Starbucks Reports Q3 Fiscal 2019 Results
Q3 Comparable Store Sales Up 6% Globally, Led by 7% Comp Growth in the U.S. and 6% Comp Growth in China
Global Net Store Growth of 7% Versus Prior Year, Led by 16% Net Store Growth in China
GAAP EPS of $1.12; Non-GAAP EPS of $0.78, Up 26% Year-Over-Year
Active Starbucks® Rewards Membership in the U.S. Increases 14% Year-Over-Year to 17.2 Million
SEATTLE – Starbucks Corporation (NASDAQ: SBUX) today reported financial results for its 13-week fiscal third quarter ended June 30, 2019. GAAP results in fiscal 2019 and fiscal 2018 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.
“Starbucks delivered strong operating performance in the third quarter, further demonstrating that our ‘Growth at Scale’ agenda is working,” says Kevin Johnson, president and ceo. “Our two targeted long-term growth markets, the U.S. and China, performed extremely well across a number of measures as a result of our focus on enhancing the customer experience, driving new beverage innovation and accelerating the expansion of our digital customer relationships. Given the strong momentum across our business, we are raising our full-year financial outlook.”
“Starbucks continues to be focused and disciplined in the execution of our three key strategic priorities that we established last year: accelerating growth in the U.S. and China, expanding the global reach of the Starbucks brand through our Global Coffee Alliance with Nestlé, and increasing shareholder returns. With our efforts to streamline the company and elevate the Starbucks brand, we are positioning the company to deliver predictable and sustainable operating results while building an enduring company that creates meaningful long-term value for Starbucks shareholders,” concluded Johnson.
Q3 Fiscal 2019 Highlights
- Global comparable store sales increased 6%, driven by a 3%
increase in average ticket and a 3% increase in comparable transactions- Americas comparable store sales increased 7%, driven by a 4%
increase in average ticket and a 3% increase in transactions; U.S. comparable
store sales increased 7%, with transactions up 3%
- China/Asia Pacific comparable store sales increased 5%,
driven by a 3% increase in average ticket and a 2% increase in transactions;
China comparable store sales increased 6%, with transactions up 2%
- Americas comparable store sales increased 7%, driven by a 4%
- The company opened 442 net new stores in Q3, yielding 30,626
stores at the end of the quarter, a 7% increase over the prior year. Nearly
one-third of net new store openings were in China and 48% were in other
international markets - Consolidated net revenues of $6.8 billion grew 8% over the
prior year- Consolidated net revenues grew 11% over the prior year
adjusted for unfavorable impacts of approximately 2% from Streamline-driven
activities and 1% from foreign currency translation
- Streamline-driven activities include the licensing of our CPG
and foodservice businesses to Nestlé following the close of the transaction on
August 26, 2018, and the conversion of certain international retail operations
from company-operated to licensed models
- Consolidated net revenues grew 11% over the prior year
- GAAP operating margin, inclusive of restructuring and
impairment charges, declined 10 basis points year-over-year to 16.4%, primarily
due to partner (employee) investments, largely in the Americas segment,
licensing of our CPG and foodservice businesses to Nestlé, product mix and
higher inventory reserves, partially offset by sales leverage, cost savings
initiatives and the adoption of new revenue recognition accounting for stored
value card (SVC) breakage- Non-GAAP operating margin of 18.3% declined 20 basis points
compared to the prior year. Excluding a 70-basis point unfavorable impact from Streamline-related
activities, non-GAAP operating margin expanded by approximately 50 basis points
- Non-GAAP operating margin of 18.3% declined 20 basis points
- GAAP Earnings Per Share of $1.12, up 84% over the prior year
- Non-GAAP EPS of $0.78, up 26% over the prior year, inclusive
of a $0.03 benefit from discrete income tax items
- Non-GAAP EPS of $0.78, up 26% over the prior year, inclusive
- The company returned $581 million to shareholders through a
combination of share repurchases and dividends - Starbucks® Rewardsloyalty program grew
to 17.2 million active members in the U.S., up 14% year-over-year
Visit the Investor Relations page on Starbucks.com to access the live audio webcast.
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“As we execute on our Reinvention plan, we are building on our 51-year history of market leading innovation to position our business and our brand for the next chapter of growth,” said Schultz.