Starbucks 2008 Annual Report Download - page 39

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decline in other operating expenses as a percentage of total net revenues was primarily due to controlled
discretionary spending in the current year.
International
Fiscal Year Ended
Sep 30,
2007
Oct 1,
2006
%
Change
Sep 30,
2007
Oct 1,
2006
As a % of
International
Total Net
Revenues
Net revenues:
Company-operated retail ........................ $1,437.4 $1,087.9 32.1% 84.7% 83.5%
Specialty:
Licensing ................................. 220.9 186.0 18.8 13.0 14.3
Foodservice and other ........................ 37.9 29.0 30.7 2.2 2.2
Total specialty ............................ 258.8 215.0 20.4 15.3 16.5
Total net revenues.............................. $1,696.2 $1,302.9 30.2% 100.0% 100.0%
Company-operated retail revenues increased 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 specialty revenues increased primarily due to higher product sales and royalty revenues from opening 506 new
licensed retail stores in the last 12 months.
Fiscal Year Ended
Sep 30,
2007
Oct 1,
2006
%
Change
Sep 30,
2007
Oct 1,
2006
As a % of
International
Total Net
Revenues
Cost of sales including occupancy costs ............... $ 824.6 $ 625.0 31.9% 48.6% 48.0%
Store operating expenses
(1)
........................ 531.7 407.8 30.4 31.3 31.3
Other operating expenses
(2)
........................ 69.9 50.9 37.3 4.1 3.9
Depreciation and amortization expenses ............... 84.2 66.8 26.0 5.0 5.1
General and administrative expenses ................. 93.8 78.3 19.8 5.5 6.0
Total operating expenses .................... 1,604.2 1,228.8 30.5 94.6 94.3
Income from equity investees ...................... 45.7 34.4 32.9 2.7 2.6
Operating income ......................... $ 137.7 $ 108.5 26.9% 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.
Operating margin decreased primarily due to higher cost of sales including occupancy costs due in part to a shift in
sales mix to higher cost products such as food and merchandise and higher distribution costs. Partially offsetting this
increase was lower general and administrative expenses as a percentage of total net revenues.
33