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GLOBAL – Starbucks Q4 EPS rises 37% to a record $0.63 per share

SEATTLE, WA, US –Starbucks Corporation yesterday reported financial results for its 13-week fiscal fourth quarter and 52-week fiscal year ended September 29, 2013.

Revenue grows 13% to $3.8 billion with continued strong comp growth of 8% in the Americas and 7% globally. Margins expand in all segments; Consolidated operating margin reaches record 17.6%. Board increases quarterly cash dividend 24% on strong performance and robust outlook.

Q4 Fiscal 2013 Highlights:

  • Total net revenues increased 13% to $3.8 billion
  • Global comparable store sales grew 7% driven by a 5% increase in traffic
  • 8% comp growth in the Americas and the U.S.
  • 2% comp growth in EMEA
  • 8% comp growth in China/Asia Pacific
  • Consolidated operating income increased 29% to $669 million
  • Consolidated operating margin expanded 220 basis points to 17.6%
  • Earnings per share increased 37% to $0.63 per share, including a $0.03 non-routine gain on the sale of Starbucks equity in Chile and Argentina joint ventures
  • Opened 558 net new stores in the quarter, including the 1,000th store in both China and Japan
  • The Board of Directors declared a cash dividend of $0.26 per share, an increase of 24%

Fiscal Year 2013 Highlights:

  • Total net revenues increased 12% to $14.9 billion
  • Global comparable store sales grew 7%, driven by a 5% increase in traffic
  • 7% comp growth in the Americas, driven by 8% comp growth in the U.S.
  • Comp sales flat in EMEA, traffic increased 2%
  • 9% comp growth in China/Asia Pacific, driven by a 7% increase in traffic
  • Consolidated operating income increased 23% to $2.5 billion
  • Consolidated operating margin expanded 150 basis points to a record 16.5%
  • Earnings per share increased 26% to $2.26 per share, including non-routine gains of $0.03 in Q2 and $0.03 in Q4 on the sale of Starbucks equity in Mexico, Chile and Argentina joint ventures
  • Opened 1,701 net new stores in the year; ended fiscal 2013 with 19,767 stores globally
  • Returned $1.2 billion to shareholders through dividend payments and share repurchases

“The fourth quarter of fiscal 2013 capped off by far the best year in Starbucks 42-year-history,” said Howard Schultz, chairman, president and ceo of Starbucks Coffee Company. “Our results were driven by disciplined, ongoing efforts to elevate the value and relevance of the Starbucks brand, continued innovation and the success of our efforts to deepen our connection to customers and communities around the world.”

Howard-Schultz-Starbucks “Today Starbucks announced incredible fourth quarter results in what has been a truly outstanding year,” said Troy Alstead, cfo and group president. “Outstanding global sales growth combined with record earnings and operating margin demonstrate the fundamental health of our business model and our continued ability to successfully execute on new initiatives while maintaining financial discipline. The strong momentum of the fourth quarter gives us further confidence in our robust outlook for fiscal 2014.”

Alstead Company Updates

  • Starbucks long-term business partner Alsea, S.A.B. de C.V., acquired Starbucks 82% equity in Chile and its 18% equity in Argentina in the quarter and assumed full operational responsibilities for the 118 stores across both markets.
  • The company announced its intent to open its first store in Colombia in 2014, a joint venture between Starbucks two business partners in the Latin America region – Alsea and Grupo Nutresa.
  • On October 23, almost one year after its acquisition of Teavana, Starbucks opened the first-of-its-kind Teavana Fine Teas + Tea Bar in New York City’s Upper East Side. The Tea Bar elevates the premium tea experience by delivering an assortment of handcrafted tea beverages, premium loose leaf teas, tea-inspired food offerings and tea merchandise.
  • The company raised $750 million in proceeds in September from a public offering of 3.85% senior notes due 2023. The company plans to use the net proceeds for general corporate purposes.
  • Starbucks continued the rollout of La Boulange™ bakery products in Starbucks stores by launching in Phoenix, Chicago, Boston and New York City in Q4, bringing the total number of Starbucks stores that carry La Boulange™ products to nearly 3,300 at the end of fiscal 2013.
  • The company opened a state-of-the-art juicery that will quadruple production of cold-pressed Evolution Fresh™ juice and allows the brand to significantly increase innovation and distribution capacity.
  • The Board of Directors declared a cash dividend of $0.26 per share, payable on November 29, 2013 to shareholders of record as of November 14, 2013. The company also increased its targeted payout ratio to 35% to 45%, demonstrating an ongoing commitment to increasing returns to its shareholders.
  • The company repurchased 10.8 million shares of common stock in fiscal 2013; approximately 26 million shares remain available for purchase under previous authorizations.

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