01—Abstract
Summary
Summary of the 10-K filed November 17, 2023. Cited figures are marked; the original filing is the authoritative source.
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 billiona, 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 billionb 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.
02—Key points
Key Highlights
- Total net revenues increased by 12% to $36.0 billion in fiscal 2023.
- Operating income increased to $5.9 billion, with an operating margin expansion of 200 basis points to 16.3%.
- Diluted earnings per share (EPS) grew to $3.58 from $2.83 in the prior year.
- Comparable store sales increased by 9% in North America and 5% internationally.
- The company opened 1,339 net new company-operated stores and 988 net new licensed stores.
- Starbucks returned $3.4 billion to shareholders through share repurchases and dividends in fiscal 2023.
- Capital expenditures were $2.3 billion in fiscal 2023, with expectations for $3.0 billion in fiscal 2024.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2023filed November 17, 2023Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $35.98B$32.25B | +11.6% |
| Operating Expenses | $30.49B$27.87B | +9.4% |
| Operating Income | $5.87B$4.62B | +27.1% |
| Interest Expense | $550.10M$482.90M | +13.9% |
| Net Income | $4.12B$3.28B | +25.7% |
| EPS (Basic) | $3.60$2.85 | +26.3% |
| EPS (Diluted) | $3.58$2.83 | +26.5% |
| Shares Outstanding (Basic) | 1.15B1.15B | −0.6% |
| Shares Outstanding (Diluted) | 1.15B1.16B | −0.6% |
05—Questions
Frequently Asked Questions
What was Starbucks' overall financial performance in fiscal year 2023?
Starbucks reported a strong fiscal year 2023, with total net revenues increasing by 12% to $36.0 billion. The company also saw significant improvement in profitability, with operating income rising to $5.9 billion and diluted earnings per share increasing to $3.58. This performance was largely driven by comparable store sales growth in both North America and International segments, as well as strategic investments in store operations and technology.
How did Starbucks' "Reinvention Plan" impact its financial results?
The Reinvention Plan, which focuses on increasing efficiency, elevating the partner and customer experience through investments in wages, training, and technology, contributed to positive financial outcomes. These investments helped drive in-store operational efficiencies and sales leverage, which more than offset increased labor costs, leading to an expansion in operating margin. The plan also supported the acceleration of new store formats and digital innovations.
What is Starbucks' outlook for growth and shareholder returns in the upcoming year?
Starbucks anticipates continued global new store growth in fiscal year 2024, supported by a diverse portfolio of store formats and international brand strength. The company expects benefits from increased sales leverage and pricing strategies, while anticipating moderating inflationary pressures. Starbucks remains committed to returning cash to shareholders through dividends and share repurchases, with capital expenditures planned at approximately $3.0 billion for fiscal year 2024.
What are the key risks that Starbucks highlighted in its 10-K filing?
Starbucks identified several key risk factors, including those related to brand relevance and execution, competition, supply chain disruptions, macroeconomic conditions, human capital management (including labor costs and unionization efforts), cybersecurity, data privacy, and the impact of climate change. The company also noted specific risks related to its significant international operations, particularly in China.
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