November 1, 2018 Coffee & Company

Starbucks Reports Q4 and Full Year Fiscal 2018 Results

Q4 Consolidated Net Revenues Up 11% to Record $6.3 Billion; Q4 Comparable Store Sales Up 3% Globally Driven by 4% Growth in the U.S.

China Comparable Store Sales Up 1% in Q4, Improved from -2% Reported in Q3; GAAP EPS of $0.56; Non-GAAP EPS of $0.62, Up 13% Year-Over-Year

Active Starbucks RewardsTM Membership in the U.S. Increases 15% Year-Over-Year to 15.3 Million

Returned $8.9 Billion to Shareholders in Fiscal Year 2018, Consistent with Our 3-Year Target to Return $25 Billion

SEATTLE; November 1, 2018 – Starbucks Corporation (NASDAQ: SBUX) today reported financial results for its 13-week fiscal fourth quarter and 52-week year ended September 30, 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.

Q4 Fiscal 2018 Highlights

• Global comparable store sales increased 3%, driven by a 4% increase in average ticket

◦ Americas and U.S. comparable store sales increased 4%

◦ CAP and China comparable store sales increased 1%

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

◦ Adjusted for an approximately 2% net benefit from streamline-driven activities, and approximately 1% headwind from unfavorable foreign currency translation, consolidated net revenues grew 9% over the prior year

◦ Streamline-driven activities include the consolidation of the acquired East China business, partially offset by licensing our CPG and foodservice businesses to Nestlé following the close of the deal on August 26, 2018, Teavana mall store closures, and the conversion of certain international retail operations from company-owned to licensed models

• GAAP operating margin, inclusive of restructuring and impairment charges, declined 270 basis points year-over-year to 15.2%

◦ Non-GAAP operating margin of 18.1% declined 190 basis points compared to the prior year

• GAAP Earnings Per Share of $0.56, up 4% over the prior year

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

• Starbucks RewardsTM loyalty program grew to 15.3 million active members in the U.S., up 15% year-over-year

• Mobile Order and Pay represented 14% of U.S. company-operated transactions

• The company opened 604 net new stores in Q4 and now operates 29,324 stores across 78 markets

• The company returned $3.6 billion to shareholders through a combination of dividends and share repurchases

Fiscal Year 2018 Highlights

• Global comparable store sales increased 2%, driven by a 3% increase in average ticket

◦ Americas and U.S. comparable store sales increased 2%

◦ CAP comparable store sales increased 1%

▪ China comparable store sales increased 2%

• Consolidated net revenues of $24.7 billion, up 10% over the prior year

◦ Adjusted for an approximately 2% net benefit from streamline-driven activities, and approximately 1% benefit from favorable foreign currency translation, consolidated net revenues grew 8% over the prior year

◦ Streamline-driven activities include the consolidation of the acquired East China business, partially offset by Teavana mall store closures, the conversion of certain international retail operations from company-owned to licensed models, licensing our CPG and foodservice businesses to Nestlé following the close of the deal on August 26, 2018, and the sale of our Tazo brand in Q1 FY18

• GAAP operating margin, inclusive of restructuring and impairment charges, declined 280 basis points year-over-year to 15.7%

◦ Non-GAAP operating margin of 18.0% declined 170 basis points compared to the prior year

• GAAP Earnings Per Share of $3.24, up 64% over the prior year

◦ Non-GAAP EPS of $2.42, up 17% over the prior year

• The company returned $8.9 billion to shareholders through a combination of dividends and share repurchases

PDF: Detailed financial data

“Starbucks record Q4 performance reflected meaningful improvement in virtually every critical operating metric compared to Q3," said Kevin Johnson, ceo. “As we enter fiscal 2019, we are executing against a clear growth agenda, with a focus on our long-term growth markets of the U.S. and China. We are also excited about the long-term growth potential of our new Global Coffee Alliance with Nestlé. I’m incredibly proud of our 350,000 Starbucks partners around the world and pleased with the continued progress in our growth agenda.”

“In Q4, Starbucks delivered improved sequential results in both our Americas and China/Asia Pacific segments. We also further set the stage for increased benefits from our ongoing efforts to streamline the company,” said Scott Maw, cfo. “Each of these factors contributed to the record Q4 results we reported today and position us well for fiscal 2019 and beyond. As always, credit for Starbucks performance belongs to our store partners all around the world who proudly wear the green apron and deliver an elevated Starbucks Experience to our customers, every day.”

Visit the Investor Relations page on Starbucks.com to access the live audio webcast.


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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