Summary
Starbucks Corporation reported its first quarter fiscal year 2025 results, showing a slight decrease in total net revenues to $9.40 billion from $9.43 billion in the prior year, primarily driven by a decline in licensed store revenues. While company-operated store revenues saw a modest increase due to new store openings and an acquisition, this was offset by a 4% decline in comparable store sales globally, with both U.S. and international markets experiencing similar decreases. The company's operating margin contracted significantly, falling by 390 basis points to 11.9%. This was attributed to deleverage, increased investments in store partner wages and benefits as part of the "Back to Starbucks" plan, and the removal of extra charges for non-dairy milk customizations. Despite these challenges, management highlighted early progress on its "Back to Starbucks" plan, focusing on strategic actions and operational efficiencies to drive future improvements. Net earnings attributable to Starbucks decreased to $780.8 million ($0.69 per diluted share) from $1.02 billion ($0.90 per diluted share) in the prior year's quarter. The company's balance sheet remains solid, with total assets of $31.9 billion and significant cash and investment balances. Starbucks continued to return capital to shareholders through its quarterly dividend, though share repurchases were suspended for the current quarter.
Financial Highlights
53 data points| Revenue | $9.40B |
| Operating Expenses | $8.32B |
| Operating Income | $1.12B |
| Interest Expense | $127.20M |
| Net Income | $780.80M |
| EPS (Basic) | $0.69 |
| EPS (Diluted) | $0.69 |
| Shares Outstanding (Basic) | 1.13B |
| Shares Outstanding (Diluted) | 1.14B |
Key Highlights
- 1Total net revenues declined slightly by 0.3% to $9.398 billion, impacted by a 4.7% decrease in licensed store revenues.
- 2Comparable store sales decreased by 4% globally, with both North America and International segments experiencing a 4% decline.
- 3Operating income decreased by 24.4% to $1.12 billion, and the operating margin contracted by 390 basis points to 11.9%.
- 4Net earnings attributable to Starbucks fell 23.8% to $780.8 million, with diluted EPS decreasing to $0.69 from $0.90 year-over-year.
- 5Company-operated store revenue increased by 0.4% to $7.785 billion, driven by 1,347 net new company-operated stores.
- 6The company acquired 23.5 Degrees Topco Limited, converting 113 licensed stores to company-operated in the UK.
- 7Starbucks maintained a strong liquidity position with $4.2 billion in cash and investments and an undrawn $3.0 billion revolving credit facility.