Starbucks: Reports Q3 Fiscal 2023 Results

Seattle / WA. (sc) Starbucks Corporation reported financial results for its 13-week fiscal third quarter ended July 02, 2023. GAAP results in fiscal 2023 and fiscal 2022 include items that are excluded from non-GAAP results. Q3 Fiscal 2023 highlights:

• Global comparable store sales increased 10 percent, primarily driven by a 5 percent increase in comparable transactions and a 4 percent increase in average ticket
  • North America and U.S. comparable store sales increased 7 percent, driven by a 6 percent increase in average ticket and a 1 percent increase in comparable transactions
  • International comparable store sales increased 24 percent, driven by a 21 percent increase in comparable transactions and a 2 percent increase in average ticket; China comparable store sales increased 46 percent, driven by a 48 percent increase in comparable transactions and a 1 percent decline in average ticket
• The company opened 588 net new stores in Q3, crossing the 37,000 store count threshold globally, ending the period with 37,222 stores: 51 percent company-operated and 49 percent licensed
  • At the end of Q3, stores in the U.S. and China comprised 61 percent of the company’s global portfolio, with 16,144 and 6,480 stores in the U.S. and China, respectively
• Consolidated net revenues of USD 9.2 billion, up 12 percent from the prior year, or 14 percent, inclusive of more than 1 percent unfavorable impact from foreign currency translation
• GAAP operating margin of 17.3 percent increased from 15.9 percent in the prior year, primarily driven by sales leverage, pricing and productivity improvement. This expansion was partially offset by previously committed investments in labor, including enhanced store partner wages and benefits and higher general and administrative costs related to our Reinvention Plan.
  • Non-GAAP operating margin of 17.4 percent increased from 16.9 percent in the prior year
• GAAP earnings per share of USD 0.99 grew 25 percent over prior year
  • Non-GAAP earnings per share of USD 1.00 grew 19 percent over prior year
• Starbucks Rewards loyalty program 90-day active members in the U.S. increased to 31.4 million, up 15 percent year-over-year

«Our strong third quarter results point to all-around momentum in the business, and reflect the significant progress we are making against our Reinvention Plan. Our results were also amplified by the distinctive competitive advantages that set us apart in the market,» said Laxman Narasimhan, chief executive officer. «Starbucks is an iconic, durable brand and I am confident in the multiple paths available for the company to drive significant growth and margin improvement, which position us well to create outsized long-term shareholder value.»

«I am pleased with our third quarter performance, which beat our expectations, including our International segment. Our performance was bolstered by the progress we are making against our strategies, specifically our Reinvention Plan, and its unfolding into tangible financial results, as we delivered earnings growth of 19 percent well above our revenue growth of 12 percent,» added Rachel Ruggeri, chief financial officer. «The momentum we have built and strength we are seeing globally, gives us the confidence and optimism to close our fiscal year strong.»