Starbucks 2007 Annual Report Download - page 28

International
Sept 30,
2007
Oct 1,
2006
%
Change
Sept 30,
2007
Oct 1,
2006
52 Weeks Ended 52 Weeks Ended
As a % of
international total
net revenues
Net revenues:
Company-operated retail .................... $1,437,401 $1,087,858 32.1% 84.7% 83.5%
Specialty:
Licensing ............................. 220,832 186,050 18.7 13.0 14.3
Foodservice and other .................... 37,926 29,006 30.8 2.3 2.2
Total specialty ........................ 258,758 215,056 20.3 15.3 16.5
Total net revenues ......................... 1,696,159 1,302,914 30.2 100.0 100.0
Cost of sales including occupancy costs .......... 824,594 625,008 31.9 48.6 48.0
Store operating expenses(1) ................... 531,693 407,771 30.4 31.4 31.3
Other operating expenses(2) ................... 69,881 50,900 37.3 4.1 3.9
Depreciation and amortization expenses .......... 84,165 66,800 26.0 5.0 5.1
General and administrative expenses ............. 93,806 78,337 19.7 5.5 6.0
Total operating expenses .................. 1,604,139 1,228,816 30.5 94.6 94.3
Income from equity investees .................. 45,723 34,370 33.0 2.7 2.6
Operating income ...................... $ 137,743 $ 108,468 27.0% 8.1% 8.3%
(1) As a percentage of related Company-operated retail revenues, store operating expenses were 37.0% and 37.5%
for the fiscal years ended September 30, 2007 and October 1, 2006, respectively.
(2) As a percentage of related total specialty revenues, other operating expenses were 27.0% and 23.7% for the
fiscal years ended September 30, 2007 and October 1, 2006, respectively.
The International operating segment (“International”) sells coffee and other beverages, complementary food, whole
bean coffees, and coffee brewing equipment and merchandise through Company-operated retail stores in Canada,
the UK and eight other markets. Specialty operations in International primarily include retail store licensing
operations in more than 30 other countries and foodservice accounts, primarily in Canada and the UK. The
Company’s International store base continues to increase rapidly and Starbucks is achieving a growing contribution
from established areas of the business while at the same time investing in emerging markets and channels. Many of
the Company’s International operations are in early stages of development that require a more extensive support
organization, relative to the current levels of revenue and operating income, than in the United States. This
continuing investment is part of the Company’s long-term, balanced plan for profitable growth.
International total net revenues increased 30% to $1.7 billion for the fiscal year ended 2007, compared to $1.3 billion
for fiscal 2006.
International Company-operated retail revenues increased 32% to $1.4 billion for the fiscal year ended 2007,
compared to $1.1 billion for fiscal 2006. The increase was primarily due to the opening of 277 new Company-
operated retail stores in the last 12 months, comparable store sales growth of 7% for fiscal 2007 and favorable
foreign currency exchange for the British pound sterling. The increase in comparable store sales resulted from a 5%
increase in the number of customer transactions coupled with a 2% increase in the average value per transaction.
Total International specialty revenues increased 20% to $259 million for the fiscal year ended 2007, compared to
$215 million in fiscal 2006. The increase was primarily due to higher product sales and royalty revenues from
opening 506 new licensed retail stores in the last 12 months.
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