STARBUCKS CORP Quarterly Report for Q3 Ended Apr 1, 2012

Summary

Starbucks Corporation (SBUX) reported strong financial results for the second quarter ended April 1, 2012. The company demonstrated robust revenue growth of 15%, reaching $3.2 billion, driven by a 7% increase in global comparable store sales. This growth was fueled by a 6% rise in traffic and a 1% increase in average ticket size. The Channel Development segment saw a significant 57% revenue increase, bolstered by the successful launch of K-Cup® packs and the transition to a direct distribution model for packaged coffee. Profitability also showed positive trends, with diluted earnings per share (EPS) increasing by 18% to $0.40. Despite facing approximately $64 million in headwinds from commodity costs impacting operating income, Starbucks managed to deliver growth. The company continues to invest in strategic initiatives, including store renovations, new product development, and international expansion, particularly in China, which remains a key growth market. The acquisition of Evolution Fresh also diversifies the company's product offerings.

Key Highlights

• 1Total net revenues increased by 15% to $3.2 billion, driven by strong global comparable store sales growth of 7%.
• 2Diluted Earnings Per Share (EPS) grew by 18% to $0.40, indicating improved profitability.
• 3Company-operated stores revenue increased by 9.9%, and licensed stores revenue saw a 22.1% jump.
• 4The Channel Development segment experienced significant revenue growth of 57%, driven by new product launches and distribution model changes.
• 5Americas segment showed robust performance with 8% comparable store sales growth, largely attributed to increased traffic.
• 6China/Asia Pacific segment reported strong revenue growth of 32%, with China being a key driver, and is on track for its 2015 store goal.
• 7The company acquired Evolution Fresh, Inc., a super-premium juice company, to expand its product portfolio.

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