Starbucks Corp. reported financial results for its 13-week fiscal second quarter ended April 1, 2012.
Total net revenues increased 15 percent to $3.2 billion.
Global comparable store sales increased 7 percent, driven by a 6 percent increase in traffic and a 1 percent increase in average ticket.
Earnings per share (EPS) increased 18 percent to $0.40 per share, compared to $0.34 per share in Q2 FY11.
Channel development revenues increased 57 percent, driven by sales of Starbucks- and Tazo-branded K-Cup® packs and the benefit of recognizing the full revenue from packaged coffee sales under the direct distribution model.
Starbucks opened 176 net new stores globally, including its 3,000th store in the China/Asia Pacific segment, its first store in Norway and the first Evolution Fresh™ store in Bellevue, Wash.
"Starbucks record Q2 performance demonstrates the strength of our business, the increasing power and global relevance of our brand and the success of our unique Blueprint for Profitable Growth business strategy," said Howard Schultz, chairman, president and CEO in a prepared statement. "In Q2 we expanded our retail presence, recorded our seventh consecutive quarter of over 20 percent sales growth in China, introduced new products into multiple channels and more than offset high legacy commodity costs through increased efficiencies. I could not be more excited or more optimistic about the future of our company as we pursue disciplined, profitable growth all around the world," Schultz added.
“Starbucks delivered strong growth in the fiscal second quarter, again demonstrating the value of our evolving diversified business model. Revenue growth was driven by continued strong global same store sales and an increasing contribution from our Channel Development segment,” commented Troy Alstead, chief financial officer. “On the strength of our business and recent trends, we are accelerating new store growth in fiscal 2012 to approximately 1,000 net new stores globally, and raising our earnings targets for the year. With coffee cost pressures easing in the second half of the year and momentum building from investments in our growth initiatives, we are well positioned to deliver on our aggressive targets.”
Consolidated net revenues reached a second-quarter record $3.2 billion in Q2 FY12, an increase of 15 percent over Q2 FY11. The increase was primarily due to a 7 percent increase in global comparable stores sales and 57 percent revenue growth in channel development. The 7 percent increase in comparable store sales was comprised of a 6 percent increase in the number of transactions and a 1 percent increase in average ticket.
Consolidated operating income increased 14 percent to $430.4 million in Q2 FY12, compared to $376.1 million for the same period a year ago. Operating margin was 13.5 percent in Q2 FY12, which was equal to the same period last year. Sales leverage offset the increase in commodity costs, primarily coffee, which negatively impacted Q2 FY12 operating income and operating margin by approximately $63.5 million and 200 basis points, respectively, compared to the same period in the prior year. A recent court ruling relating to state unclaimed property laws resulted in higher unredeemed gift card income in the interest and other income line in the quarter, compared to the same period a year ago.
Net revenues for the Americas segment were $2.4 billion in Q2 FY12, an increase of 10 percent over Q2 FY11. The increase was primarily due to an 8 percent increase in comparable store sales, including a 7 percent increase in the number of transactions and a 1 percent increase in average ticket. Additionally, licensed store revenue growth of approximately 27 percent contributed to the Americas segment results.
Operating income increased to $463.0 million in Q2 FY12, compared to $419.9 million for the same period a year ago. Operating margin increased 10 basis points to 19.5 percent in Q2 FY12. The margin expansion was due to increased sales leverage offset by the increase in commodity costs, primarily coffee.