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Starbucks Reports Record Fourth Quarter And Fiscal 2012 Results

Starbucks Corporation (NASDAQ:SBUX) today reported financial results for its 13-week fiscal fourth quarter and 52-week fiscal year ended September 30, 2012. When comparing with prior year results, note that fiscal 2011 included non-routine gains related to the sale of corporate real estate and the acquisition of the company’s joint venture operations in Switzerland and Austria. A reconciliation of select FY11 GAAP measures to non-GAAP measures is included at the end of this document.

Fiscal Fourth Quarter 2012 Highlights:

  • Total net revenues increased 11% to a fourth-quarter record of $3.4 billion
  • Global comparable store sales increased 6% driven by a 5% increase in traffic and a 1% increase in average ticket
    • Americas comparable store sales increased 7% driven by 5% growth in traffic and 2% growth in average ticket
  • Operating margin expanded 60 basis points to 15.4% over the prior year’s operating margin of 14.8%, which included a 100 basis point benefit from a non-routine gain in Q4 FY11
    • Operating margin expanded 160 basis points when compared to prior year non-GAAP operating margin of 13.8% after excluding the non-routine gain in Q4 FY11
  • EPS was $0.46 per share compared to the prior year EPS of $0.47 per share, which included $0.10 relating to non-routine gains in Q4 FY11
    • Fourth quarter EPS of $0.46 grew 24% over Q4 FY11 non-GAAP EPS of $0.37 per share, which excluded the non-routine gains in Q4 FY11
    • EPS includes charges of $0.02 per share related to store portfolio optimization initiatives in Europe
  • The Board of Directors declared a cash dividend of $0.21 per share, a 24% increase from $0.17 per share

Fiscal Year 2012 Highlights:

  • Total net revenues increased 14% reaching a record $13.3 billion
  • Global comparable store sales increased 7% driven by a 6% increase in traffic and a 1% increase in average ticket
    • Americas comparable store sales increased 8% driven by a 6% increase in traffic and a 2% increase in average ticket
  • Channel Development revenue grew 50% to $1.3 billion
  • The company opened 1,063 net new stores globally
  • Operating margin improved 20 basis points to 15.0% over the prior year’s operating margin of 14.8%, which included a non-routine gain in FY11, despite 160 basis points of impact due to higher commodity costs in FY12
    • Operating margin expanded 50 basis points when compared to prior year non-GAAP operating margin of 14.5% after excluding the non-routine gain from FY11
  • EPS increased 10% to $1.79 per share compared to the prior year EPS of $1.62 per share, which included $0.10 relating to non-routine gains in FY11
    • EPS of $1.79 grew 18% over the prior year non-GAAP EPS of $1.52, excluding the non-routine gains in FY11
  • Operating cash flow totaled $1.7 billion
  • Starbucks returned approximately $1.1 billion to shareholders through share repurchases and dividend payments

“Our Q4 and overall 2012 fiscal year performance demonstrates the strength of our business and brand,” said Howard Schultz, chairman, president and chief executive officer, Starbucks Coffee Company. “The resiliency and relevance of our U.S. retail business, acceleration of the Channel Development business and expansion in Asia all contributed significantly to our strong results. I am incredibly proud of our 200,000 Starbucks partners around the world who have contributed to the success of the company and I am optimistic about achieving our aspirations for the future. “

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