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34 Starbucks Corporation 2014 Form 10-K
EMEA
Fiscal Year Ended Sep 29,
2013 Sep 30,
2012 Sep 29,
2013 Sep 30,
2012
As a % of EMEA Total
Net Revenues
Net revenues:
Company-operated stores $ 932.8 $ 968.3 80.4 % 84.8 %
Licensed stores 190.3 139.5 16.4 12.2
CPG, foodservice and other 36.9 33.5 3.2 2.9
Total net revenues 1,160.0 1,141.3 100.0 100.0
Cost of sales including occupancy costs 590.9 597.3 50.9 52.3
Store operating expenses 339.4 371.1 29.3 32.5
Other operating expenses 38.5 33.6 3.3 2.9
Depreciation and amortization expenses 55.5 57.1 4.8 5.0
General and administrative expenses 71.9 75.7 6.2 6.6
Total operating expenses 1,096.2 1,134.8 94.5 99.4
Income from equity investees 0.4 0.3 — —
Operating income $ 64.2 $ 6.8 5.5% 0.6%
Store operating expenses as a percentage of company-
operated store revenues 36.4 % 38.3 %
Revenues
EMEA total net revenues for fiscal 2013 increased $19 million, or 2%, over fiscal 2012. Licensed store revenues grew $51
million, or 36%, due to increased product sales to and higher royalty revenues from licensees, primarily from the opening of
129 net new licensed stores over the past 12 months and improved comparable store sales. This growth was largely offset by a
decline of $36 million in company-operated store revenues resulting from our store portfolio optimization activities which
began in the prior year.
Operating Expenses
Cost of sales including occupancy costs as a percentage of total net revenues decreased 140 basis points, primarily due to lower
occupancy costs resulting from our store portfolio optimization initiatives in Europe that began in the fourth quarter of fiscal
2012 (approximately 120 basis points) and a reduction to the estimated asset retirement obligations of our store leases in the
region in fiscal 2013 (approximately 70 basis points). These improvements were partially offset by the impact of the shift in
composition of our store portfolio in the region to more licensed stores, which have a lower gross margin.
Store operating expenses as a percentage of total net revenues decreased 320 basis points. As a percentage of company-
operated store revenues, store operating expenses decreased 190 basis points, primarily from our store portfolio optimization
initiatives (approximately 120 basis points).
Other operating expenses as a percentage of total net revenues increased 40 basis points. As a percentage of non-company-
operated store revenues, other operating expenses decreased 250 basis points, mainly driven by sales leverage (approximately
180 basis points).
The above changes contributed to an overall improvement in operating margin of 490 basis points over fiscal 2012.