What was the primary driver of Starbucks' revenue growth in this quarter?

The primary driver of Starbucks' revenue growth was the significant expansion of its retail footprint, with the opening of 670 new company-operated stores and 704 new licensed stores over the preceding 12 months. This was complemented by strong comparable store sales growth of 10% in company-operated markets, largely driven by an increase in customer transactions.

How did Starbucks manage its operating expenses relative to its revenue growth?

Starbucks demonstrated effective cost management. While total revenues grew by 27.7%, several operating expense line items grew at a slower pace or even decreased as a percentage of revenue. This leverage, particularly in cost of sales, store operating expenses, and general and administrative expenses, contributed to the improvement in operating margin to 13.7% from 12.0% in the prior year.

What is Starbucks' outlook for future store growth?

Starbucks has an ambitious outlook for future store growth, planning to open approximately 1,300 new retail stores globally in fiscal year 2004. This includes plans for 525 new company-operated and 350 licensed locations in the United States, and approximately 100 company-operated and 325 licensed locations internationally. Management believes it has the resources to sustain this high rate of expansion for the foreseeable future.

How is Starbucks managing its international expansion and its associated risks?

Starbucks is actively expanding its international presence through both company-operated and licensed stores. The company has a presence in over 30 countries and aims for at least 25,000 retail locations globally in the long term. The filing mentions efforts to mitigate foreign currency exchange risks through derivative financial instruments and highlights the company's ongoing international investments, noting that international operations are still in an early stage of development.

SBUX 10-Q Quarterly Report Q1 FY2004 — Revenue, Net Income, EPS

Summary

Starbucks Corporation (SBUX) reported strong financial performance for the first quarter of fiscal year 2004, ending December 28, 2003. The company saw a significant increase in net revenues, driven by robust expansion in both company-operated and licensed stores, alongside impressive comparable store sales growth. Key financial metrics demonstrate substantial year-over-year improvements. Net earnings and earnings per share saw considerable growth, indicating efficient operations and effective growth strategies. The company's strategic focus on new store development and enhancing in-store customer experience is clearly paying off, positioning Starbucks favorably for continued expansion and profitability in the upcoming fiscal year. Investors should note the company's confident outlook and its stated targets for store openings and revenue growth.

Key Highlights

1Total net revenues increased by 27.7% to $1.3 billion for the 13 weeks ended December 28, 2003, compared to $1.0 billion in the prior year period.
2Net earnings rose significantly by 41.4% to $110.8 million from $78.4 million in the same period last year.
3Earnings per share (diluted) increased to $0.27 from $0.20 in the prior year, a 35% growth.
4Comparable store sales in company-operated markets increased by 10% in the first quarter of fiscal 2004.
5The company opened a significant number of new stores, adding 342 net new stores globally in the quarter, bringing the total store count to 7,567.
6Operating margin improved to 13.7% from 12.0% in the prior year's comparable period, reflecting operational leverage.
7The company maintained a strong cash position, with cash and cash equivalents increasing by $247.4 million during the quarter to $448.3 million.

STARBUCKS CORP Quarterly Report for Q1 Ended Dec 28, 2003

Summary

Key Highlights

Frequently Asked Questions