What was the primary driver of revenue growth in the first quarter of fiscal 2015?

The primary driver of revenue growth was the acquisition of the remaining 60.5% stake in Starbucks Japan, which contributed incremental revenues. This was complemented by a 5% increase in global comparable store sales and revenue from 1,641 net new store openings over the past 12 months.

How did the acquisition of Starbucks Japan impact the company's financial results?

The acquisition of Starbucks Japan significantly boosted revenue and contributed to a substantial gain on the remeasurement of the previously held equity interest ($390.6 million pre-tax). However, it also led to an 80 basis point impact on operating margin due to the change in accounting from a joint venture to a consolidated market and associated transaction/integration costs. Diluted EPS of $1.30 included a $0.49 benefit related to these acquisition items.

What is the outlook for Starbucks' revenue and profitability in fiscal year 2015?

For fiscal year 2015, Starbucks expects continued revenue growth, driven by the Starbucks Japan acquisition, 1,650 net new store openings, and mid-single-digit global comparable store sales growth. Consolidated operating margin is expected to decline slightly compared to fiscal 2014 due to the mildly dilutive margin impact from the Starbucks Japan acquisition. However, the company anticipates strong EPS growth over fiscal 2014.

How is Starbucks managing commodity price risks?

Starbucks manages commodity price risks, primarily for green coffee and dairy products, through various strategies. This includes using coffee futures contracts and collars to hedge anticipated cash flows from green coffee purchases. For dairy products and diesel fuel, they utilize swap contracts, futures, and collars. Gains and losses from these derivatives are recorded and help to offset price fluctuations.

SBUX 10-Q Quarterly Report Q1 FY2015 — Revenue, Net Income, EPS

Summary

Starbucks Corporation (SBUX) reported strong results for the first quarter of fiscal year 2015, ending December 28, 2014. Total net revenues increased by 13% year-over-year to $4.8 billion, significantly boosted by the acquisition of the remaining 60.5% stake in Starbucks Japan. This acquisition, completed in two steps during the quarter, contributed incremental revenues and expanded the company's footprint in a key international market. Despite the operational complexities and accounting impacts of the Starbucks Japan acquisition, which led to a slight decline in operating margin (10 basis points to 19.1%), the company delivered robust earnings growth. Diluted earnings per share (EPS) surged by 83% to $1.30, benefiting from the acquisition-related gains and a strong operational performance across most segments. The Americas segment showed solid growth with a 5% increase in comparable store sales, while EMEA saw margin expansion due to a strategic shift towards licensed stores. China/Asia Pacific's results were significantly impacted by the consolidation of Starbucks Japan, leading to a substantial revenue increase but a notable margin decrease due to the accounting shift. Looking ahead, Starbucks anticipates continued revenue growth driven by new store openings and comparable store sales increases. While the company expects a slight decline in overall operating margin for fiscal year 2015 due to the Starbucks Japan acquisition's impact, it projects strong EPS growth, underscoring its confidence in its global business strategy and ongoing profitability initiatives. The company also continued its commitment to shareholder returns through dividend payments and share repurchases.

Financial Highlights

56 data points

Beta

Revenue

$4.80B

0.6% Gross Margin

Net Income

$983.10M

0.2% Net Margin

EPS (Diluted)

$0.65

Total Assets

$12.35B

Cash & Equivalents

$1.86B

Free Cash Flow

$1.13B

Financial Statements

Beta

Revenue	$4.80B
Cost of Revenue	$1.99B
Gross Profit	$2.81B
Operating Expenses	$3.94B
Operating Income	$915.50M
Interest Expense	$16.30M
Net Income	$983.10M
EPS (Basic)	$0.66
EPS (Diluted)	$0.65
Shares Outstanding (Basic)	1.50B
Shares Outstanding (Diluted)	1.52B

Key Highlights

1Total net revenues increased 13% to $4.8 billion, driven by the acquisition of Starbucks Japan and a 5% increase in global comparable store sales.
2Diluted EPS rose significantly by 83% to $1.30, benefiting from acquisition-related gains and strong operational performance.
3Operating income grew 13% to $916 million, though operating margin slightly decreased by 10 basis points to 19.1% due to the accounting impact of the Starbucks Japan acquisition.
4The acquisition of Starbucks Japan was completed in two steps during the quarter, with the first step on October 31, 2014, and the second step settling on December 29, 2014.
5Americas segment demonstrated solid growth with a 10% revenue increase, driven by 5% comparable store sales growth and new store openings.
6EMEA segment reported a revenue decline but significant operating margin expansion (510 basis points) due to a strategic shift to licensed stores and cost management.
7Starbucks returned $239.5 million to shareholders through cash dividends and repurchased $216.1 million of common stock during the quarter.

STARBUCKS CORP Quarterly Report for Q1 Ended Dec 28, 2014

Summary

Financial Highlights

Key Highlights

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