Starbucks Reports Record Q3 Financial And Operating Results, Revenues Up 7% To Q3 Record $5.2 Billion

July 22, 2016

SEATTLE--(BUSINESS WIRE)--Jul. 21, 2016-- Starbucks Corporation 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 Pacificsegment, 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

o    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%

o    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

o    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.

“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 Starbucks chairman and ceo Howard Schultz. “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.”

Third Quarter Fiscal 2016 Summary

Consolidated net revenues were $5.2 billion in Q3 FY16, an increase of 7% over Q3 FY15. The increase was primarily driven by the opening of 1,876 net new stores over the past 12 months and a 4% increase in global comparable store sales.

Consolidated operating income grew 9% to $1,022.3 million in Q3 FY16, up from $938.6 million in Q3 FY15. Consolidated operating margin expanded 30 basis points to 19.5%. The increase was primarily due to sales leverage and lower commodity costs, primarily coffee, and was partially offset by investments in our partners (employees) and digital platforms.

Q3 Americas Segment Results

Net revenues for the Americas segment were $3.6 billion in Q3 FY16, an increase of 7% over Q3 FY15. The increase was driven by a 4% increase in comparable store sales and incremental revenues from 730 net new store openings over the past 12 months.

Operating income of $898.5 million in Q3 FY16 grew 5% versus $855.3 million in Q3 FY15. Operating margin of 24.6% declined 40 basis points primarily due to investments in our partners (employees), partially offset by sales leverage and lower commodity costs. Full report.

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