Starbucks Increases Outlook on Improving Sales Trends
Consolidated company revenues for Q409 were $2.4 billion, compared to $2.5 billion in Q408. The revenue decline resulted primarily from the impact of foreign currency translation related to the strengthening of the U.S. dollar compared to UK and Canadian currencies.
9 Nov 2009 --- Starbucks Corporation has reported financial results for its fourth quarter and fiscal year ended September 27, 2009 and increased its FY10 earnings outlook based on improving same store sales trends and the increasing impact of its cost savings efforts.
“Starbucks strong performance in Q4 and fiscal 2009 overall is the result of our successful efforts to improve our customer and partner experiences, the initiatives and innovations we have introduced over the past 18 months and the significant, permanent changes we have made to our cost structure,” said Howard Schultz, chairman, president and ceo. “We are seeing broad-based improvement across our global business, and are cautiously optimistic about the upcoming holiday period,” added Schultz.
“Improving top line trends, coupled with a disciplined operational focus in both our stores and our support organization, position us well for long-term, profitable growth,” commented Troy Alstead, executive vice president and cfo. “As a result, we are increasing our non-GAAP EPS outlook for fiscal year 2010 to a range of 15% to 20% growth over fiscal 2009.”
Consolidated company revenues for Q409 were $2.4 billion, compared to $2.5 billion in Q408. The revenue decline resulted primarily from the impact of foreign currency translation related to the strengthening of the U.S. dollar compared to UK and Canadian currencies, 385 net fewer company-operated stores open in Q409 compared to Q408, and a 1% decline in consolidated comparable store sales.
Non-GAAP Q409 operating income totaled $252.6 million, representing non-GAAP operating margin expansion of 570 basis points to 10.4%. This improvement was driven by cost savings initiatives implemented throughout the organization, culminating in Q409 savings of approximately $210 million. The majority of these savings are the result of in-store operating improvements focused on labor efficiencies and reduced product waste, and lower non-store support costs. These improvements were partially offset by higher general and administrative expenses, related to higher performance-based compensation expenses in the quarter. Results for both years exclude restructuring charges as well as other transformation charges in fiscal 2008.
Restructuring charges of $53.2 million for the quarter were nearly all due to lease exit and other costs associated with the closure of U.S. and International company-operated stores. Starbucks actions to rationalize its global store portfolio included plans to close approximately 800 company-operated stores in the U.S., restructure the company’s business in Australia, and close approximately 100 additional International company-operated stores. At the end of fiscal 2009, nearly all of the approximately 800 U.S. stores, 61 stores in Australia and 40 stores in other International markets had been closed. The remaining International store closures are expected to be completed by the end of fiscal 2010, with related lease exit costs expected to be recognized concurrently with the actual closures.
