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

The primary driver of revenue growth was the opening of new retail stores, both company-operated and licensed, contributing to a 20.1% increase in total net revenues. Company-operated retail revenue increased by 21.1% due to new store openings and a 4% increase in comparable store sales.

How did the company's international operations perform?

International operations showed strong performance, with net revenues increasing by 28.1% to $432 million for the 13 weeks ended July 1, 2007. This growth was driven by both company-operated and licensed stores, along with a 7% increase in comparable store sales in international markets.

What are the company's plans for future growth and store expansion?

Starbucks plans to continue its aggressive store expansion, opening at least 2,400 net new stores globally in fiscal 2007. They plan to open approximately 1,000 company-operated and 700 licensed locations in the United States, and approximately 300 company-operated and 400 licensed stores in international markets.

What challenges did Starbucks face during this period?

Starbucks faced challenges including significantly higher dairy costs in the U.S. business, which impacted the cost of sales including occupancy costs. The company also noted increased interest expense due to a higher level of borrowings outstanding.

SBUX 10-Q Filed Aug 10, 2007

Summary

Starbucks Corporation (SBUX) reported strong performance for the fiscal quarter and the first three quarters ending July 1, 2007. Net revenues saw a significant 20% increase year-over-year for the quarter, driven by both company-operated retail stores and specialty operations. The company continues its aggressive expansion, opening 1,956 new stores in the first three quarters and planning for at least 2,400 net new stores in fiscal 2007. Diluted earnings per share also showed positive growth, reaching $0.21 for the quarter, up from $0.18 in the prior year period. Despite facing challenges such as higher dairy costs, Starbucks demonstrated its ability to grow revenue while managing expenses effectively. The international segment showed particularly robust growth in net revenues, up 28% year-over-year for the quarter. Management remains focused on balancing core business growth with investments for future expansion, aiming to increase shareholder value.

Key Highlights

1Net revenues increased by 20.1% to $2.36 billion for the 13 weeks ended July 1, 2007, compared to the prior year period.
2Company-operated retail revenue grew by 21.1% to $2.01 billion, fueled by new store openings and a 4% increase in comparable store sales.
3Net earnings increased by 8.8% to $158.3 million for the 13 weeks ended July 1, 2007.
4Diluted earnings per share rose to $0.21 from $0.18 in the comparable prior year period.
5The company opened 1,956 new stores globally in the first three quarters of fiscal 2007, with plans for at least 2,400 net new stores in fiscal 2007.
6International net revenues saw a significant 28.1% increase, reaching $432 million for the 13 weeks ended July 1, 2007.

STARBUCKS CORP Quarterly Report for Q3 Ended Jul 1, 2007

Summary

Key Highlights

Frequently Asked Questions