Starbucks 2006 Annual Report Download - page 25

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RESULTS OF OPERATIONS — FISCAL 2006 COMPARED TO FISCAL 2005
The following table presents the consolidated statement of earnings as well as the percentage relationship to total net
revenues, unless otherwise indicated, of items included in the Company’s consolidated statements of earnings (amounts in
thousands):
FISCAL YEAR ENDED
Oct 1, 2006
(52 Wks)
%of
Revenues
Oct 2, 2005
(52 Wks)
%of
Revenues
Oct 3, 2004
(53 Wks)
%of
Revenues
STATEMENTS OF EARNINGS DATA
Net revenues:
Company-operated retail $6,583,098 84.5% $5,391,927 84.7% $4,457,378 84.2%
Specialty:
Licensing 860,676 11.1 673,015 10.5 565,798 10.7
Foodservice and other 343,168 4.4 304,358 4.8 271,071 5.1
Total specialty 1,203,844 15.5 977,373 15.3 836,869 15.8
Total net revenues 7,786,942 100.0 6,369,300 100.0 5,294,247 100.0
Cost of sales including occupancy costs 3,178,791 40.8 2,605,212 40.9 2,191,440 41.4
Store operating expenses 2,687,815 40.8
(1)
2,165,911 40.2
(1)
1,790,168 40.2
(1)
Other operating expenses 260,087 21.6
(2)
197,024 20.2
(2)
171,648 20.5
(2)
Depreciation and amortization expenses 387,211 5.0 340,169 5.3 289,182 5.5
General and administrative expenses 473,023 6.1 357,114 5.6 304,293 5.7
Subtotal operating expenses 6,986,927 89.7 5,665,430 88.9 4,746,731 89.7
Income from equity investees 93,937 1.2 76,648 1.2 58,978 1.1
Operating income 893,952 11.5 780,518 12.3 606,494 11.5
Interest and other income, net 12,291 0.1 15,829 0.2 14,140 0.2
Earnings before income taxes 906,243 11.6 796,347 12.5 620,634 11.7
Income taxes 324,770 4.1 301,977 4.7 231,754 4.4
Earnings before cumulative effect of change in
accounting principle 581,473 7.5% 494,370 7.8% 388,880 7.3%
Cumulative effect of accounting change for FIN 47, net of
taxes 17,214 0.3 — — — —
Net earnings $ 564,259 7.2% $ 494,370 7.8% $ 388,880 7.3%
(1) Shown as a percentage of related Company-operated retail revenues.
(2) Shown as a percentage of related total specialty revenues.
CONSOLIDATED RESULTS OF OPERATIONS
Net revenues for the fiscal year ended 2006 increased 22% to $7.8 billion from $6.4 billion for fiscal 2005, driven by
increases in both Company-operated retail revenues and specialty operations. Net revenues are expected to grow
approximately 20% in fiscal 2007 compared to fiscal 2006.
During the fiscal year ended 2006, Starbucks derived 85% of total net revenues from its Company-operated retail stores.
Company-operated retail revenues increased 22% to $6.6 billion for the fiscal year ended 2006, from $5.4 billion for
fiscal 2005. This increase was primarily due to the opening of 1,040 new Company-operated retail stores in the last
12 months and comparable store sales growth of 7% in fiscal 2006. The increase in comparable store sales was due to a
5% increase in the number of customer transactions and a 2% increase in the average value per transaction. Management
believes increased customer traffic continues to be driven by sustained popularity of core products, new product
innovation and a high level of customer satisfaction.
STARBUCKS CORPORATION, FORM 10-K 21