | $ | 14,329.5 | $ | 12,416.3 |
STARBUCKS CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited and in millions) | |||||||||||
Fiscal Year Ended | Oct 2, 2016 | Sep 27, 2015 | Sep 28, 2014 | ||||||||
OPERATING ACTIVITIES: | |||||||||||
Net earnings including noncontrolling interests | $ | 2,818.9 | $ | 2,759.3 | $ | 2,067.7 | |||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 1,030.1 | 933.8 | 748.4 | ||||||||
Deferred income taxes, net | 265.7 | 21.2 | 10.2 | ||||||||
Income earned from equity method investees | (250.2 | ) | (190.2 | ) | (182.7 | ) | |||||
Distributions received from equity method investees | 223.3 | 148.2 | 139.2 | ||||||||
Gain resulting from acquisition/sale of equity in joint ventures and certain retail operations | (6.1 | ) | (394.3 | ) | (70.2 | ) | |||||
Loss on extinguishment of debt | — | 61.1 | — | ||||||||
Stock-based compensation | 218.1 | 209.8 | 183.2 | ||||||||
Excess tax benefit on share-based awards | (122.8 | ) | (132.4 | ) | (114.4 | ) | |||||
Other | 45.1 | 53.8 | 36.2 | ||||||||
Cash provided by changes in operating assets and liabilities: | |||||||||||
Accounts receivable | (55.6 | ) | (82.8 | ) | (79.7 | ) | |||||
Inventories | (67.5 | ) | (207.9 | ) | 14.3 | ||||||
Accounts payable | 46.9 | 137.7 | 60.4 | ||||||||
Accrued litigation charge | — | — | (2,763.9 | ) | |||||||
Stored value card liability | 180.4 | 170.3 | 140.8 | ||||||||
Other operating assets and liabilities | 248.8 | 261.5 | 418.3 | ||||||||
Net cash provided by operating activities | 4,575.1 | 3,749.1 | 607.8 | ||||||||
INVESTING ACTIVITIES: | |||||||||||
Purchases of investments | (1,585.7 | ) | (567.4 | ) | (1,652.5 | ) | |||||
Sales of investments | 680.7 | 600.6 | 1,454.8 | ||||||||
Maturities and calls of investments | 27.9 | 18.8 | 456.1 | ||||||||
Acquisitions, net of cash acquired | — | (284.3 | ) | — | |||||||
Additions to property, plant and equipment | (1,440.3 | ) | (1,303.7 | ) | (1,160.9 | ) | |||||
Net proceeds from sale of equity in joint ventures and certain retail operations | 69.6 | 8.9 | 103.9 | ||||||||
Other | 24.9 | 6.8 | (19.1 | ) | |||||||
Net cash used by investing activities | (2,222.9 | ) | (1,520.3 | ) | (817.7 | ) | |||||
FINANCING ACTIVITIES: | |||||||||||
Proceeds from issuance of long-term debt | 1,254.5 | 848.5 | 748.5 | ||||||||
Repayments of long-term debt | — | (610.1 | ) | — | |||||||
Cash used for purchase of non-controlling interest | — | (360.8 | ) | — | |||||||
Proceeds from issuance of common stock | 160.7 | 191.8 | 139.7 | ||||||||
Excess tax benefit on share-based awards | 122.8 | 132.4 | 114.4 | ||||||||
Cash dividends paid | (1,178.0 | ) | (928.6 | ) | (783.1 | ) | |||||
Repurchase of common stock | (1,995.6 | ) | (1,436.1 | ) | (758.6 | ) | |||||
Minimum tax withholdings on share-based awards | (106.0 | ) | (75.5 | ) | (77.3 | ) | |||||
Other | (8.4 | ) | (18.1 | ) | (6.9 | ) | |||||
Net cash used by financing activities | (1,750.0 | ) | (2,256.5 | ) | (623.3 | ) | |||||
Effect of exchange rate changes on cash and cash equivalents | (3.5 | ) | (150.6 | ) | (34.1 | ) | |||||
Net increase/(decrease) in cash and cash equivalents | 598.7 | (178.3 | ) | (867.3 | ) | ||||||
CASH AND CASH EQUIVALENTS: | |||||||||||
Beginning of period | 1,530.1 | 1,708.4 | 2,575.7 | ||||||||
End of period | $ | 2,128.8 | $ | 1,530.1 | $ | 1,708.4 | |||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | |||||||||||
Cash paid during the period for: | |||||||||||
Interest, net of capitalized interest | $ | 74.7 | $ | 69.5 | $ | 56.2 | |||||
Income taxes, net of refunds | $ | 878.7 | $ | 1,072.2 | $ | 766.3 |
Quarter Ended | |||||
($ in millions) | Oct 2, 2016 | Sep 27, 2015 | Change | ||
Revenues(1) | $3,615.5 | $3,073.0 | 18% | ||
Comparable Store Sales Growth(2) | 4% | 9% | |||
Change in Transactions | (1)% | 4% | |||
Change in Ticket | 6% | 5% |
(1) | The fiscal year ended on October 2, 2016 included 53 weeks, with the 53rd week falling in our fourth fiscal quarter. |
(2) | Includes only Starbucks company-operated stores open 13 months or longer. For fiscal 2016, comparable store sales percentages were calculated excluding the 53rd week. |
Net stores opened/(closed) and transferred during the period | |||||||||||||||||
Quarter Ended | Year Ended | Stores open as of | |||||||||||||||
Oct 2, 2016 | Sep 27, 2015 | Oct 2, 2016 | Sep 27, 2015 | Oct 2, 2016 | Sep 27, 2015 | ||||||||||||
(14 Weeks Ended) | (13 Weeks Ended) | (53 Weeks Ended) | (52 Weeks Ended) | ||||||||||||||
Americas(1): | |||||||||||||||||
Company-operated stores | 144 | 89 | 348 | 276 | 9,019 | 8,671 | |||||||||||
Licensed stores | 163 | 144 | 456 | 336 | 6,588 | 6,132 | |||||||||||
Total Americas | 307 | 233 | 804 | 612 | 15,607 | 14,803 | |||||||||||
China/Asia Pacific(2): | |||||||||||||||||
Company-operated stores | 136 | 101 | 359 | 1,320 | 2,811 | 2,452 | |||||||||||
Licensed stores | 180 | 122 | 622 | (482 | ) | 3,632 | 3,010 | ||||||||||
Total China/Asia Pacific | 316 | 223 | 981 | 838 | 6,443 | 5,462 | |||||||||||
EMEA(3): | |||||||||||||||||
Company-operated stores | (18 | ) | (47 | ) | (214 | ) | (80 | ) | 523 | 737 | |||||||
Licensed stores | 95 | 118 | 494 | 302 | 2,119 | 1,625 | |||||||||||
Total EMEA | 77 | 71 | 280 | 222 | 2,642 | 2,362 | |||||||||||
All Other Segments: | |||||||||||||||||
Company-operated stores | (7 | ) | (3 | ) | (17 | ) | 6 | 358 | 375 | ||||||||
Licensed stores | (3 | ) | — | (6 | ) | (1 | ) | 35 | 41 | ||||||||
Total All Other Segments | (10 | ) | (3 | ) | (23 | ) | 5 | 393 | 416 | ||||||||
Total Company | 690 | 524 | 2,042 | 1,677 | 25,085 | 23,043 |
(1) | Americas store data includes the closure of 132 Target Canada licensed stores in the second quarter of fiscal 2015. |
(2) | China/Asia Pacific store data includes the transfer of 1,009 Japan stores from licensed stores to company-operated as a result of the acquisition of Starbucks Japan in the first quarter of fiscal 2015. |
(3) | EMEA store data includes the transfer of 144 Germany company-operated retail stores to licensed stores as a result of the sale to AmRest Holdings SE in the third quarter of fiscal 2016. |
Quarter Ended | |||||||||
Oct 2, 2016 | Sep 27, 2015 | Change | |||||||
(14 Weeks Ended) | (13 Weeks Ended) | ||||||||
Consolidated | |||||||||
Operating income, as reported (GAAP) | $ | 1,227.5 | $ | 969.4 | 26.6% | ||||
Starbucks Japan acquisition-related items - other(1) | 16.7 | 11.9 | |||||||
Non-GAAP operating income | $ | 1,244.2 | $ | 981.3 | 26.8% | ||||
Operating margin, as reported (GAAP) | 21.5 | % | 19.7 | % | 180 bps | ||||
Starbucks Japan acquisition-related items - other(1) | 0.3 | 0.2 | |||||||
Non-GAAP operating margin | 21.8 | % | 20.0 | % | 180 bps | ||||
Diluted net earnings per share, as reported (GAAP) | $ | 0.54 | $ | 0.43 | 25.6% | ||||
Starbucks Japan acquisition-related items - other(1) | 0.01 | 0.01 | |||||||
Debt extinguishment-related items(2) | — | 0.04 | |||||||
Costs incurred on sale of Germany retail operations(3) | 0.02 | — | |||||||
Income tax effect on Non-GAAP adjustments(4) | (0.01 | ) | (0.02 | ) | |||||
Other tax matters(5) | — | (0.04 | ) | ||||||
Non-GAAP net earnings per share | $ | 0.56 | $ | 0.43 | 30.2% | ||||
Impact of the extra week- Q4 FY16 | (0.09 | ) | — | ||||||
Income tax effect on the impact of the extra week- Q4 FY16(4) | 0.03 | — | |||||||
Non-GAAP net earnings per share (13-week basis) | $ | 0.50 | $ | 0.43 | 16.3% | ||||
China/Asia Pacific (CAP) | |||||||||
Operating income, as reported (GAAP) | $ | 192.4 | $ | 129.8 | 48.2% | ||||
Starbucks Japan acquisition-related items(6) | 14.3 | 11.0 | |||||||
Non-GAAP operating income | $ | 206.7 | $ | 140.8 | 46.8% | ||||
Operating margin, as reported (GAAP) | 22.9 | % | 19.9 | % | 300 bps | ||||
Starbucks Japan acquisition-related items(6) | 1.7 | 1.7 | |||||||
Non-GAAP operating margin | 24.6 | % | 21.6 | % | 300 bps |
(1) | Includes ongoing amortization expense of acquired intangible assets and transaction and integration costs, such as incremental information technology ("IT") and compensation-related costs associated with the acquisition. |
(2) | Represents the loss on extinguishment of debt ($61.1M), which is comprised of the cost of the optional redemption provision, unamortized debt issuance costs, and unamortized discount associated with the $550 million of 6.250% 2017 Senior Notes redeemed in Q4 FY15, as well as the related unamortized interest rate hedge loss ($2.0M), which was recorded in interest expense. |
(3) | Includes additional costs incurred in Q4 FY16 associated with the sale of Germany retail operations. |
(4) | Income tax effect on non-GAAP adjustments was determined based on the nature of the underlying items and their relevant jurisdictional tax rates. |
(5) | Other tax matters include the incremental benefit from additional domestic manufacturing deductions claimed in our U.S. consolidated tax returns for periods prior to Q4 FY15. |
(6) | Includes ongoing amortization expense of acquired intangible assets associated with the acquisition; Q4 FY16 also includes post-acquisition integration costs, such as compensation-related costs. |
Year Ended | |||||||||
Oct 2, 2016 | Sep 27, 2015 | Change | |||||||
(53 Weeks Ended) | (52 Weeks Ended) | ||||||||
Consolidated | |||||||||
Operating income, as reported (GAAP) | $ | 4,171.9 | $ | 3,601.0 | 15.9% | ||||
Starbucks Japan acquisition-related items - other(1) | 57.4 | 54.6 | |||||||
Costs incurred on sale of Germany retail operations(2) | 2.8 | — | |||||||
Non-GAAP operating income | $ | 4,232.1 | $ | 3,655.6 | 15.8% | ||||
Operating margin, as reported (GAAP) | 19.6 | % | 18.8 | % | 80 bps | ||||
Starbucks Japan acquisition-related items - other(1) | 0.3 | 0.3 | |||||||
Costs incurred on sale of Germany retail operations(2) | — | — | |||||||
Non-GAAP operating margin | 19.9 | % | 19.1 | % | 80 bps | ||||
Diluted net earnings per share, as reported (GAAP) | $ | 1.90 | $ | 1.82 | 4.4% | ||||
Starbucks Japan acquisition-related items - gain(3) | — | (0.26 | ) | ||||||
Starbucks Japan acquisition-related items - other(1) | 0.04 | 0.04 | |||||||
Debt extinguishment-related items(4) | — | 0.04 | |||||||
Gain on sale of Germany retail operations(2) | — | — | |||||||
Income tax effect on Non-GAAP adjustments(5) | (0.01 | ) | (0.02 | ) | |||||
Other tax matters(6) | (0.01 | ) | (0.04 | ) | |||||
Non-GAAP net earnings per share | $ | 1.91 | $ | 1.58 | 20.9% | ||||
Impact of the extra week- Q4 FY16 | (0.09 | ) | — | ||||||
Income tax effect on the impact of the extra week- Q4 FY16(5) | 0.03 | — | |||||||
Non-GAAP net earnings per share (52-week basis) | $ | 1.85 | $ | 1.58 | 17.1% | ||||
China/Asia Pacific (CAP) | |||||||||
Operating income, as reported (GAAP) | $ | 631.6 | $ | 500.5 | 26.2% | ||||
Starbucks Japan acquisition-related items(7) | 53.3 | 41.0 | |||||||
Non-GAAP operating income | $ | 684.9 | $ | 541.5 | 26.5% | ||||
Operating margin, as reported (GAAP) | 21.5 | % | 20.9 | % | 60 bps | ||||
Starbucks Japan acquisition-related items(7) | 1.8 | 1.7 | |||||||
Non-GAAP operating margin | 23.3 | % | 22.6 | % | 70 bps | ||||
EMEA | |||||||||
Operating income, as reported (GAAP) | $ | 151.6 | $ | 168.2 | (9.9)% | ||||
Costs incurred on sale of Germany retail operations(2) | 2.8 | — | |||||||
Non-GAAP operating income | $ | 154.4 | $ | 168.2 | (8.2)% | ||||
Operating margin, as reported (GAAP) | 13.5 | % | 13.8 | % | (30) bps | ||||
Costs incurred on sale of Germany retail operations(2) | 0.2 | — | |||||||
Non-GAAP operating margin | 13.7 | % | 13.8 | % | (10) bps |
(1) | Includes ongoing amortization expense of acquired intangible assets and transaction and integration costs, such as incremental information technology ("IT") and compensation-related costs associated with the acquisition. |
(2) | Gain on sale of Germany retail operations is net of certain costs incurred in both Q3 and Q4 FY16 associated with the transfer of these stores to licensed stores. Costs that impacted our operating results are adjusted for in Consolidated and EMEA non-GAAP operating income and operating margin. |
(3) | Gain represents the fair value adjustment of Starbucks preexisting 39.5% ownership interest in Starbucks Japan upon acquisition. |
(4) | Represents the loss on extinguishment of debt ($61.1M), which is comprised of the cost of the optional redemption provision, unamortized debt issuance costs, and unamortized discount associated with the $550 million of 6.250% 2017 Senior Notes redeemed in Q4 FY15, as well as the related unamortized interest rate hedge loss ($2.0M), which was recorded in interest expense. |
(5) | Income tax effect on non-GAAP adjustments was determined based on the nature of the underlying items and their relevant jurisdictional tax rates. |
(6) | Other tax matters include the incremental benefit from additional domestic manufacturing deductions claimed in our U.S. consolidated tax returns for periods prior to the years presented. |
(7) | Includes ongoing amortization expense of acquired intangible assets associated with the acquisition; FY16 also includes post-acquisition integration costs, including incremental IT and compensation-related costs. |
Year Ended | ||||||||
Oct 1, 2017 | Oct 2, 2016 | |||||||
Consolidated | (Projected 52 Weeks Ended) | (As Reported, 53 Weeks Ended) | Change | |||||
Diluted net earnings per share (GAAP) | $2.09 - $2.11 | $ | 1.90 | 10% - 11% | ||||
Starbucks Japan acquisition-related items - other(1) | 0.05 | 0.04 | ||||||
Sale of Germany retail operations(2) | — | — | ||||||
Income tax effect on Non-GAAP adjustments(3) | (0.01 | ) | (0.01 | ) | ||||
Other tax matters(4) | — | (0.01 | ) | |||||
Non-GAAP net earnings per share | $2.12 - $2.14 | $ | 1.91 | 11% - 12% | ||||
Impact of the extra week- Q4 FY16 | — | (0.09 | ) | |||||
Income tax effect on the impact of the extra week- Q4 FY16(3) | — | 0.03 | ||||||
Non-GAAP net earnings per share (52-week basis) | $2.12 - $2.14 | $ | 1.85 | 15% - 16% |
(1) | Includes ongoing amortization expense of acquired intangible assets and transaction and integration costs, such as incremental IT and compensation-related costs associated with the acquisition. |
(2) | The sale of Germany retail operations includes certain costs associated with the transfer of these stores to licensed stores. |
(3) | Income tax effect on non-GAAP adjustments was determined based on the nature of the underlying items and their relevant jurisdictional tax rates. |
(4) | Other tax matters include incremental benefit from additional domestic manufacturing deductions claimed in our U.S. consolidated tax returns for periods prior to the years presented. |
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