Summary
Starbucks Corporation reported solid financial results for the quarter and first two quarters ended March 31, 2019. Total net revenues increased by 4.5% to $6.3 billion for the quarter and 6.9% to $12.9 billion for the two-quarter period, driven by growth in company-operated and licensed stores. The company demonstrated effective cost management, with operating income increasing by 11.0% year-over-year for the quarter to $857.7 million, despite some expense pressures in store operating and general administrative costs. Net earnings attributable to Starbucks grew slightly to $663.2 million for the quarter, with diluted earnings per share at $0.53. The company continued its strategic focus on growth and shareholder returns. Significant share repurchases totaling $7.7 billion were executed in the first half of the fiscal year, underscoring a commitment to returning capital to investors. Investments in new store openings and operational efficiencies remain a priority. The company also highlighted the ongoing impact of its strategic partnership with Nestlé, which continues to influence the Channel Development segment's revenue and cost structure. Starbucks reaffirmed its financial guidance and outlook for the remainder of fiscal year 2019, expressing confidence in its long-term growth model.
Financial Highlights
57 data points| Revenue | $6.31B |
| Cost of Revenue | $2.01B |
| Gross Profit | $4.29B |
| Operating Expenses | $5.51B |
| Operating Income | $857.70M |
| Interest Expense | $73.90M |
| Net Income | $663.20M |
| EPS (Basic) | $0.54 |
| EPS (Diluted) | $0.53 |
| Shares Outstanding (Basic) | 1.24B |
| Shares Outstanding (Diluted) | 1.25B |
Key Highlights
- 1Total net revenues increased by 4.5% to $6.3 billion for the quarter ended March 31, 2019, and by 6.9% to $12.9 billion for the two-quarter period, driven by company-operated and licensed store growth.
- 2Operating income saw a healthy increase of 11.0% year-over-year for the quarter, reaching $857.7 million, reflecting effective cost management.
- 3Net earnings attributable to Starbucks for the quarter were $663.2 million, resulting in diluted earnings per share of $0.53.
- 4The company executed substantial share repurchases totaling $7.7 billion in the first half of the fiscal year, demonstrating a strong commitment to returning capital to shareholders.
- 5Store operating expenses as a percentage of company-operated store revenues increased by 70 basis points in the quarter, primarily due to increased partner investments and wage/benefit growth.
- 6The Channel Development segment experienced a revenue decline of 21% for the quarter, largely due to the ongoing impact of licensing the CPG and Foodservice businesses to Nestlé.
- 7Starbucks maintained a strong liquidity position with $2.4 billion in cash and investments as of March 31, 2019, and significant borrowing capacity through its credit facilities.