Starbucks 2008 Annual Report Download - page 36

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RESULTS OF OPERATIONS — FISCAL 2007 COMPARED TO FISCAL 2006
Consolidated Results of Operations (in millions):
Fiscal Year Ended
Sep 30,
2007
Oct 1,
2006 % Change
Sep 30,
2007
Oct 1,
2006
% of Total Net
Revenues
STATEMENTS OF EARNINGS DATA
Net revenues:
Company-operated retail ...................... $7,998.3 $6,583.1 21.5% 85.0% 84.5%
Specialty:
Licensing ............................... 1,026.3 860.6 19.3 10.9 11.1
Foodservice and other ...................... 386.9 343.2 12.7 4.1 4.4
Total specialty ............................. 1,413.2 1,203.8 17.4 15.0 15.5
Total net revenues ............................ $9,411.5 $7,786.9 20.9% 100.0% 100.0%
Net revenues for the fiscal year ended 2007 increased from fiscal 2006, driven by increases in both Company-
operated retail revenues and specialty operations.
During the fiscal year ended 2007, Starbucks derived 85% of total net revenues from its Company-operated retail
stores. Company-operated retail revenues increased primarily due to the opening of 1,342 new Company-operated
retail stores in the last 12 months and comparable store sales growth of 5% for the fiscal year ended 2007. The
increase in comparable store sales was due to a 4% increase in the average value per transaction and a 1% increase in
the number of customer transactions.
The Company derived the remaining 15% of total net revenues from channels outside the Company-operated retail
stores, collectively known as specialty operations. Licensing revenues, which are derived from retail store licensing
arrangements as well as grocery, warehouse club and certain other branded-product operations, increased primarily
due to higher product sales and royalty revenues from the opening of 1,229 new licensed retail stores in the last
12 months and a 20% increase in licensing revenues from the Company’s CPG business. Foodservice and other
revenues increased due to growth in new and existing accounts in the US foodservice business.
Fiscal Year Ended
Sep 30,
2007
Oct 1,
2006 % Change
Sep 30,
2007
Oct 1,
2006
% of Total Net
Revenues
Cost of sales including occupancy costs ............. $3,999.1 $3,178.8 25.8% 42.5% 40.8%
Store operating expenses
(1)
...................... 3,215.9 2,687.8 19.6 34.2 34.5
Other operating expenses
(2)
...................... 294.2 253.7 16.0 3.1 3.3
Depreciation and amortization expenses ............. 467.2 387.2 20.7 5.0 5.0
General and administrative expenses ............... 489.2 479.4 2.0 5.2 6.2
Total operating expenses ........................ 8,465.6 6,986.9 21.2 89.9 89.7
Income from equity investees .................... 108.0 94.0 14.9 1.1 1.2
Operating income ............................ $1,053.9 $ 894.0 17.9% 11.2% 11.5%
(1)
As a percentage of related Company-operated retail revenues, store operating expenses were 40.2% and 40.8%
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 20.8% and 21.1% for the
fiscal years ended September 30, 2007 and October 1, 2006, respectively.
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