STARBUCKS CORP Quarterly Report for Q1 Ended Dec 27, 2015

Summary

Starbucks Corporation reported strong performance for the first quarter of fiscal year 2016, with total net revenues increasing by 11.9% to $5.37 billion compared to the prior year quarter. This growth was primarily driven by an 8% increase in global comparable store sales, the addition of 1,693 net new stores, and incremental revenue from the full consolidation of Starbucks Japan. Despite a $107 million negative impact from foreign currency translation, operating income rose by 16% to $1.1 billion, leading to an improved operating margin of 19.7%. While the Americas segment showed robust growth with an 11% revenue increase and an 80 basis point operating margin expansion, the China/Asia Pacific segment's revenue surged 32% due to the Starbucks Japan consolidation, though its operating margin declined. The company reaffirmed its positive outlook for fiscal year 2016, projecting revenue growth exceeding 10% and earnings per share between $1.84 and $1.86, supported by continued store expansion and investments in digital platforms and employee benefits.

Key Highlights

• 1Total net revenues increased by 11.9% to $5.37 billion, driven by comparable store sales growth of 8% and 1,693 net new store openings.
• 2Operating income grew 16% to $1.1 billion, with operating margin expanding 60 basis points to 19.7%.
• 3The Americas segment reported strong revenue growth of 11% and an 80 basis point increase in operating margin.
• 4China/Asia Pacific segment revenues increased by 32%, primarily due to the full consolidation of Starbucks Japan.
• 5The company repurchased $267.1 million of its common stock during the quarter.
• 6Starbucks announced a new $1.5 billion unsecured, revolving credit facility, replacing its previous $750 million facility.
• 7Full-year fiscal 2016 earnings per share are projected to be between $1.84 and $1.86.

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