Summary
Starbucks Corporation (SBUX) reported its first quarter fiscal year 2021 results, ending December 27, 2020. The company demonstrated resilience amidst the ongoing COVID-19 pandemic, with consolidated net revenues declining by 4.9% year-over-year to $6.75 billion. Despite the revenue dip, a key positive was the stabilization of operating cash flows, which remained flat compared to the prior year at $1.8 billion, indicating effective working capital management. Profitability saw a notable decrease, with net earnings attributable to Starbucks falling by 29.6% to $622.2 million, resulting in diluted EPS of $0.53, down from $0.74 in the prior year. This was driven by lower revenues, increased store operating expenses as a percentage of revenue due to sales deleverage and increased wages, and higher restructuring and impairment charges related to store portfolio optimization. However, the company's liquidity remains strong, with $5.0 billion in cash and cash equivalents and $5.5 billion in cash and investments, providing a solid financial footing for navigating the current environment and future investments.
Financial Highlights
52 data points| Revenue | $6.75B |
| Operating Expenses | $5.92B |
| Operating Income | $913.50M |
| Interest Expense | $120.70M |
| Net Income | $622.20M |
| EPS (Basic) | $0.53 |
| EPS (Diluted) | $0.53 |
| Shares Outstanding (Basic) | 1.18B |
| Shares Outstanding (Diluted) | 1.18B |
Key Highlights
- 1Consolidated net revenues decreased by 4.9% to $6.75 billion, primarily impacted by COVID-19 related disruptions.
- 2Operating cash flow remained stable at $1.8 billion, showing resilience despite the pandemic's impact on earnings.
- 3Net earnings attributable to Starbucks declined by 29.6% to $622.2 million, leading to a decrease in diluted EPS from $0.74 to $0.53.
- 4Store operating expenses as a percentage of revenue increased, driven by sales deleverage and increased labor costs, partially offset by efficiencies.
- 5Restructuring and impairment charges significantly increased to $72.2 million, primarily due to store portfolio optimization and lease asset amortization.
- 6The company maintained a strong liquidity position with $5.0 billion in cash and cash equivalents.
- 7Starbucks is continuing its store portfolio optimization strategy, with plans to close approximately 800 stores in the U.S. and Canada.