Starbucks Reports Record Q3 Financial and Operating Results

GAAP EPS Up 24% to a Q3 Record $0.51 Per Share; Non-GAAP EPS Up 17% to a Record $0.49 Per Share

Comparable Store Sales Rise 7% in China, 4% in the U.S. and 4% Globally; Revenues Up 7% to Q3 Record $5.2 Billion

Operating Income Up 9% to a Q3 Record $1.0 Billion; Channel Development Revenues Increase 9%; Operating Income Jumps 31%

Starbucks Rewards Active Membership Up 18% YOY; Now Over 12 Million Active Members in the U.S. and Canada

SEATTLE; July 21, 2016 – Starbucks Corporation (NASDAQ: SBUX) today reported financial results for its 13-week fiscal third quarter and 39-week fiscal year to date ended June 26, 2016. Fiscal 2016 and fiscal 2015 GAAP results include items which are excluded from non-GAAP results. Please refer to the reconciliation of GAAP measures to non-GAAP measures at the end of this release for more information.

Q3 Fiscal 2016 Highlights:

• Global comparable store sales increased 4%, comprised of a 4% increase in the Americas segment, a 3% increase in the China/Asia Pacific segment, and a 1% decline in the EMEA segment

• Consolidated net revenues grew 7% to a Q3 record $5.2 billion

• Consolidated GAAP operating income increased 9% to a Q3 record $1.0 billion

Non-GAAP operating income increased 9% over Q3 FY15 non-GAAP, to a Q3 record $1.0 billion

• Consolidated GAAP operating margin increased 30 basis points to a Q3 record 19.5%

Non-GAAP operating margin expanded 30 basis points over Q3 FY15 non-GAAP, to a Q3 record 19.8%

• GAAP EPS increased 24% to a Q3 record $0.51 per share

Non-GAAP EPS increased 17% over Q3 FY15 non-GAAP, to a record $0.49 per share

• Channel Development revenues grew 9% to a Q3 record $441 million; operating income increased 31% to a Q3 record $188 million; operating margin expanded 710 basis points to a Q3 record 43%

• The company opened 474 net new stores globally in Q3, bringing total stores to 24,395 in 74 countries worldwide

• Mobile Order and Pay usage reached 5% of U.S. transactions, up from 4% in Q2 FY16

• Membership in the company's Starbucks Rewards loyalty program increased 18% year-over-year to 12.3 million active loyalty members in the U.S.

PDF: Detailed financial data

“Starbucks record Q3 performance, highlighted by strong 7% comp growth and record revenues and profits in China and 18% year-over-year growth in our Starbucks Rewards loyalty program, demonstrates the strength and resilience of the Starbucks brand and business around the world,” said Howard Schultz, Starbucks chairman and ceo. “As we enter Q4 and approach fiscal 2017, we have clear line of sight to returning our U.S. business to historic levels of comp sales growth which had been at or above 5% for the 25 consecutive quarters prior to Q3.

“Starbucks third quarter results once again reflect strong revenue and profit growth and represent the first non-holiday quarter in which our operating income exceeded $1 billion,” said Scott Maw, cfo. “We are confident in the correctness of the strategic, operational and digital moves we outlined today and remain steadfast in our commitment to deliver significant, profitable growth over the long term.”