Starbucks Corp. reported financial results for its 13-week fiscal first quarter ended January 1, 2012. Results are presented under the new reporting segments, which were effective with the beginning of fiscal 2012.
Total net revenues increased 16 percent to a record $3.4 billion.
Global comparable store sales increased 9 percent, driven by a 7 percent increase in traffic and a 2 percent increase in average ticket.
Starbucks opened 241 net new stores globally, reaching 500 stores in both mainland China and Latin America.
CPG revenue increased 72 percent, driven by the launch of Starbucks- and Tazo-branded K-Cup® packs and the impact of the first quarter 2011 transition of packaged coffee and tea to the direct distribution model.
Over 100 million Starbucks- and Tazo-branded K-Cup® packs shipped in Q1 following the Nov. t launch.
Earnings per share (EPS) increased 11 percent to a record $0.50 per share, compared to $0.45 per share in first quarter 2011.
"Starbucks continues to expand our global footprint and accelerate the innovation and momentum in our CPG business,” said Howard Schultz, Starbucks chairman, president and CEO in a prepared statement. “Our first quarter performance represents the highest quarterly earnings in the history of the company, and is a testament to the hard work and commitment of our 200,000 partners (employees) around the world. Starbucks is firing on all cylinders and taking full advantage of the many global opportunities that lie ahead," Schultz added.
"Our first quarter results demonstrate the fundamental strength of the Starbucks business and the powerful momentum we carried into fiscal 2012,” commented Troy Alstead, chief financial officer. “A very successful holiday season drove strong global same store sales, which, combined with continued operational efficiencies, delivered record results despite continued commodity cost pressures. We are well positioned to continue to drive strong revenue and profit growth throughout this year, and in years to come.”
Consolidated net revenues reached a record $3.4 billion in first quarter 2012, an increase of 16 percent over first quarter 2011. The increase was primarily due to a 9 percent increase in global comparable stores sales, and 72 percent growth in the CPG segment. The 9 percent increase in comparable store sales was comprised of a 7 percent increase in the number of transactions and a 2 percent increase in average ticket. Additionally, licensed store revenue growth of 21 percent contributed to overall consolidated net revenues.
Consolidated operating income increased to $556.0 million in first quarter 2012, compared to $501.9 million for the same period a year ago. Operating margin decreased 80 basis points to 16.2 percent in first quarter 2012 compared to 17.0 percent in the prior-year period. This margin contraction was due to higher commodity costs. The increase in commodity costs, primarily coffee, negatively impacted first quarter 2012 operating income and operating margin by approximately $105 million and 300 basis points, respectively, compared to the same period in the prior year.
Net revenues for the Americas segment were $2.6 billion in first quarter 2012, an increase of 11 percent over first quarter 2011. The increase was primarily due to a 9 percent increase in comparable store sales, driven by strong sales performance in the U.S. Additionally, licensed store revenue growth of approximately 25 percent contributed to the Americas segment results. Comparable store sales growth in the U.S. of 9 percent was comprised of an 8 percent increase in the number of transactions and a 2 percent increase in average ticket.
Operating income increased to $563.2 million in first quarter 2012, compared to $527.0 million for the same period a year ago. Operating margin decreased 80 basis points to 21.8 percent in first quarter 2012 compared to 22.6 percent in the prior-year period. The margin contraction was due to higher commodity costs.