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Starbucks Reports Record Third Quarter Results

Fiscal 2013 Targets

Starbucks has announced its fiscal 2013 targets as follows:

  • Starbucks plans to accelerate growth by opening approximately 1,200 net new stores globally, representing 20% growth over fiscal 2012.
    • Approximately 600 net new stores in the Americas, with the majority of those in the U.S. Of the approximately 600 stores, approximately half of the additions will be licensed stores.
    • Approximately 500 net new stores in China/Asia Pacific, with licensed stores comprising approximately two-thirds of the new additions. Of the approximately 500 stores, more than half will be in China.
    • Approximately 100 net new stores in EMEA (Europe, Middle East, Russia and Africa), with licensed stores comprising approximately two-thirds of the new stores.
  • The company is targeting approximately 10% - 13% revenue growth, driven by mid-single-digit comparable store sales growth, approximately 1,200 net new store openings, and continued strong growth in the Channel Development business.
  • Starbucks expects full-year consolidated operating margin improvement of 50 to 100 basis points over FY12 results.
  • The company expects earnings per share of $2.04 to $2.14, representing growth in the range of 15% - 20%, and consistent with its long-term outlook.
  • Capital expenditures are expected to be approximately $1 billion for the full year, with the 11% increase over FY12 spending attributable to both new store growth, and an increase in production capacity to support recently-announced initiatives.
  • The company expects a full-year tax rate of approximately 33%.

Company Updates

  • Starbucks acquired San Francisco-based Bay Bread, LLC and its La Boulange® bakery brand, as well as hired renowned French baker Pascal Rigo, to elevate core food offerings and build a premium, artisanal bakery brand.
  • Evolution Fresh™ juices became available at select Starbucks locations in the Seattle area, and over 600 Starbucks stores in southern California.
  • The company introduced hand-crafted Starbucks Refreshers™ beverages in select stores in 16 markets around the world, as well as Starbucks VIA Refreshers™ beverages in the U.S.
  • Starbucks® K-Cup® packs became available in Starbucks retail stores nationwide.
  • The company introduced its evening day-part program in select stores in the Chicago, IL metro area, marking the first extension outside of the Pacific Northwest. The company plans to extend this program to select stores in Southern California and Atlanta by the end of the year.
  • Seattle’s Best Coffee and Coinstar, Inc., announced an exclusive agreement to roll out Coinstar’s new Rubi™ coffee kiosks in the grocery, drug and mass merchant retail channels featuring Seattle’s Best Coffee® beverages.
  • The company continued its growth plans in Latin America with two major openings – its first store in Costa Rica, and its first Farmer Support Center in South America located in Colombia.
  • Starbucks and SSP, a dedicated provider of food and beverage brands in travel locations worldwide, opened the first Starbucks store in Finland at Helsinki Airport.
  • The company broke ground on its first company-owned soluble product manufacturing facility in Augusta, GA.
  • Starbucks appointed former Defense Secretary Robert Gates to its Board of Directors.
  • The Board of Directors declared a cash dividend of $0.17 per share, payable on August 24, 2012, to shareholders of record as of August 8, 2012.

Conference Call

Starbucks will be holding a conference call today at 2:00 p.m. Pacific Time, which will be hosted by Howard Schultz, chairman, president and ceo, John Culver, president, Starbucks Coffee China and Asia Pacific and Troy Alstead, cfo. 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 9:00 p.m. Pacific Time on Friday, July 27, 2012 by calling 1-855-859-2056, reservation number 38993543. A replay of the call will also be available via the Investor Relations page on Starbucks.com through approximately 5:00 p.m. Pacific Time on Friday, August 24, 2012 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 for the fiscal year ended October 2, 2011 for additional information.

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