- 38% Increase in Net Earnings
- Accelerating Fiscal 2001 Global Store Opening Targets to 1,200
- Reaffirming Fiscal 2001 Earnings Per Share Target
Starbucks Corporation (Nasdaq:SBUX) yesterday announced revenues and earnings for the second quarter of fiscal 2001.
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For the second quarter ended April 1, 2001, consolidated net revenues increased 24 percent to $629 million from $507 million for the second quarter of fiscal 2000. Retail revenues increased 22 percent to $523 million and specialty revenues increased 37 percent to $106 million. Comparable store sales increased 6 percent as compared with the second quarter of fiscal 2000.
Systemwide retail store sales, which include net revenues for both company-operated and licensed retail stores, increased 30 percent to $679 million for the second quarter of fiscal 2001 from $521 million for the same period in fiscal 2000.
Net earnings for the second fiscal quarter of 2001 increased 38 percent to $32.2 million compared to $23.4 million in the second fiscal quarter of 2000. Diluted earnings per share were $0.16 for the second quarter of 2001 compared to $0.12 for the second quarter of 2000 or, on a split-adjusted basis, $0.08 per share for the second quarter of 2001 compared to $0.06 per share for the same period in fiscal 2000. As previously announced, a 2-for-1 stock split will be effective after the close of trading on April 27, 2001.
For the 26 weeks ended April 1, 2001, consolidated net revenues increased 25 percent to $1.3 billion from $1.0 billion for the same period in fiscal 2000. Retail revenues increased 25 percent to $1.1 billion, and specialty revenues increased 27 percent to $211 million. Comparable store sales for the 26-week period ended April 1, 2001 increased 8 percent as compared to the same 26-week period in fiscal 2000.
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By GlobalDataSystemwide retail store sales, which include net revenues for both company-operated and licensed retail stores, increased 35 percent to $1.4 billion for the 26 weeks ended April 1, 2001 from $1.0 billion for the same period in fiscal 2000.
Net earnings increased 40 percent to $81.2 million for the 26-week period ended April 1, 2001 compared to $58.2 million for the same period in fiscal 2000. Diluted earnings per share were $0.41 for the 26-week period ended April 1, 2001 compared to $0.30 for the same period in fiscal 2000 or, on a split-adjusted basis, $0.21 per share for the 26-week period in fiscal 2001 compared to $0.15 per share for the same period in fiscal 2000.
The Company reiterated its fiscal 2001 split-adjusted earnings per share target of $0.46, and announced the following revised fiscal 2001 goals:
- The Company increased its fiscal 2001 global store openings target to 1,200 from the previously targeted 1,100 new stores. The Company now plans to open at least 500 company-operated locations and 400 licensed locations in Continental North America, and at least 100 company-operated and 200 licensed locations in International markets;
- Due to current economic trends, strong fiscal 2000 double digit comparable store sales comparisons, and the August anniversary of its system-wide North America price increase, the Company adjusted its comparable store sales expectations to low single digits, with monthly anomalies, for the remainder of fiscal 2001;
- In conjunction with revised comparable store sales expectations, the Company also adjusted its full year, total revenue growth target from 25 percent to 23-25 percent with a monthly total revenue growth range of 20-25 percent for the remainder of fiscal 2001.
“We are extremely pleased with our strong second quarter results,” said Orin Smith, Starbucks president and ceo. “We are on track to achieve our fiscal 2001 split-adjusted earnings per share target of $0.46 and are as enthusiastic as ever about the Company’s long term growth potential.”
STORE INFORMATION
Net stores opened
during the
26 weeks ended Stores open as of
April 1, 2001 April 1, 2001
————- ————-
Continental North America:
Company-Operated Stores 256 2,702
Licensed Stores 182 712
— —–
438 3,414
International:
Company-Operated Stores 49 222
Licensed Stores 147 499
— —–
196 721
Total 634 4,135
=== =====
Starbucks Coffee Company is the leading retailer, roaster and brand of specialty coffee in the world. In addition to its more than 4,100 retail locations in North America, the United Kingdom, Continental Europe, the Pacific Rim and the Middle East, Starbucks sells coffee and tea products through its specialty operations, including its online store at www.starbucks.com. Additionally, Starbucks produces and sells bottled Frappuccino® coffee drink and a line of superpremium ice creams through its joint venture partnerships. The Company’s other brands enhance the Starbucks Experience through best-of-class products: Tazo Tea Company offers a line of innovative premium teas, and Hear Music produces and distributes a line of exceptional compact discs.
CONSOLIDATED STATEMENT OF EARNINGS
Three Months Ended Six Months Ended
—————— —————-
Apr. 1, Apr. 2, Apr. 1, Apr. 2,
2001 2000 2001 2000
(13 weeks) (13 weeks) (26 weeks) (26 weeks)
———- ———- ———- ———-
Systemwide retail store
sales (a) $ 679,000 $ 521,000 $1,401,000 $1,041,000
Net revenues
Retail $ 523,277 $ 429,031 $1,085,684 $ 869,816
Specialty 106,011 77,637 210,991 166,184
———- ———- ———- ———-
Total net revenues 629,288 506,668 1,296,675 1,036,000
Cost of sales
and related occupancy 271,178 225,240 563,398 465,954
———- ———- ———- ———-
Gross margin 358,110 281,428 733,277 570,046
Joint venture income 6,167 3,821 10,972 7,216
Store operating expense 208,608 169,257 418,298 333,457
Other operating expense 23,785 20,212 45,571 37,957
Depreciation and
amortization 38,597 31,951 76,159 61,241
General and administrative 42,433 28,622 77,310 54,767
———- ———- ———- ———-
Operating income 50,854 35,207 126,911 89,840
Interest/other income, net 1,560 2,242 3,273 3,656
———- ———- ———- ———-
Earnings before
income taxes 52,414 37,449 130,184 93,496
Income taxes 20,204 14,043 48,979 35,341
———- ———- ———- ———-
Net earnings $ 32,210 $ 23,406 $ 81,205 $ 58,155
========== ========== ========== ==========
Pre stock split:
Earnings per share-diluted $ 0.16 $ 0.12 $ 0.41 $ 0.30
Shares used in calculation 197,850 192,417 197,340 191,041
Post stock split:
Earnings per share-diluted $ 0.08 $ 0.06 $ 0.21 $ 0.15
Shares used in calculation 395,701 384,835 394,679 382,083
Selected Balance Sheet Data (in millions): Apr. 1, 2001 Oct. 1, 2000
———— ————
(audited)
Cash and Short-term Investments $ 266 $ 132
Long-term Debt $ 7 $ 7
Equity $ 1,292 $ 1,148
(a) Systemwide retail store sales include net revenues for both
Company-operated and licensed retail stores.
CONSOLIDATED STATEMENT OF EARNINGS
Three Months Ended Six Months Ended
—————— —————-
Apr. 1, Apr. 2, Apr. 1, Apr. 2,
2001 2000 2001 2000
(13 weeks) (13 weeks) (26 weeks) (26 weeks)
———- ———- ———- ———-
Net revenues
Retail 83.2% 84.7% 83.7% 84.0%
Specialty 16.8% 15.3% 16.3% 16.0%
—– —– —– —–
Total net revenues 100.0% 100.0% 100.0% 100.0%
Cost of sales
and related occupancy 43.1% 44.5% 43.4% 45.0%
—– —– —– —–
Gross margin 56.9% 55.5% 56.6% 55.0%
Joint venture income 1.0% 0.8% 0.8% 0.7%
Store operating expense (a) 39.9% (a) 39.5% (a) 38.5% (a) 38.3%
Other operating expense (b) 22.4% (b) 26.0% (b) 21.6% (b) 22.8%
Depreciation and
amortization 6.1% 6.3% 5.9% 5.9%
General and administrative 6.7% 5.6% 6.0% 5.3%
Operating income 8.1% 7.0% 9.8% 8.7%
Interest/other income, net 0.2% 0.4% 0.3% 0.3%
—- —- —- —-
Earnings before
income taxes 8.3% 7.4% 10.1% 9.0%
Income taxes 3.2% 2.8% 3.8% 3.4%
—- —- —- —-
Net earnings 5.1% 4.6% 6.3% 5.6%
- (a) Calculated as a percentage of retail revenues.
- (b) Calculated as a percentage of specialty revenues.
