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SBUX · STARBUCKS CORP

35 filings

10-K

SBUX 10-K Annual Reports

STARBUCKS CORP - 35 annual reports

Filing record · 2016–202610-K1010-Q348-K147

2025
STARBUCKS CORP Annual Report, Year Ended Sep 28, 2025
Starbucks Corporation's (SBUX) fiscal year 2025 filing indicates a challenging year marked by significant restructuring and operational adjustments. While total net revenues saw a modest increase of 3% to $37.2 billion, driven by new store openings and the acquisition of a UK licensed business, profitability was significantly impacted by substantial restructuring costs. Operating income decreased sharply to $2.9 billion from $5.4 billion in the prior year, resulting in an operating margin of 7.9%, down from 15.0%. This contraction is largely attributed to restructuring and impairment costs, deleverage, and investments related to the "Back to Starbucks" strategy. Diluted earnings per share fell to $1.63 from $3.31. The company is undertaking a significant "Back to Starbucks" strategy, which includes closing underperforming coffeehouses and transforming its support organization. This plan incurred approximately $892 million in restructuring and impairment charges in fiscal year 2025, with an additional $230 million expected in fiscal year 2026. Despite these headwinds, Starbucks continues to invest in its partners and the customer experience, highlighting the Green Apron Service model and leadership development. The company's North America segment, while seeing revenue growth, experienced a decline in comparable store sales, signaling ongoing pressure in its largest market. The International segment showed stronger revenue growth, but operating margin contracted due to increased promotional activity and restructuring costs.
Nov 14, 2025
2024
STARBUCKS CORP Annual Report, Year Ended Sep 29, 2024
Starbucks Corporation's fiscal year 2024 filing indicates a challenging year marked by a 1% increase in net revenues to $36.2 billion, largely driven by new store openings, but this was offset by a 2% decline in comparable store sales and unfavorable foreign currency translation. The company experienced a decrease in operating income to $5.4 billion and diluted earnings per share to $3.31. This performance was attributed to reduced customer traffic and the impact of investments that did not fully improve customer behaviors as intended, alongside macroeconomic and competitive pressures in China. In response, Starbucks is implementing a "Back to Starbucks" strategy under new CEO Brian Niccol, focusing on reinvesting in partners, enhancing customer experience, and driving innovation. The company continues to invest in its workforce, offering comprehensive benefits and focusing on diversity and inclusion. Despite operational challenges, Starbucks returned $3.8 billion to shareholders through dividends and share repurchases in fiscal year 2024. The company maintains a strong liquidity position with a $3.0 billion revolving credit facility and no outstanding borrowings as of the fiscal year-end. The report also highlights ongoing efforts in cybersecurity and a commitment to ESG initiatives, while acknowledging risks related to competition, supply chain, and macroeconomic conditions.
Nov 20, 2024
2023
STARBUCKS CORP Annual Report, Year Ended Oct 1, 2023
Starbucks Corporation's 2023 10-K filing highlights a year of robust revenue growth and improved profitability, driven by strong performance in its North America segment and international expansion, despite some headwinds. Total net revenues increased by 12% to $36.0 billion, fueled by a 9% increase in comparable store sales in North America and a 5% increase internationally. The company's Reinvention Plan, focusing on partner investments, store innovation, and digital capabilities, appears to be yielding positive results, contributing to a 200 basis point expansion in operating margin to 16.3%. Diluted earnings per share also saw a significant increase, rising to $3.58 from $2.83 in the prior year. The company returned $3.4 billion to shareholders through share repurchases and dividends, demonstrating a commitment to shareholder value. While facing inflationary pressures on commodities and supply chains, Starbucks anticipates moderating these impacts in the coming fiscal year and remains confident in its long-term growth strategy.
Nov 17, 2023
2022
STARBUCKS CORP Annual Report, Year Ended Oct 2, 2022
Starbucks Corporation's fiscal year 2022, ending October 2, 2022, demonstrated revenue growth despite significant headwinds, particularly in its China market due to COVID-19 restrictions. Total net revenues increased by 11% to $32.3 billion, driven by strong performance in the North America segment and growth in international markets outside of China. However, operating income and diluted earnings per share (EPS) saw a decline compared to the previous year, primarily attributed to substantial investments in partner wages and training, inflationary pressures on commodities and supply chain, and sales deleverage in China. The company is actively implementing its "Reinvention Plan" in the U.S. to enhance efficiency and customer experience, expecting these initiatives, along with strategic pricing, to offset ongoing cost pressures in fiscal year 2023. Despite the operational challenges, Starbucks highlighted its brand resilience and strong customer demand. The company continued to invest in its workforce, offering comprehensive benefits and focusing on diversity, equity, and inclusion. Financially, Starbucks returned $6.3 billion to shareholders in fiscal 2022 through share repurchases and dividends, and resumed its share repurchase program in the first quarter of fiscal 2023 after a temporary suspension to prioritize investments in stores and partners. The company maintains a strong liquidity position and believes its future cash flows will be sufficient to fund its capital requirements and shareholder distributions.
Nov 18, 2022
2021
STARBUCKS CORP Annual Report, Year Ended Oct 3, 2021
Starbucks Corporation's 10-K filing for the fiscal year ended October 3, 2021, reveals a significant recovery and robust growth following the challenges of the COVID-19 pandemic. The company demonstrated strong revenue increases across its North America and International segments, driven by a rebound in comparable store sales and a disciplined approach to new store openings. The positive financial performance was supported by increased average ticket sizes and transaction volumes, reflecting sustained brand strength and effective operational strategies. The company also highlighted its commitment to its partners (employees) through investments in wages and benefits, and its focus on diversity, equity, and inclusion initiatives. While facing some supply chain disruptions and inflationary pressures, Starbucks remains confident in its long-term "Growth at Scale" strategy. The report also details the company's financial condition, including its cash management, debt facilities, and capital expenditures, underscoring a strategic approach to reinvestment and shareholder returns.
Nov 19, 2021
2020
STARBUCKS CORP Annual Report, Year Ended Sep 27, 2020
Starbucks Corporation's fiscal year 2020 filing reflects significant impacts from the COVID-19 pandemic, with total net revenues declining 11% to $23.5 billion compared to fiscal 2019. This downturn was primarily driven by temporary store closures, reduced customer traffic, and modified operations across its company-operated and licensed stores. Despite these challenges, the company saw sequential improvements in comparable store sales in the latter half of the fiscal year, indicating resilience and brand strength. Key financial metrics were impacted, with operating income decreasing substantially and earnings per share falling to $0.79 from $2.92 in the prior year. The company also incurred restructuring charges related to its North America store portfolio optimization, announcing plans to close approximately 800 stores in the U.S. and Canada over the next 18 months. Starbucks continued to invest in technology and store format innovation to adapt to evolving customer behaviors, particularly towards contactless and convenient options. Shareholder returns through dividends and share repurchases were maintained, though share repurchases were temporarily suspended in March 2020.
Nov 12, 2020
2019
STARBUCKS CORP Annual Report, Year Ended Sep 29, 2019
Starbucks Corporation's (SBUX) 2019 10-K filing reveals a company focused on global expansion and strategic streamlining, with significant revenue growth driven by company-operated stores in the Americas. While overall net revenues increased by 7% to $26.5 billion, operating margin saw a slight decrease to 15.4% due to increased investments in partners (employees) and strategic initiatives like wage and benefit growth. The company's financial performance in fiscal year 2019 was impacted by significant divestitures and the licensing of its CPG and Foodservice businesses to Nestlé, which led to a decrease in 'Other' revenues. Despite these changes, Starbucks demonstrated a strong commitment to returning value to shareholders, with substantial share repurchases and dividend payments totaling $12.0 billion. The company continues to invest in digital capabilities and convenience-focused store formats to drive future growth and customer engagement.
Nov 15, 2019
2018
STARBUCKS CORP Annual Report, Year Ended Sep 30, 2018
Starbucks Corporation's 2018 10-K filing highlights a year of significant strategic transformations aimed at accelerating growth and streamlining operations. The company reported a 10% increase in total net revenues to $24.7 billion, driven by new store openings and a 2% growth in comparable store sales. However, operating income saw a decline, primarily due to increased costs related to digital platforms, technology, and a shift in product mix towards food and beverages. A major development during the year was the licensing of the company's consumer packaged goods and foodservice businesses to Nestlé, forming the Global Coffee Alliance, which provided a substantial upfront payment. The company also completed the acquisition of its East China joint venture, solidifying its wholly-owned presence in a key growth market, and divested its Tazo brand. These strategic moves, while impacting short-term operating margins, are designed to focus resources on high-return businesses and enhance long-term shareholder value. Starbucks continued its strong commitment to returning capital to shareholders, significantly increasing share repurchases and dividends.
Nov 16, 2018
2017
STARBUCKS CORP Annual Report, Year Ended Oct 1, 2017
Starbucks Corporation's 2017 10-K report details a year of continued global expansion and strategic investments. The company achieved a 5% increase in total net revenues, reaching $22.4 billion, driven by 2,320 net new store openings and a 3% growth in global comparable store sales. However, operating income saw a slight decline of 1% to $4.1 billion, with operating margins decreasing to 18.5% due to increased investments in employees and digital platforms, particularly in the Americas segment, along with restructuring and impairment charges related to the Teavana business. Despite margin pressures, diluted earnings per share (EPS) increased by 4% to $1.97, supported by improved sales leverage and a gain on the sale of Singapore retail operations. Starbucks also demonstrated a strong commitment to shareholder returns, repurchasing shares and paying dividends totaling $3.5 billion. The company is strategically repositioning its EMEA segment towards a licensed model and is focused on key growth initiatives for fiscal 2018, including accelerating U.S. comparable store sales, driving digital innovation, and expanding its presence in China. The report highlights the company's robust financial health, demonstrated through strong cash flow from operations and significant capital expenditures aimed at future growth.
Nov 17, 2017
2016
STARBUCKS CORP Annual Report, Year Ended Oct 2, 2016
Starbucks Corporation's 2016 10-K filing showcases a year of solid growth and strategic investment. The company reported an 11% increase in total net revenues to $21.3 billion, driven by a 5% global comparable store sales growth, with a 4% increase in average ticket and a 1% increase in transactions. Operating income saw a significant rise to $4.2 billion, with an improved operating margin of 19.6%, attributed to sales leverage and lower commodity costs, partially offset by investments in employee wages and digital platforms. The company continued its disciplined global store expansion, opening 2,042 net new stores across its segments, contributing to revenue growth. Financial management remained strong, with $4.6 billion in cash flow from operations and $3.2 billion returned to shareholders through dividends and share repurchases. Starbucks is strategically reinvesting in its business, particularly in its partners (employees) and digital capabilities, signaling a focus on long-term growth and customer experience.
Nov 18, 2016
2015
STARBUCKS CORP Annual Report, Year Ended Sep 27, 2015
Starbucks Corporation's 2015 10-K filing reveals a strong fiscal year with a 17% increase in total net revenues to $19.2 billion, driven by a robust 7% growth in comparable store sales globally. The company's Americas segment continues to be the primary revenue driver, with positive performance attributed to beverage and food offerings and strategic new store openings. A significant event impacting the fiscal year was the full consolidation of Starbucks Japan, which boosted revenues considerably in the China/Asia Pacific segment, though it also led to a notable decline in operating margin for that segment due to acquisition-related costs. The company demonstrated a commitment to returning value to shareholders, repurchasing approximately $1.4 billion in stock and paying dividends totaling $958.7 million in fiscal 2015. Starbucks also continued its disciplined global expansion, adding over 1,500 net new stores across its operating segments. Management expressed confidence in future growth, projecting revenue growth exceeding 10% for fiscal 2016, supported by continued comparable store sales increases and further store expansion, particularly in the China/Asia Pacific region. The company remains focused on digital innovation, including its Mobile Order and Pay functionality, as a key driver of convenience and brand engagement.
Nov 12, 2015
2014
STARBUCKS CORP Annual Report, Year Ended Sep 28, 2014
Starbucks Corporation's fiscal year 2014 filing demonstrates a significant financial recovery and growth trajectory, primarily driven by an 11% increase in total net revenues to $16.4 billion. This growth was fueled by robust comparable store sales of 6% across its global segments, a testament to effective strategies in product innovation and store expansion. The company successfully navigated the aftermath of the Kraft litigation, as evidenced by a substantial swing from an operating loss in fiscal 2013 to a healthy operating income of $3.1 billion in fiscal 2014, with an operating margin improving to 18.7%. This financial turnaround was aided by operational efficiencies, favorable commodity costs (particularly coffee), and strategic sales leverage. Looking ahead, Starbucks outlined an ambitious growth plan for fiscal 2015, projecting revenue growth of 16-18%, including contributions from the acquisition of Starbucks Japan. The company's commitment to returning value to shareholders is also evident, with $1.6 billion returned in fiscal 2014 through dividends and share repurchases, signaling confidence in its financial health and future prospects. Despite ongoing risks related to economic conditions and competition, Starbucks' strategic focus on disciplined global expansion, brand value, and operational excellence positions it for continued success.
Nov 14, 2014
2013
STARBUCKS CORP Annual Report, Year Ended Sep 29, 2013
Starbucks Corporation's 2013 10-K filing highlights robust revenue growth, with total net revenues increasing by 12.0% to $14.9 billion. This growth was primarily driven by a 7% increase in global comparable store sales, reflecting a 5% rise in transactions and a 2% increase in average ticket. The Americas segment remains the largest contributor, showing strong performance with 11% revenue growth and 7% comparable store sales growth. The company also saw significant expansion in its China/Asia Pacific segment, with a 27% revenue increase and 9% comparable store sales growth, signaling strong international momentum. However, the fiscal year 2013 results were significantly impacted by a $2.8 billion pretax charge related to the conclusion of a litigation with Kraft Foods Global, Inc. This charge resulted in a net earnings attributable to Starbucks of $8.3 million, or $0.01 per diluted share, a stark contrast to the $1.38 billion in net earnings or $1.79 per diluted share in fiscal 2012. Despite this one-time litigation impact, the company's operational performance, including strong cash flow generation, remains a positive indicator for future growth and shareholder returns.
Nov 18, 2013
2012
STARBUCKS CORP Annual Report, Year Ended Sep 30, 2012
Starbucks Corporation's 2012 10-K filing demonstrates robust financial performance and strategic expansion. The company reported a 13.7% increase in total net revenues to $13.3 billion, driven by a solid 7% growth in global comparable store sales and significant 50% revenue growth in the Channel Development segment, boosted by the successful launch of K-Cup® portion packs. Operating income rose to $2.0 billion, with an improved operating margin of 15.0%, reflecting increased sales leverage which helped offset higher commodity costs. Earnings per diluted share (EPS) also saw a notable increase to $1.79 from $1.62 in the prior year. The company continued its disciplined global store growth, adding a net of 1,063 stores across its segments, with the Americas remaining the largest revenue contributor. The China/Asia Pacific (CAP) segment showed particularly strong revenue growth of 31%, signaling its increasing importance. Starbucks also continued to return value to shareholders through share repurchases and increased dividends, underscoring a commitment to shareholder returns amidst continued investment in store renovations and new product innovation, such as the Verismo™ system.
Nov 16, 2012
2011
STARBUCKS CORP Annual Report, Year Ended Oct 2, 2011
Starbucks Corporation's 2011 10-K report highlights a year of robust growth and improved profitability, driven by strong performance in its company-operated stores, particularly in the United States, and continued international expansion. The company demonstrated resilience despite headwinds from rising commodity costs, effectively leveraging increased sales and optimizing store-level economics to drive an 8% increase in global comparable store sales. This growth translated into higher operating income and a significant improvement in earnings per share (EPS) to $1.62. Key strategic initiatives included refining store operations through technology upgrades, expanding the food warming program into new markets like China, and successfully transitioning its consumer packaged goods business to a direct distribution model. The company also continued its disciplined approach to store growth, with a primary focus on international markets, while managing its capital effectively through share repurchases and dividend payments. Management expressed confidence in its business model and brand strength, setting a positive outlook for fiscal year 2012.
Nov 18, 2011
2010
STARBUCKS CORP Annual Report, Year Ended Oct 3, 2010
Starbucks Corporation's 2010 10-K filing highlights a significant turnaround and return to profitable growth following restructuring efforts in prior years. The company demonstrated strong performance in fiscal year 2010, with a notable increase in consolidated net revenues and operating income. This improvement was driven by robust comparable store sales growth, particularly in the U.S. segment, and continued operational efficiencies. The report emphasizes the company's strategic focus on disciplined global store expansion, with a significant portion of new store openings planned internationally. Starbucks is also actively diversifying its revenue streams by expanding its global consumer products business and leveraging new channels for its coffee and tea products. The company's financial health appears strong, with healthy operating cash flow and a solid liquidity position, enabling a return of capital to shareholders through share repurchases and the initiation of a quarterly dividend.
Nov 22, 2010
2009
STARBUCKS CORP Annual Report, Year Ended Sep 27, 2009
Starbucks Corporation's 2009 10-K filing reveals a challenging year marked by significant restructuring efforts and a focus on cost reduction and operational efficiency. The company experienced a revenue decline of 5.9% to $9.77 billion, largely driven by a 6.7% decrease in Company-operated retail revenues due to a 6% decline in comparable store sales in the US and a 2% decline internationally. This period reflects the impact of a difficult economic environment on consumer discretionary spending. Despite revenue headwinds, Starbucks demonstrated a commitment to improving its financial health by executing on its strategic initiatives. The company significantly reduced its cost structure, realizing approximately $580 million in cost reductions through store closures, headcount reductions, and operational efficiencies. These efforts, coupled with a renewed focus on customer experience and product innovation (like the launch of VIA Ready Brew), led to an improvement in operating margin to 5.7% from 4.9% in the prior year. The company also strengthened its financial foundation, ending the year with no short-term debt and substantial cash reserves, positioning it to navigate the ongoing economic challenges and invest in future growth.
Nov 20, 2009
2008
STARBUCKS CORP Annual Report, Year Ended Sep 28, 2008
Starbucks Corporation's 2008 10-K filing reveals a challenging year marked by declining comparable store sales, particularly in the U.S. This was primarily attributed to softer customer traffic, exacerbated by economic headwinds like rising energy costs, unemployment, and the global financial crisis. In response, the company initiated a significant transformation strategy, including the closure of approximately 600 underperforming U.S. stores and a reduction in leadership and non-store positions. Despite these headwinds, Starbucks continued its global expansion, with a net increase of 681 Company-operated stores in the U.S. and 236 internationally. Specialty operations, including licensing and foodservice, also showed growth. However, overall profitability was impacted by significant restructuring charges of $266.9 million. The company anticipates a challenging fiscal year 2009, forecasting flat total revenues and negative comparable store sales, but aims to improve operating income through cost reductions resulting from the restructuring efforts.
Nov 24, 2008
2007
STARBUCKS CORP Annual Report, Year Ended Sep 30, 2007
Starbucks Corporation's 2007 10-K filing reveals a company experiencing robust growth, driven primarily by a significant increase in company-operated retail stores, which now number over 8,500 globally. Net revenues saw a substantial 21% increase, reaching $9.4 billion, fueled by both company-operated retail and specialty operations. The international segment showed particularly strong momentum, with a 32% increase in company-operated retail revenue. However, the filing also highlights growing challenges, particularly in the U.S. market, where a flattening transaction count and negative traffic trends were observed, attributed to economic slowdown and price increases. The company also faced increased operating costs, notably with dairy expenses rising significantly. Despite these headwinds, Starbucks management expressed confidence in its strategy to focus on operational excellence, innovation, and efficiency to navigate the challenging economic environment and achieve targeted growth for fiscal year 2008.
Nov 29, 2007
2006-A
STARBUCKS CORP Annual Report (Amendment), Year Ended Oct 1, 2006
Starbucks' fiscal 2006 (52 weeks ended October 1, 2006) was a year of strong top-line growth with margin pressure from the first recognition of stock-based compensation (SFAS 123R). Total net revenues rose 22% to $7.79 billion, driven by 2,199 new stores opened during the year and 7% global comparable store sales growth in Company-operated markets, the 15th consecutive year of comparable store sales growth of 5% or greater. Net earnings increased 14% to $564 million, while operating income rose 15% to $894 million, though operating margin fell to 11.5% from 12.3% due to stock-based compensation expense. Management guided to roughly 20% revenue growth, 3%-7% comparable store sales growth, approximately 2,400 new stores, and a 38% effective tax rate for fiscal 2007. The filing shows a company with strong cash generation and balance sheet flexibility. Operating cash flow was $1.1 billion, capital expenditures were $771 million net, and the company repurchased $854 million of stock while total cash and liquid investments reached $459 million. Borrowings under the revolving credit facility rose to $700 million outstanding against an expanded $1.0 billion facility, and management expects fiscal 2007 capital expenditures of $950 million to $1.0 billion. The effective tax rate fell to 35.8% from 37.9%, aided by a valuation allowance reversal and a foreign tax audit settlement, which investors should weigh when assessing the quality of earnings growth. Segment results show the United States remains the core profit engine, generating $955 million of operating income on $6.18 billion of revenue. International revenue grew 27% to $1.3 billion with operating margin improving to 8.3%, though management notes these markets remain in early development and require heavier support investment. The new Global Consumer Products Group segment, which includes licensed grocery products and ready-to-drink beverages, posted a 55% operating margin, and the January 2006 Hawaii and Puerto Rico buyouts and the October 2006 Beijing/Tianjin acquisition (61 stores) signal continued consolidation of licensed operations.
Dec 21, 2006
2006
STARBUCKS CORP Annual Report, Year Ended Oct 1, 2006
Starbucks' fiscal 2006 10-K (year ended October 1, 2006) shows a company still delivering strong top-line and earnings growth while absorbing a sharp rise in stock-based compensation. Total net revenues rose 22% to $7.79 billion, driven by 1,040 new Company-operated stores (7% comparable store sales growth) and a 28% increase in licensing revenue. Operating income grew 15% to $894 million, but operating margin fell to 11.5% from 12.3% as stock-based compensation expense of $105 million (adopted under SFAS 123R) hit store, specialty and G&A lines. Diluted EPS rose to $0.71 from $0.61, with net earnings up 14% to $564 million. Balance sheet and cash flow highlights: operating cash flow was $1.13 billion, capital expenditures were $771 million, and the company repurchased $854 million of stock, funded partly by a $700 million draw on its revolver (expanded to $1 billion). Working capital turned negative (-$406 million), largely due to that short-term borrowing, and management guides to fiscal 2007 capex of $950 million to $1.0 billion. Investors should weigh strong unit growth and cash generation against margin compression, rising leverage on the revolver, and a heavy reliance on the U.S. segment (79% of revenue). Key forward-looking items include guidance for roughly 20% revenue growth and 3–7% comparable store sales growth in fiscal 2007, a long-term target of 20,000 U.S. and at least 20,000 international stores, and a risk profile highlighted by commodity (arabica coffee, dairy) exposure, China expansion, and wage-and-hour litigation in the U.S. Management's ability to sustain comparable sales growth while expanding store count and absorbing stock-compensation costs will be the central question for future returns.
Dec 14, 2006
2005
STARBUCKS CORP Annual Report, Year Ended Oct 2, 2005
Starbucks Corporation's 2005 10-K report highlights a year of robust growth and strategic expansion. The company demonstrated strong financial performance, driven primarily by its extensive network of Company-operated retail stores, which accounted for 85% of total net revenues. This segment saw significant growth through the opening of 735 new stores and an 8% increase in comparable store sales, underscoring the continued appeal of the "Starbucks Experience." Specialty Operations also contributed positively, representing 15% of net revenues and encompassing licensing, foodservice, and other initiatives that further leverage the Starbucks brand. The company's strategic focus remains on global brand recognition and rapid retail expansion, with ambitious long-term goals for store growth in both the U.S. and international markets. Starbucks is actively managing its supply chain and commodity costs, particularly for coffee and dairy, and is exploring new product innovations and distribution channels. Despite strong performance, the company acknowledges risks associated with its dependence on the U.S. market, intense competition, and the challenges of managing rapid international growth. Overall, the filing indicates a company on a strong growth trajectory, with a clear strategy for continued expansion and brand development.
Dec 16, 2005
2004-A
STARBUCKS CORP Annual Report (Amendment), Year Ended Oct 3, 2004
Starbucks Corporation's 2004 Form 10-K filing reveals a company in a strong growth phase, driven by aggressive expansion of its Company-operated retail stores, which accounted for 84% of net revenues. The company reported significant year-over-year increases in net revenues (29.9%) and net earnings (46.4%), demonstrating its ability to scale effectively. International expansion is a key focus, with a target of at least 15,000 stores globally. The company also continues to diversify its revenue streams through Specialty Operations, including licensing and foodservice, which contributed 16% to net revenues. Key financial highlights include robust revenue growth and improving operating margins, despite rising commodity costs for dairy and green coffee. Management expressed confidence in achieving future growth targets, projecting annual total net revenue growth of approximately 20% and earnings per share growth of 20-25% for the next three to five years. The company also noted a significant increase in its cash and liquid investments, providing a strong liquidity position to fund future capital expenditures and growth initiatives.
Feb 18, 2005
2004
STARBUCKS CORP Annual Report, Year Ended Oct 3, 2004
Starbucks' fiscal 2004 (53 weeks ended October 3, 2004) was a strong year on every headline measure. Total net revenues rose 29.9% to $5.29 billion (27.3% on a comparable 52-week basis), and operating income grew 43.7% to $610 million, lifting operating margin to 11.5% from 10.4%. Net earnings increased 46.0% to $392 million, and diluted EPS reached $0.95 versus $0.67 a year earlier. Company-operated retail stores generated 84% of revenue, with comparable store sales up 10% (U.S. up 11%), the 13th consecutive year of comparable growth of 5% or more. Management also set long-term targets of roughly 20% annual revenue growth and 20-25% annual EPS growth over the next three to five years, and said current comparable-store growth is not sustainable long term. The company opened 634 net new company-operated stores, ending the year with 5,215 (4,293 in the U.S.), and added 1,344 licensed stores, for 8,569 stores in total. Specialty operations grew 33.7% to $837 million, driven by the Kraft grocery partnership, licensing and foodservice. Cash flow remained strong, with operating cash flow of $794 million against net capital expenditures of $386 million, and $788 million in cash and liquid investments. The company repurchased 5.0 million shares for $203 million and guided fiscal 2005 capital expenditures of $600-650 million. Key risks flagged in the filing include rising dairy and green coffee costs, which pressured margins; a high valuation that leaves the stock vulnerable to sharp declines if expectations are missed; dependence on the U.S. retail business (72% of revenue); the higher cost and execution risk of international expansion; and upcoming Sarbanes-Oxley Section 404 compliance. Leadership is also transitioning, with CEO Orin Smith retiring on March 31, 2005 and James Donald named CEO-designate.
Dec 10, 2004
2003-A
STARBUCKS CORP Annual Report (Amendment), Year Ended Sep 28, 2003
This filing is an amendment to Starbucks Corporation's (SBUX) 2003 Form 10-K, primarily correcting clerical errors in executive compensation related to relocation and temporary housing expenses for James L. Donald and David A. Pace. The amendment focuses on the Summary Compensation Table for fiscal years 2001-2003, detailing salaries, bonuses, long-term compensation, and other compensation for key executives. Investors should note the significant relocation and housing expenses incurred for Messrs. Donald and Pace, as well as the substantial annual bonuses and stock options granted to top executives like Orin C. Smith and Howard Schultz.
Jun 23, 2004
2003
STARBUCKS CORP Annual Report, Year Ended Sep 28, 2003
Starbucks' fiscal 2003 10-K (year ended September 28, 2003) shows a company still in a rapid expansion phase, with total net revenues up 23.9% to $4.08 billion and operating income up 34.3% to $424.7 million, lifting the operating margin to 10.4% from 9.6%. Growth was driven by 602 new Company-operated stores, 8% consolidated comparable store sales growth (9% in the U.S.), and a 26.2% increase in Specialty revenues to $625.9 million. Diluted EPS rose to $0.67 from $0.54, and net earnings reached $268.3 million. The U.S. segment is the profit engine, generating $606.5 million of operating income on $3.47 billion of revenue, while the International segment earned only $5.5 million on $603 million of revenue and excluding Canada posted an operating loss of $18.5 million. Cash generation remained strong, with $566.4 million from operations against $357.3 million of net capital expenditures, leaving $486.2 million in cash and liquid investments and no meaningful debt (long-term debt of about $5 million). The company also repurchased $75.7 million of stock. Management guided to roughly 1,300 new stores worldwide in fiscal 2004, comparable store sales growth of 3%-7%, approximately 20% revenue growth, and 20%-25% EPS growth over the next three to five years. Capital expenditures of $450-$475 million are planned. Key risks for investors include green coffee price volatility (fixed-price commitments of $287.2 million), execution risk in store growth and real estate, the unprofitable International segment, the expensing of future stock options, and a stock that trades at a high multiple to expected earnings. The filing also notes a higher effective tax rate of 38.5% and that the company faces no material pending legal proceedings.
Dec 23, 2003
2002-A
STARBUCKS CORP Annual Report (Amendment), Year Ended Sep 29, 2002
This filing is Amendment No. 1 to Starbucks Corporation's Annual Report on Form 10-K for the fiscal year ended September 29, 2002, filed February 12, 2003. It contains no new financial results, business description, or audited financial statements. Its sole purpose is to add the CEO and CFO certifications required under Section 302 of the Sarbanes-Oxley Act of 2002, which the original 10-K filed December 20, 2002 had omitted, even though the company stated it had complied with the underlying procedures under Rules 13a-14(c) and 15d-14. The amendment includes Exhibit 23 (Independent Auditor's Consent), Exhibit 99.1 (Section 906 certification by CEO Orin C. Smith), and Exhibit 99.2 (Section 906 certification by CFO Michael Casey). Both officers certify that the annual report fully complies with Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and fairly presents, in all material respects, the company's financial condition and results of operations. The filing is signed by Michael Casey as executive vice president and chief financial officer. For investors, this filing is primarily a procedural and governance item rather than a source of new financial information. Readers seeking Starbucks' fiscal 2002 operating results, balance sheet, cash flows, store data, or risk factors should refer to the original Form 10-K filed December 20, 2002. The amendment is noteworthy mainly as a record that a required certification was missing from the original filing and was corrected after the fact.
Feb 12, 2003
2002
STARBUCKS CORP Annual Report, Year Ended Sep 29, 2002
Starbucks' fiscal 2002 10-K (fiscal year ended September 29, 2002) shows a company still in rapid expansion with strong top-line growth and improving profitability. Total net revenues rose 24% to $3.29 billion, driven by 614 new Company-operated stores and a 6% consolidated comparable store sales increase (North America +7%, International -3%). Net earnings grew 19% to $215.1 million, and diluted EPS rose to $0.54 from $0.46. Retail accounted for about 85% of revenue, with the remaining 15% from Specialty Operations such as the Pepsi-partnered bottled Frappuccino, Dreyer's ice cream, grocery channel licensing with Kraft, and licensed stores. Margin trends were mixed. Cost of sales improved to 41.0% of revenue from 42.0%, helped by sales mix shifting toward higher-margin beverages and lower green coffee costs. However, operating margin contracted to 9.7% from 10.6% because store operating expenses rose to 40.1% of retail revenue (from 39.3%), with higher payroll costs, rent, and $26.0 million in store asset impairments. Management also flagged that it does not expect a further benefit from lower coffee costs in fiscal 2003, since it has shifted to higher fixed-price contracts. The company also recorded an $18.0 million charge to settle two California class action lawsuits. Balance sheet and cash flow remain strong. Operating cash flow was $477.7 million against $375.5 million in capital expenditures, leaving the company with $402.2 million in cash and short-term investments and working capital of $310.0 million. The company has no dividend and is repurchasing shares under a 10 million share authorization, with about 7.9 million shares remaining. Management plans to open at least 1,200 new stores in fiscal 2003 and expects capital spending of roughly $425 million. Key risks include coffee price volatility, possible downward pressure on comparable store sales from cannibalization, and rising occupancy costs.
Dec 20, 2002
2001
STARBUCKS CORP Annual Report, Year Ended Sep 30, 2001
Starbucks' fiscal 2001 (52 weeks ended September 30, 2001) showed strong top-line and earnings growth despite a difficult backdrop. Total net revenues rose 22% to $2.65 billion from $2.18 billion, driven by 647 new company-operated stores and 5% comparable store sales growth. Net earnings more than doubled to $181.2 million from $94.6 million, and diluted EPS rose to $0.46 from $0.24. The comparison is flattered by $58.8 million of Internet-related investment write-downs in fiscal 2000; fiscal 2001 included only $2.9 million of such losses. Operating income grew 32% to $281.1 million, with operating margin expanding to 10.6% from 9.7%, helped by lower green coffee costs and procurement savings, partly offset by higher store labor and occupancy costs. The balance sheet remained conservative. Shareholders' equity reached $1.38 billion, and the company ended the year with $220.5 million in cash and short-term investments and only about $6.5 million of long-term debt. Operating cash flow was $460.8 million against $384.2 million of capital expenditures, leaving room to fund the planned opening of at least 625 company-operated stores in fiscal 2002, with capex guided to $450–$475 million. The company also authorized a $60 million share repurchase program, of which $49.8 million had been used by year-end. Key risks flagged in the filing include volatile green coffee prices, with $283.8 million of fixed-price purchase commitments, rising occupancy and labor costs, cannibalization from store clustering that may pressure comparable store sales, and a moderately negative effect from the September 11 attacks on the Specialty Operations, which derive about 9% of revenue from travel and hospitality. A pending California class action alleging misclassification of store managers as exempt employees is at an early stage, and its financial impact cannot yet be predicted.
Dec 20, 2001
2000
STARBUCKS CORP Annual Report, Year Ended Oct 1, 2000
Starbucks' fiscal 2000 10-K (year ended October 1, 2000) shows a company still in rapid expansion mode, with total net revenues up 29% to $2.17 billion and comparable store sales up 9%. The company opened 490 company-operated stores and ended the year with 3,501 total stores (2,619 company-operated), while systemwide retail sales reached $2.3 billion, up 38%. Operating income rose 35% to $212.3 million, and gross margin edged up to 56.0% of revenues, though store operating expenses and labor costs rose as a share of retail revenue. Reported earnings were weaker than the operating story. Net earnings fell 7% to $94.6 million, or $0.49 diluted EPS, because of $58.8 million in Internet-related investment write-downs (living.com, Talk City, Cooking.com, Kozmo.com, about $0.22 per share) and a higher effective tax rate of 41.1%. Excluding those losses, diluted EPS would have been about $0.71. Cash flow from operations was strong at $318.6 million, but capital expenditures of $316.5 million were largely self-funded, and the company plans roughly $390 million of capex in fiscal 2001 with at least 525 new company-operated stores. The balance sheet is conservative, with $132 million in cash and short-term investments, minimal debt of about $7 million, and shareholders' equity of $1.15 billion. Management flagged cannibalization from clustered stores and competition as possible headwinds to future comparable store sales growth. The company has never paid a cash dividend and intends to keep reinvesting earnings in growth.
Dec 22, 2000
1999
STARBUCKS CORP Annual Report, Year Ended Oct 3, 1999
Starbucks' fiscal 1999 10-K (fiscal year ended October 3, 1999, a 53-week year) shows a company in rapid expansion with strong profitability. Net revenues rose 28% to $1.68 billion, driven by 460 new Company-operated stores and a 6% comparable store sales increase. Net earnings grew 49% to $101.7 million, and diluted EPS rose to $0.54 from $0.37. Operating margin improved to 9.3% from 8.3%, and gross margin edged up to 55.9%. Retail stores generated about 85% of revenue, with specialty operations (wholesale, Kraft grocery licensing, joint ventures, and direct-to-consumer) making up the remaining 15%. The balance sheet remains conservative. Shareholders' equity reached $961 million, long-term debt was nearly eliminated at $9 million, and cash plus short-term investments totaled $118 million. Operating cash flow was $211 million against $262 million in capital expenditures, funded largely by the company's own cash generation and option exercises. Management plans at least 400 new company-operated stores and roughly $300 million in fiscal 2000 capital spending, with at least 350 North American and 50 U.K. openings, and expects the tax rate to hold near 38%. Key risks flagged in the filing include coffee price volatility (partly hedged with about $84 million in fixed-price purchase commitments), rising competition, cannibalization from clustered stores that could pressure comparable store sales, and rising labor costs that pushed store operating expenses to 38.2% of retail revenue. Year 2000 remediation cost about $1.4 million to date, with roughly $2 million more expected, and management described the worst-case scenario as supplier-driven disruption rather than internal system failure.
Dec 23, 1999
1997
STARBUCKS CORP Annual Report, Year Ended Sep 28, 1997
Starbucks Corporation's fiscal 1997 Form 10-K (fiscal year ended September 28, 1997) shows a company in rapid expansion with strong top-line growth and improving profitability. Net revenues rose 39% to $966.9 million, driven by a net addition of new company-operated stores (341 opened in fiscal 1997, ending at 1,270 stores) and a 5% increase in comparable store sales. Net earnings grew 36% to $57.4 million, and fully diluted EPS rose to $0.70 from $0.54, though fiscal 1996 included a one-time $9.2 million pre-tax gain on the Noah's investment, so underlying growth was stronger than the headline figure suggests. Operating margin improved to 9.1% from 8.2%, largely because cost of sales fell to 44.7% of revenues from 48.2% on lower green coffee costs. The outlook raises caution flags for investors. Management expects gross margins to compress in fiscal 1998 as higher-cost coffees flow through cost of sales, coffee prices remain high relative to history, and comparable store sales growth may face downward pressure from store cannibalization and competition. Store operating expenses rose to 37.3% of retail sales from 35.1%, reflecting higher advertising and payroll costs. The company plans at least 350 new North American stores in fiscal 1998, targets 2,000 locations by 2000, and expects capital expenditures of about $200 million, to be funded from operating cash flow supplemented by debt or equity if necessary. Balance sheet and capital structure matter for the outlook. Cash and investments totaled $158.8 million, working capital declined to $177.6 million, and $165 million of 4 1/4% convertible subordinated debentures were called for redemption on October 21, 1997, with substantially all expected to convert into about 7.1 million common shares, which would reduce future interest expense but add dilution. The company has never paid a cash dividend and intends to retain earnings. Management judged the year 2000 cost impact and legal exposure immaterial, and the company is the subject of no material pending litigation.
Dec 23, 1997
1996-A2
STARBUCKS CORP Annual Report (Amendment), Year Ended Sep 29, 1996
Starbucks Corporation's filing is an amended Form 10-K/A for the fiscal year ended September 29, 1996 (FY1996). Most financial content is incorporated by reference to the 1996 Annual Report (Exhibits 13.1 to 13.4, filed February 4, 1997), so this document itself contains limited hard financial figures. The business description shows a company that is vertically integrated and rapidly expanding: 1,006 stores at year-end, 929 of them Company-operated across 21 U.S. states, D.C., British Columbia and Ontario, with 75 licensed stores in North America and the first two stores in Tokyo. Company-operated retail stores generated about 86% of net revenues, specialty sales about 11%, direct response about 3%, and licensing about 1%. Management plans at least 325 new North American stores in fiscal 1997 and entry into at least three new major markets, including Phoenix and Miami. For investors, the key points are growth and margin dynamics. Management says gross margins were hurt in late FY1995 and throughout FY1996 by the sell-through of higher-cost coffee inventory, and expects that inventory to be largely cleared by the end of Q1 FY1997. The company held roughly $47 million in fixed-price green coffee purchase commitments at year-end and said it did not use hedging or futures in FY1996, leaving it exposed to commodity volatility. International and partnership channels are expanding through joint ventures with Pepsi (Frappuccino ready-to-drink), Dreyer's (ice cream), SAZABY (Japan), a Hawaii MacNaughton venture, Bonvests (Singapore), and licensing deals with Host and ARAMARK. Risk factors cited include coffee price volatility, competition from supermarkets and national brands, intense competition for store sites and qualified personnel, and the cost of expansion. Legal proceedings are described as ordinary-course matters with no expected material adverse effect. The filing also notes a 4 1/4% convertible subordinated debenture due 2002 and a Seattle-area and Pennsylvania roasting footprint. Note that this is a 1997 document reflecting fiscal 1996 results; the financial statements themselves are not reproduced in this text, so the figures above should be verified against the Annual Report exhibits.
Apr 24, 1997
1996-A
STARBUCKS CORP Annual Report (Amendment), Year Ended Sep 29, 1996
Starbucks Corporation's Form 10-K/A for the fiscal year ended September 29, 1996 shows a company in rapid expansion with strong top-line growth and improving profitability. Net revenues rose 50% to $696.5 million (from $465.2 million), driven by new company-operated store openings (929 company-operated stores plus 75 licensed stores in North America at year-end) and a 7% comparable store sales increase. Net earnings grew 61% to $42.1 million, or $0.54 per fully-diluted share, though this figure includes a one-time $9.2 million pre-tax gain from the sale of the Noah's New York Bagels investment. Operating income increased to $57.0 million, but operating margin slipped to 8.2% from 8.6% as cost of sales rose to 48.2% of revenues on higher green coffee costs from the 1994 Brazilian frost. Balance sheet strength improved meaningfully. Shareholders' equity reached $451.7 million, working capital rose to $238.5 million, and cash plus short-term investments totaled $229.4 million. The company issued $165 million of 4 1/4% convertible subordinated debentures due 2002 in October 1995, and most of the debentures' 1994 predecessor issue was converted into common stock. Operating cash flow was $136.7 million, and capital expenditures of $161.8 million funded 307 new company-operated stores. Management guided to roughly $170 million in fiscal 1997 capital spending and expects cost of sales to improve as higher-cost coffee inventory is sold through by the end of the first quarter of fiscal 1997. Investors should weigh the strong growth and balance sheet against key risks disclosed in the filing: comparable store sales growth is expected to face downward pressure from store cannibalization and rising competition, coffee price volatility remains a material exposure with no hedging activity in fiscal 1996, and the company has never paid a cash dividend, retaining earnings to fund expansion. Note that this document is an amendment, and much of the detailed financial and market information is incorporated by reference from the 1996 Annual Report exhibits.
Feb 4, 1997
1996
STARBUCKS CORP Annual Report, Year Ended Sep 29, 1996
Starbucks Corporation's Form 10-K for the fiscal year ended September 29, 1996 describes a company that is vertically integrated in coffee sourcing, roasting, and retail, and is in a rapid expansion phase. As of fiscal year-end, Starbucks operated 1,006 stores, of which 929 were company-operated across 21 U.S. states, the District of Columbia, and two Canadian provinces, and 75 were licensed in North America. Company-operated retail stores generated about 86% of net revenues. The company plans at least 325 new North American stores in fiscal 1997, entry into at least three new major markets (including Phoenix and Miami), and its first international stores in Japan, Hawaii, and Singapore. The filing's most important business-relevant points for investors are the growth strategy and the margin risk from green coffee costs. Management attributed margin pressure in fiscal 1995 and 1996 to the sell-through of higher-cost coffee inventory, and expected most of that inventory to be sold by the end of the first quarter of fiscal 1997. The company held roughly $47 million in fixed-price green coffee purchase commitments and stated it did not use hedging or futures contracts in fiscal 1996. Diversification is also visible: specialty sales represented about 11% of revenues, direct response about 3%, and licensing and royalties about 1%, with joint ventures with Pepsi (Frappuccino) and Dreyer's (ice cream) extending the brand beyond stores. The filing has limited financial detail because Items 5 through 8 (market data, selected financial data, MD&A, and financial statements) are incorporated by reference to the 1996 Annual Report to Shareholders, which was not reproduced in the content provided. Investors evaluating financial performance should therefore review that annual report, which is attached as Exhibit 13. The filing also reports no material pending legal proceedings and a 16,600-employee workforce.
Dec 26, 1996