Starbucks 2008 Annual Report Download - page 34

Fiscal Year Ended
Sep 28,
2008
Sep 30,
2007 % Change
Sep 28,
2008
Sep 30,
2007
As a % of
International
Total Net Revenues
Net revenues:
Company-operated retail ....................... $1,774.2 $1,437.4 23.4% 84.3% 84.7%
Specialty:
Licensing ................................. 274.8 220.9 24.4 13.1 13.0
Foodservice and other ....................... 54.4 37.9 43.5 2.6 2.2
Total specialty ........................... 329.2 258.8 27.2 15.7 15.3
Total net revenues ........................... $2,103.4 $1,696.2 24.0% 100.0% 100.0%
Company-operated retail revenues increased due to the opening of 236 new Company-operated retail stores in the
last 12 months, favorable foreign currency exchange rates, primarily on the Canadian dollar, and comparable store
sales growth of 2% for fiscal 2008. In the fourth quarter of fiscal 2008, Company-operated retail revenues grew at a
slower rate year-over-year of 12% and comparable store sales were flat compared to the same quarter in fiscal 2007,
both driven by slowdowns in the UK and Canada, due to the weakening global economy.
Specialty revenues increased primarily due to higher product sales and royalty revenues from opening 550 new
licensed retail stores in the last 12 months.
Fiscal Year Ended
Sep 28,
2008
Sep 30,
2007 % Change
Sep 28,
2008
Sep 30,
2007
As a % of
International
Total Net Revenues
Cost of sales including occupancy costs ............ $1,054.0 $ 824.6 27.8% 50.1% 48.6%
Store operating expenses
(1)
...................... 664.1 531.7 24.9 31.6 31.3
Other operating expenses
(2)
..................... 88.5 69.9 26.6 4.2 4.1
Depreciation and amortization expenses ............ 108.8 84.2 29.2 5.2 5.0
General and administrative expenses............... 113.0 93.8 20.5 5.4 5.5
Restructuring charges.......................... 19.2 — nm 0.9 —
Total operating expenses ..................... 2,047.6 1,604.2 27.6 97.3 94.6
Income from equity investees .................... 54.2 45.7 18.6 2.6 2.7
Operating income .......................... $ 110.0 $ 137.7 (20.1)% 5.2% 8.1%
(1)
As a percentage of related Company-operated retail revenues, store operating expenses were 37.4% and 37.0%
for the fiscal years ended September 28, 2008 and September 30, 2007, respectively.
(2)
As a percentage of related total specialty revenues, other operating expenses were 26.9% and 27.0% for the
fiscal years ended September 28, 2008 and September 30, 2007, respectively.
Operating margin decreased primarily due to higher cost of sales including occupancy costs driven by continued
expansion of lunch and warming programs in Canada, higher distribution costs, and higher building maintenance
expense due to store renovation activities. In addition, restructuring charges of $19.2 million recognized in fiscal
2008 had a 90 basis point impact on the operating margin, nearly all due to the closure of 61 Company-operated
stores in Australia.
Global Consumer Products Group
The CPG operating segment sells a selection of whole bean and ground coffees and premium Tazo»teas through
licensing arrangements in United States and international markets. CPG also produces and sells a variety of ready-
to-drink beverages through its joint ventures and marketing and distribution agreements.
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