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Starbucks announces profitable Q1

January 24, 2013

Starbucks Corp. today reported during an investor relations call that the company ended Q1 with strong comparable store sales growth in the U.S. and Americas (7 percent), as well as a 6 percent increase in its global market. In fact, total net revenues increased 11 percent to a record $3.8 billion, according to the chain.

"Starbucks strong performance in Q1 demonstrates the strength and unique resilience of our increasingly global business, and the power and growing relevance of the Starbucks brand to consumers and communities all around the world," Howard Schultz, chairman, president and chief executive officer of Starbucks Coffee Company, said during the call. "Solid growth in our U.S. retail business, further expansion of our channel development initiatives and continued successful execution against our expansion plans throughoutChinaandAsia Pacificall contributed to the record results we announced today."

Other factors contributed to the chain's success, as well:

• Consolidated operating margin expanded 40 basis points to 16.6 percent.
• EPS increased 14 percent to a record 57 cents per share, compared to 50 cents per share in Q1 of last year.
• Chain opened 212 net new stores globally, including the first three stores in India.
• Starbucks sold more than 150,000 Verismo machines since launch.
• Companyadded 1.4 million new My Starbucks Rewards members in the U.S., up 86 percent over the 778,000 new members added in the U.S. in Q1 FY12.
• Chain acquired Teavana Holdings Inc. on Dec. 31, making Teavana a wholly-owned subsidiary of Starbucks and positioning Starbucks to become the global leader in tea.

"Despite significant and unexpected cost pressures in the quarter, we achieved our earnings growth target and delivered record EPS," said Starbucks chief financial officer, Troy Alstead. "Starbucks strong Q1 performance reaffirms our confidence in the aggressive FY13 growth targets we announced in early November. The quality and diversity of growth drivers in the business, combined with our continued focus on operational excellence, gives us confidence in sustainable, strong, profitable growth."

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