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

The primary drivers of revenue growth were a 6% increase in global comparable store sales, which included a 5% increase in traffic and a 2% increase in average ticket, and strong growth in the Channel Development segment (up 45%) due to the launch of Starbucks® and Tazo® branded K-Cup® portion packs and increased packaged coffee sales.

How is Starbucks addressing the impact of commodity costs?

Starbucks is experiencing pressure from commodity costs, particularly coffee, which negatively impacted operating income and operating margin. The company is employing mitigation strategies, including hedging with futures contracts for coffee, and focusing on operational efficiencies and sales leverage to offset these costs.

What is the outlook for Starbucks in fiscal year 2013?

For fiscal year 2013, Starbucks expects mid-single-digit comparable store sales growth, approximately 1,200 net new store openings, and continued strong growth in the Channel Development business. The company anticipates a consolidated operating margin improvement of 50 to 100 basis points and EPS growth of 15% to 20%.

What is the status of the arbitration with Kraft Foods?

The arbitration with Kraft Foods, related to a distribution agreement, is in progress. Starbucks believes it has valid claims of material breach by Kraft and that Kraft's damage estimates are inflated. While an unfavorable outcome is considered reasonably possible, Starbucks believes it has adequate liquidity to manage any potential outcome, and no loss contingency has been recorded at this time.

SBUX 10-Q Filed Aug 2, 2012

Summary

Starbucks Corporation's (SBUX) third-quarter 2012 filing reveals a strong performance with total net revenues increasing by 12.7% to $3.3 billion, driven by robust global comparable store sales growth of 6%. Diluted earnings per share saw a significant 19% rise to $0.43, showcasing the company's ability to grow profitability despite commodity cost pressures. The company continues to expand its global footprint, with notable growth in the China/Asia Pacific and Channel Development segments. The company highlights its strategic focus on operational efficiencies, new product offerings like the Starbucks® Blonde Roast and K-Cup® portion packs, and a commitment to returning value to shareholders through dividends and share repurchases. While facing macroeconomic challenges in certain regions, Starbucks demonstrates resilience and a clear path for continued growth, supported by strong cash flow generation and a healthy balance sheet. Investors can take note of the company's optimistic outlook for fiscal year 2013, anticipating further revenue growth and operating margin improvement.

Key Highlights

1Total net revenues grew 12.7% year-over-year to $3.3 billion.
2Diluted earnings per share increased by 19% to $0.43.
3Global comparable store sales increased by 6%, with traffic up 5%.
4Channel Development segment revenue surged by 45%, driven by K-Cup® and packaged coffee sales.
5China/Asia Pacific segment revenue rose 31%, indicating strong international market performance.
6The company maintained a strong cash position, with cash and short-term investments totaling $2.5 billion.
7Starbucks expects continued revenue growth and operating margin improvement in fiscal year 2013.

STARBUCKS CORP Quarterly Report for Q3 Ended Jul 1, 2012

Summary

Key Highlights

Frequently Asked Questions