Starbucks Q1 Revenues Increase
Published:20-January-2010
By Staff Reporter
Starbucks has reported consolidated net revenues of $2.72bn for the first quarter of 2010, an increase of 4% compared $2.61bn for the same quarter previous year.
The higher revenues were attributable to a 4% increase in comparable stores sales and the impact of foreign currency translation related to the weakening of the US dollar, most notably against the Canadian dollar.
For the quarter, EPS increased to $0.32 compared to $0.09 for the corresponding period prior year. Non-GAAP operating income totaled $370.9m, representing a non-GAAP operating margin expansion of 620 basis points to 13.6%.
This improvement was driven mainly by lower cost of sales including occupancy costs related to operational initiatives, which resulted in lower product costs and reduced store waste, and to lower commodity costs in the US.
For the quarter, international net revenues were $591m compared to $495.7m for the previous year quarter. US net revenues were $1.9bn, a slight increase over the prior year quarter. Net revenues for the CPG segment were $196.8m compared to $205.9m in the same quarter last year.
Troy Alstead, executive vice president and CFO of Starbucks, said: "Solid comparable store sales growth, combined with our continuing focus on controlling operating costs, drove significant operating margin improvement in both our U.S. and International business segments.
"Looking ahead, the financial disciplines we sharpened last year and the encouraging first quarter trends position us to grow revenues, operating margin and earnings despite a still very challenging global consumer environment. As a result, we are increasing our non-GAAP EPS outlook for fiscal year 2010 to a range of $1.05 to $1.08."
The company is now targeting mid-single digit revenue growth, driven by modestly positive comparable store sales growth, a 53rd fiscal week, and approximately 300 planned net new stores. Starbucks continues to target approximately 100 net new stores in the US and approximately 200 net new stores in international markets.
