Starbucks 2011 Annual Report Download - page 30

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international markets require a more extensive support organization, relative to the current levels of revenue and
operating income.
The CPG and Seattle’s Best Coffee segments include packaged coffee and tea and other branded products operations
worldwide, as well as the US foodservice business. In prior years through the first several months of fiscal 2011, we
sold a selection of Starbucks and Seattle’s Best Coffee branded packaged coffees and Tazo®teas in grocery and
warehouse club stores throughout the US and to grocery stores in Canada, the UK and other European countries
through a distribution arrangement with Kraft Foods Global, Inc. Kraft managed the distribution, marketing,
advertising and promotion of these products as a part of that arrangement. Beginning in the second quarter of fiscal
2011, we successfully transitioned these businesses including the marketing, advertising, and promotion of these
products, from our previous distribution arrangement with Kraft and began selling these products directly to the
grocery and warehouse club stores. Our CPG segment also includes ready-to-drink beverages, which are primarily
manufactured and distributed through The North American Coffee Partnership, a joint venture with the Pepsi-Cola
Company. The proportionate share of the results of the joint venture is included, on a net basis, in income from
equity investees on the consolidated statements of earnings. The US foodservice business sells coffee and other
related products to institutional foodservice companies with the majority of its sales through national broad-line
distribution networks. The CPG segment reflects relatively lower revenues, a modest cost structure, and a resulting
higher operating margin, compared to the other two reporting segments, which consist primarily of retail stores.
Acquisitions
See Note 17 to the consolidated financial statements in this 10-K.
RESULTS OF OPERATIONS — FISCAL 2011 COMPARED TO FISCAL 2010
Consolidated results of operations (in millions):
Revenues
Fiscal Year Ended
Oct 2,
2011
Oct 3,
2010
%
Change
Oct 2,
2011
Oct 3,
2010
%ofTotalNet
Revenues
Net revenues:
Company-operatedstores ......................... $ 9,632.4 $ 8,963.5 7.5% 82.3% 83.7%
Licensedstores ................................. 1,007.5 875.2 15.1% 8.6% 8.2%
CPG,foodserviceandother ....................... 1,060.5 868.7 22.1% 9.1% 8.1%
Total net revenues ................................ $11,700.4 $10,707.4 9.3% 100.0% 100.0%
Consolidated net revenues were $11.7 billion for fiscal 2011, an increase of 9%, or $993 million over fiscal 2010.
The increase was primarily due to an increase in company-operated retail revenues driven by an 8% increase in
global comparable stores sales (contributing approximately $672 million). The increase in comparable store sales
was due to a 6% increase in number of transactions (contributing approximately $499 million) and a 2% increase in
average value per transaction (contributing approximately $173 million). Also contributing to the increase in total
net revenues was favorable foreign currency translation (approximately $126 million) resulting from a weakening of
the US dollar relative to foreign currencies and an increase in licensed stores revenues (approximately $106 million).
This increase was partially offset by the impact of the extra week in fiscal 2010 (approximately $207 million).
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