Starbucks Annual Report Analysis
Accounting 206
Stacie M. Moore
Professor Aisha Meeks, CPA
Strayer University
November 30, 2013
Analysis of Starbucks Annual Report (2012)
Starbucks Corporation first opened its doors in 1971 in Seattle, Washington. Starbucks is the leading manufacturer and retailer of premium coffee and coffee related beverages in the world, with stores 18,000 on six continents. In America Starbucks is the largest retailer of coffees including the Starbucks brand and the Teavana brand. Starbucks employed nearly 160,000 people worldwide at the end of September 2012, with 120,000 of those people in the United States. Starbucks is headed by a Board of Directors that consists of 12 directors including Howard Schultz, CEO, Senator William Bradley, and Secretary Robert Gates. (Starbucks, 2013).
Starbucks first offered their stocks publicly on June 26, 1992 at a price of $17 per share. The stock had a closing value that day of $21.50 per share. The current market price per share of stock in Starbucks is $81.46. Starbucks has had five 2-for-1 stock splits early on, and switched to dividends starting in 2010. In 2012, Howard Schultz received compensation including incentive bonuses totaled $15.8 million, a portion of which was taken as stock options. Mr. Schultz’s base salary of $1.5 million is voted on and approved at the annual shareholders meeting, which may be attended by any and all shareholders. (Starbucks, 2012)
As of November 9, 2012 Starbucks had 743.6 million shares of Common stock outstanding with a par value of $0.001 per share, with 1.2 billion shares of Common stock authorized. In 2012 the Board of Directors declared a dividend of $543.7 million payable to the shareholders. Dividends were declared and paid quarterly, with Q1 dividends being $128.2 million ($0.17 per share), Q2 dividends being $129.0 million ($0.17 per share), Q3 dividends being $129.1 million ($0.17 per share), and Q4 dividends being $157.4 million ($0.21 per share). (Starbucks, 2012)
The main source of income for Starbucks is generated from company-owned stores, licensed stores, consumer packaged goods, and foodservice operations. During 2012 company-owned stores comprised 61% of the revenue generated and licensed stores contributed 39% toward total revenues in the Americas, with company-owned stores contributing to 79% of the total net revenues globally. At the end of the fiscal year 2012 Starbucks had a total of 7,857 stores open in the Americas, as opposed to 7,623 at the end of fiscal year 2011, an increase of 234 stores in the Americas. Globally Starbucks saw an increase of company-owned stores with 9,405 open at the end of fiscal year 2012 versus 9,007 at the end of fiscal year 2011. (Starbucks, 2012)
The Board of Directors authorized the payment of dividends, as well as a stock
