01—Abstract
Summary
Summary of the 10-K filed November 18, 2016. Cited figures are marked; the original filing is the authoritative source.
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 billiona, 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 billionb 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.
02—Key points
Key Highlights
- Total net revenues increased by 11% to $21.3 billion in fiscal 2016.
- Global comparable store sales grew by 5%, driven by a 4% increase in average ticket and a 1% increase in transactions.
- Operating income increased to $4.2 billion, with an operating margin of 19.6%, up from 18.8% in the prior year.
- The company returned $3.2 billion to shareholders through share repurchases and dividends.
- Starbucks opened 2,042 net new stores globally, expanding its retail footprint.
- Investments in partners (employees) and digital platforms increased, reflecting a focus on enhancing customer experience and operational efficiency.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2016, Starbucks Corp kept $0.13.
- Revenue$21.32B100.0%
- Cost of revenue−$8.51B39.9%
- Gross profit$12.81B60.1%
- Operating costs−$8.63B40.5%
- Operating income$4.17B19.6%
- Interest, other & tax−$1.35B6.4%
- Net income$2.82B13.2%
Where FY2016 revenue went
$21.32B- Operating costs: $8.63B, 41% of revenue
- Cost of revenue: $8.51B, 40% of revenue
- Net income: $2.82B, 13% of revenue
- Interest, other & tax: $1.35B, 6.4% of revenue
Kept 13% as net incomeNet income $2.82B · 13%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2016filed November 18, 2016Financial Statements
FY2016 against FY2015
| Line item | FY2016FY2015 | Change |
|---|---|---|
| Revenue | $21.32B$19.16B | +11.2% |
| Cost of Revenue | $8.51B$7.79B | +9.3% |
| Gross Profit | $12.81B$11.38B | +12.6% |
| Operating Expenses | $17.46B$15.81B | +10.4% |
| Operating Income | $4.17B$3.60B | +15.9% |
| Interest Expense | $81.30M$70.50M | +15.3% |
| Net Income | $2.82B$2.76B | +2.2% |
| EPS (Basic) | $1.91$1.84 | +3.8% |
| EPS (Diluted) | $1.90$1.82 | +4.4% |
| Shares Outstanding (Basic) | 1.47B1.50B | −1.6% |
| Shares Outstanding (Diluted) | 1.49B1.51B | −1.8% |
05—Questions
Frequently Asked Questions
What was Starbucks' revenue growth in fiscal year 2016?
Starbucks reported an 11% increase in total net revenues, reaching $21.3 billion in fiscal year 2016.
How did Starbucks' operating margin perform in fiscal year 2016?
The operating margin improved to 19.6% in fiscal year 2016, up from 18.8% in fiscal year 2015, driven by sales leverage and lower commodity costs.
What is the company's strategy for shareholder returns?
Starbucks returned $3.2 billion to shareholders in fiscal year 2016 through a combination of share repurchases and cash dividends, demonstrating a commitment to returning capital to investors.
What are the key drivers for Starbucks' future growth?
Starbucks' growth is expected to be driven by its '7 Strategies for Growth,' which include being an employer of choice, elevating coffee, growing the store portfolio, creating new customer occasions, driving at-home coffee share, building the Teavana brand, and extending digital engagement.
06—Continue