01—Abstract
Summary
Summary of the 10-K filed November 19, 2021. Cited figures are marked; the original filing is the authoritative source.
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.
02—Key points
Key Highlights
- Total net revenues increased by 24% to $29.1 billion in fiscal 2021, a significant recovery from fiscal 2020.
- North America segment's comparable store sales increased by 22%, with the U.S. market showing a 21% increase, indicating strong recovery.
- International segment also saw a rebound with comparable store sales up 16%, driven by markets like China.
- Operating margin improved substantially to 16.8% in fiscal 2021 from 6.6% in fiscal 2020, due to sales leverage and cost management.
- Diluted earnings per share (EPS) rose to $3.54 in fiscal 2021 from $0.79 in fiscal 2020.
- Starbucks returned $2.1 billion to shareholders via dividends in fiscal 2021 and resumed its share repurchase program.
- The company continues to invest in its partners through wage increases and benefits and is committed to diversity, equity, and inclusion goals.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2021filed November 19, 2021Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $29.06B$23.52B | +23.6% |
| Operating Expenses | $24.57B$22.28B | +10.3% |
| Operating Income | $4.87B$1.56B | +212.0% |
| Interest Expense | $469.80M$437.00M | +7.5% |
| Net Income | $4.20B$928.30M | +352.4% |
| EPS (Basic) | $3.57$0.79 | +351.9% |
| EPS (Diluted) | $3.54$0.79 | +348.1% |
| Shares Outstanding (Basic) | 1.18B1.17B | +0.4% |
| Shares Outstanding (Diluted) | 1.19B1.18B | +0.3% |
05—Questions
Frequently Asked Questions
How did Starbucks perform financially in fiscal year 2021 compared to fiscal year 2020?
Starbucks experienced a strong recovery in fiscal year 2021, with total net revenues increasing by 24% to $29.1 billion, up from $23.5 billion in fiscal 2020. This growth was driven by a significant rebound in comparable store sales across both North America and International segments, improved operating margins, and a substantial increase in diluted earnings per share to $3.54.
What are the key drivers behind the revenue growth in fiscal 2021?
The primary drivers for revenue growth in fiscal 2021 were the strong recovery in comparable store sales (up 22% in North America and 16% internationally), which benefited from increased transactions and higher average ticket prices. The opening of new company-operated stores and favorable foreign currency translation also contributed to the top-line growth.
What is Starbucks' strategy regarding its employees and store footprint?
Starbucks continues to emphasize its 'Growth at Scale' agenda, which includes disciplined global store expansion and optimizing the store portfolio. The company is also investing in its partners (employees) by offering competitive wages and benefits, aiming to be an 'employer of choice'. Diversity, equity, and inclusion remain key priorities, with specific commitments and programs in place.
What are the main risks Starbucks identified for its future operations?
Starbucks identified several key risks, including the ongoing impact of macroeconomic conditions like inflation and potential future COVID-19 variants, supply chain disruptions, intense competition, cybersecurity threats, and geopolitical events. The company also highlighted risks related to maintaining brand relevance and successfully executing its strategic initiatives.
06—Continue