Starbucks 2007 Annual Report Download - page 33

(2) As a percentage of related total specialty revenues, other operating expenses were 23.7% and 18.9% for the
fiscal years ended October 1, 2006 and October 2, 2005, respectively.
International total net revenues increased 27% to $1.3 billion for the fiscal year ended 2006, compared to $1.0 billion
for fiscal 2005. International Company-operated retail revenues increased 28% to $1.1 billion for the fiscal year
ended 2006, compared to $852 million for fiscal 2005. International Company-operated revenues increased due to
the opening of 233 new Company-operated retail stores in the last 12 months, comparable store sales growth of 8%
for fiscal 2006, and the weakening of the U.S. dollar against the Canadian dollar. The increase in comparable store
sales resulted from a 5% increase in the number of customer transactions and a 3% increase in the average value per
transaction.
Total International specialty revenues increased 26% to $215 million for the fiscal year ended 2006, compared to
$170 million for fiscal 2005. International licensing revenues increased 28% to $186 million for the fiscal year
ended 2006, compared to $146 million in fiscal 2005. International licensing revenues increased due to higher
product sales and royalty revenues from opening 423 new licensed retail stores in the last 12 months. International
foodservice and other revenues increased 19% to $29 million for the fiscal year ended 2006, compared to
$24 million in fiscal 2005. International foodservice and other revenues increased primarily due to growth in the
total number of foodservice accounts.
International operating income increased to $108 million for the fiscal year ended 2006, compared to $82 million in
fiscal 2005. Operating margin increased to 8.3% of related revenues from 8.0% in fiscal 2005, primarily due to
lower cost of sales including occupancy costs due to leverage gained from fixed costs distributed over an expanded
revenue base, as well as lower dairy costs. These improvements were partially offset by higher store operating
expenses and other operating expenses due to higher payroll-related expenditures primarily to support global
expansion as well as the recognition of stock-based compensation expense.
Global Consumer Products Group
Oct 1,
2006
Oct 2,
2005
%
Change
Oct 1,
2006
Oct 2,
2005
52 Weeks Ended 52 Weeks Ended
As a % of CPG
total net revenues
Net revenues:
Specialty:
Licensing......................... $305,471 $249,292 22.5% 100.0% 100.0%
Total specialty ................... 305,471 249,292 22.5 100.0 100.0
Cost of sales .......................... 179,298 149,095 20.3 58.7 59.8
Other operating expenses ................. 12,200 9,752 25.1 4.0 3.9
Depreciation and amortization expenses ...... 108 76 42.1 — —
General and administrative expenses ........ 6,363 4,499 41.4 2.1 1.8
Total operating expenses . ............ 197,969 163,422 21.1 64.8 65.5
Income from equity investees . ............ 59,416 45,579 30.4 19.4 18.2
Operating income.................. $166,918 $131,449 27.0% 54.6% 52.7%
CPG total net revenues increased 23% to $305 million for the fiscal year ended 2006, compared to $249 million for
fiscal 2005, primarily due to volume growth in the licensed grocery and warehouse club business as well as sales of
ready-to-drink coffee beverages introduced in Japan and Taiwan in the fall of 2005 and Korea in December of 2005.
CPG operating income increased to $167 million for the fiscal year ended 2006, compared to $131 million for fiscal
2005. Operating margin increased to 54.6% of related revenues, from 52.7% in fiscal 2005, primarily due to higher
income from the Company’s equity investees and lower cost of sales as a percentage of revenues. The increase in
equity investee income was primarily due to volume-driven results for The North American Coffee Partnership,
which produces ready-to-drink beverages which include, among others, bottled Frappuccino»beverages and
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