What were the primary drivers of Starbucks' revenue growth in the third quarter of fiscal year 2016?

Starbucks' revenue growth was primarily driven by incremental revenues from 1,876 net new store openings over the last 12 months, a global comparable store sales growth of 4%, and increased product sales to and royalty revenues from its licensees. The Americas and China/Asia Pacific segments were notable contributors to this growth.

How did Starbucks' profitability fare in the third quarter?

Profitability improved significantly. Consolidated operating income increased by 9% to $1.0 billion, and the operating margin expanded by 30 basis points to 19.5%. This was primarily due to sales leverage and lower coffee costs, although these gains were partially offset by increased investments in partners (employees) and digital platforms.

What is the company's outlook for the full fiscal year 2016?

For fiscal year 2016, Starbucks expected revenue growth of approximately 10% (including an estimated 2% from a 53rd fiscal week). This growth was projected to be driven by mid-single-digit global comparable store sales and the addition of about 1,900 net new stores. Full-year EPS was forecasted to be between $1.88 and $1.89, with investments in partners and digital platforms being a key factor influencing margins.

How is Starbucks managing commodity price risks, particularly for coffee?

Starbucks actively manages commodity price risks, especially for green coffee, through various strategies. As of June 26, 2016, the company had committed to purchasing green coffee under fixed-price contracts totaling $567 million and an estimated $433 million under price-to-be-fixed contracts. Some of these price-to-be-fixed contracts were hedged using futures contracts. These measures aim to mitigate the impact of price volatility on their cost of sales.

SBUX 10-Q Quarterly Report Q3 FY2016 — Revenue, Net Income, EPS

Summary

Starbucks Corporation (SBUX) reported strong third-quarter results for fiscal year 2016, showcasing robust revenue growth and increased profitability. Total net revenues rose by 7% to $5.2 billion, driven by a combination of new store openings (1,876 net new stores over the past 12 months), a 4% increase in global comparable store sales, and higher revenue from licensed stores. Operating income saw a significant 9% increase to $1.0 billion, with operating margin expanding by 30 basis points to 19.5%, attributed to sales leverage and lower coffee costs, partially offset by investments in employees and digital platforms. Key financial metrics indicate positive momentum. Diluted earnings per share (EPS) increased by 24% to $0.51 compared to the prior year quarter's $0.41. The company's strong performance was evident across its segments, particularly in the Americas and China/Asia Pacific regions, with strategic expansion and innovation contributing to growth. Starbucks also highlighted its commitment to returning capital to shareholders, with significant share repurchases and dividend declarations, underscoring a healthy financial position and confidence in future performance.

Financial Highlights

58 data points

Beta

Revenue

$5.24B

0.6% Gross Margin

Net Income

$754.10M

0.1% Net Margin

EPS (Diluted)

$0.51

Total Assets

$13.83B

Cash & Equivalents

$2.14B

Free Cash Flow

$719.90M

Financial Statements

Beta

Revenue	$5.24B
Cost of Revenue	$2.06B
Gross Profit	$3.18B
Operating Expenses	$4.30B
Operating Income	$1.02B
Interest Expense	$21.80M
Net Income	$754.10M
EPS (Basic)	$0.51
EPS (Diluted)	$0.51
Shares Outstanding (Basic)	1.47B
Shares Outstanding (Diluted)	1.48B

Key Highlights

1Total net revenues increased by 7% year-over-year to $5.2 billion for the third quarter.
2Global comparable store sales grew by 4% in the third quarter.
3Operating income increased by 9% to $1.0 billion, with operating margin expanding to 19.5%.
4Diluted Earnings Per Share (EPS) grew significantly by 24% to $0.51 compared to the prior year quarter.
5The company added 1,876 net new stores globally over the past 12 months, indicating continued expansion.
6Investments in partners (employees) and digital platforms are noted as key drivers, impacting margins but seen as strategic for future growth.
7The China/Asia Pacific segment showed robust revenue growth of 18%, highlighting its increasing importance.

STARBUCKS CORP Quarterly Report for Q3 Ended Jun 26, 2016

Summary

Financial Highlights

Key Highlights

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