What were the primary drivers of revenue growth in this quarter?

Revenue growth was primarily driven by the significant expansion of both company-operated and licensed retail stores. The company opened 227 new company-operated stores during the quarter and plans to open over 600 in the upcoming fiscal year. Specialty revenues also contributed positively, boosted by royalties and product sales to licensees.

How did Starbucks manage its costs in the face of increased revenue?

Starbucks saw a decrease in cost of sales and related occupancy costs as a percentage of net revenue, primarily due to lower green coffee costs and centralized procurement efforts. However, store operating expenses as a percentage of retail revenue increased slightly due to higher payroll costs associated with wage increases and a shift towards more labor-intensive handcrafted beverages.

What is the company's outlook for future growth and expansion?

The company has a robust growth strategy centered on expanding its retail footprint, with plans to open at least 625 new company-operated stores in fiscal year 2002. They also anticipate opening at least 575 licensed stores globally. Management believes their current cash position and operational cash flow are sufficient to fund these capital expenditures.

Are there any significant legal proceedings that could impact the company?

Starbucks is currently involved in two class-action lawsuits in California related to employee classification under wage and hour laws. While the company is vigorously defending these claims and is pursuing mediation, the outcome and potential financial impact cannot be predicted at this time. However, management does not believe any other legal proceedings will have a material adverse effect on the company's financial position or results of operations.

SBUX 10-Q Quarterly Report Q1 FY2002 — Revenue, Net Income, EPS

Summary

Starbucks Corporation reported strong financial results for the first quarter of fiscal year 2002, ending December 30, 2001. Net revenues surged by 21% to $805.3 million compared to the prior year's quarter, driven by a 21% increase in retail revenues and a 17% rise in specialty revenues. This growth was fueled by the aggressive expansion of company-operated and licensed stores, with 183 new company-operated stores opened in North America and 36 in the UK during the quarter. Net earnings also saw a significant increase of approximately 39.5%, reaching $68.4 million, translating to diluted earnings per share of $0.17, up from $0.12 in the same period last year. The company benefited from lower green coffee costs and a gain on the sale of investment in Starbucks Japan. Despite some increases in store operating expenses due to higher payroll costs, overall cost of sales and occupancy costs as a percentage of net revenue decreased. Starbucks is well-positioned for continued growth, with plans to open at least 625 new company-operated stores in fiscal year 2002 and a solid cash position to fund these initiatives.

Key Highlights

1Net revenues increased by 21% to $805.3 million in the quarter ended December 30, 2001, compared to $667.4 million in the prior year.
2Net earnings grew by approximately 39.5% to $68.4 million, with diluted earnings per share rising to $0.17 from $0.12.
3Systemwide retail store sales increased by 26% to $910 million, primarily due to the opening of 1,287 new stores in the past 12 months.
4Company-operated retail stores expanded significantly, with 227 new stores opened during the quarter and plans to open at least 625 in fiscal year 2002.
5Specialty revenues grew by 17% to $123.1 million, driven by higher royalties and product sales to domestic and international licensees.
6The company recognized a gain of $13.4 million from the sale of a portion of its investment in Starbucks Japan.
7Starbucks ended the period with a strong liquidity position, with $226.8 million in cash and cash equivalents and $212 million in working capital.

STARBUCKS CORP Quarterly Report for Q1 Ended Dec 30, 2001

Summary

Key Highlights

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