July 26, 2018 Coffee & Company

Starbucks Reports Record Q3 Fiscal 2018 Revenues and EPS

Consolidated Net Revenues Up 11% to a Record $6.3 Billion; Comparable Store Sales Up 1% Globally and in the U.S.

GAAP EPS of $0.61; Non-GAAP EPS of $0.62, Up 13% Year-Over-Year

Active Starbucks Rewards™ Membership in the U.S. Increases 14% Year-Over-Year to 15.1 Million

Cash Returned to Shareholders Exceeds $5 Billion Fiscal Year-To-Date

SEATTLE; July 26, 2018 – Starbucks Corporation (NASDAQ: SBUX) today reported financial results for its 13-week fiscal third quarter ended July 1, 2018. GAAP results in fiscal 2018 and fiscal 2017 include items which are excluded from non-GAAP results. Please refer to the reconciliation of GAAP measures to non-GAAP measures at the end of this release for more information.

Q3 Fiscal 2018 Highlights

• Global comparable store sales increased 1%, driven by a 3% increase in average ticket

◦ Americas and U.S. comparable store sales increased 1%

◦ CAP comparable store sales decreased 1%

▪ China comparable store sales decreased 2%

• Consolidated net revenues of $6.3 billion, up 11% over the prior year including:

◦ 3% net benefit from consolidation of the acquired East China business and other streamline-driven activities, including Teavana mall store closures, the Tazo divestiture, and the conversion of certain international retail operations from company-owned to licensed models

◦ 1% benefit from foreign currency translation

• GAAP operating margin, inclusive of restructuring and impairment charges, declined 190 basis points year-over-year to 16.5%

◦ Non-GAAP operating margin of 18.5% declined 230 basis points compared to the prior year

• GAAP Earnings Per Share of $0.61, up 30% over the prior year

◦ Non-GAAP EPS of $0.62, up 13% over the prior year

◦ GAAP and non-GAAP EPS include $0.02 of unfavorability associated with May 29th anti-bias training

• Starbucks Rewards™ loyalty program added 1.9 million active members in the U.S., up 14% year-over-year; total member spend now represents 40% of U.S. company-operated sales

• Mobile Order and Pay represented 13% of U.S. company-operated transactions

• The company opened 511 net new stores in Q3 and now operates 28,720 stores across 77 markets

• The company returned $1.3 billion to shareholders through a combination of dividends and share repurchases

PDF: Detailed Financial Data

“Starbucks record performance in Q3 reflects successful execution against our strategic growth priorities and our commitment to deliver predictable, sustainable growth at scale - and meaningful increases in long-term value - for our shareholders,” said Kevin Johnson, Starbucks ceo and president. “We remain confident in our global growth strategies, in the sustainability of our leadership position around all things coffee and tea and in our leadership teams around the world to navigate our next phase of growth.”

“Starbucks record Q3 revenues and profits once again reflect the underlying strength of the Starbucks business and brand all around the world,” said Scott Maw, cfo. “We continue to grow share in virtually every market and channel in which we operate at the same time that our streamline initiatives are enabling us to sharpen our focus - and leverage our resources - against our highest value, long-term growth opportunities.”


About Starbucks

Since 1971, Starbucks Coffee Company has been committed to ethically sourcing and roasting high-quality arabica coffee. Today, with more than 25,000 stores around the globe, Starbucks is the premier roaster and retailer of specialty coffee in the world. Through our unwavering commitment to excellence and our guiding principles, we bring the unique Starbucks Experience to life for every customer through every cup. To share in the experience, please visit our stores or online at news.starbucks.com and Starbucks.com.

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