Starbucks 2012 Annual Report Download - page 37

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31
Other operating expenses as a percentage of total net revenues was flat over prior year. As a percentage of net
revenues excluding company-operated store revenues, other operating expenses decreased 100 basis points,
primarily driven by increased sales leverage.
The combination of these changes, along with increased sales leverage on depreciation and amortization expense
(approximately 40 basis points), resulted in an increase in operating margin of 60 basis points over fiscal 2011.
EMEA
Fiscal Year Ended
Sep 30,
2012
Oct 2,
2011
Sep 30,
2012
Oct 2,
2011
As a % of EMEA
Total Net Revenues
Total net revenues $ 1,141.3 $ 1,046.8 100.0% 100.0%
Cost of sales including occupancy costs 597.3 530.3 52.3% 50.7%
Store operating expenses 371.1 327.3 32.5% 31.3%
Other operating expenses 33.6 36.5 2.9% 3.5%
Depreciation and amortization expenses 57.1 53.4 5.0% 5.1%
General and administrative expenses 72.1 65.0 6.3% 6.2%
Total operating expenses 1,131.2 1,012.5 99.1% 96.7%
Income from equity investees 0.3 6.0 — 0.6%
Operating income $ 10.4 $ 40.3 0.9% 3.8%
Supplemental ratios as a % of related revenues:
Store operating expenses 38.3% 36.1%
Revenues
EMEA total net revenues for fiscal 2012 increased 9%, or $95 million, primarily driven by increased revenues
from company-operated stores (contributing $63 million), due to the acquisition of the remaining interest in our
previous joint venture operations in Switzerland and Austria in the fourth quarter of fiscal 2011 (approximately
$80 million), partially offset by unfavorable foreign currency fluctuations (approximately $33 million).
An increase in licensed store revenues of $27 million also contributed to the increase in total net revenues,
primarily due to higher product sales to and royalty revenues from our licensees, resulting from the opening of
101 net new licensed stores over the past 12 months.
Operating Expenses
Cost of sales including occupancy costs as a percentage of total net revenues increased 160 basis points, primarily
driven by higher costs related to the transition to a consolidated food and dairy distribution model in the UK that
began in the first quarter of fiscal 2012 (approximately 180 basis points). These costs are expected to decline over
time as the full benefits of the transition are realized. Also contributing to the decrease were costs related to store
portfolio optimization initiatives occurring in the fourth quarter of fiscal 2012 (approximately 60 basis points),
partially offset by increased sales leverage on occupancy costs.
Store operating expenses as a percentage of total net revenues increased 120 basis points. Store operating
expenses as a percentage of company-operated store revenues increased 220 basis points, primarily driven by asset
impairments related to underperforming stores (approximately 140 basis points). Also contributing to the decrease
were costs related to store portfolio optimization initiatives occurring in the fourth quarter of fiscal 2012
(approximately 40 basis points).
%