Starbucks Case Study

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Pages: 19
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Case Write Up

1)

General
Calculate common-size income statements for Starbucks’ fiscal years 2011, 2012 and 2013. Describe any tr major revenue streams.
$
FY2012

FY2013

FY2011

Net revenues:
Company-operated stores
Licensed stores
CPG, foodservice and other
Total net revenues

$11,793
$1,361
$1,739
$14,892

$10,535
$1,210
$1,555
$13,300

$9,632
$1,008
$1,061
$11,700

COGS (incl. Occupancy Costs)
Store operating expenses
Other operating expenses
D&A Expenses
G&A Expenses
Litigation charge
Total operating expenses

$6,382
4,286
457
621
938
2,784
$15,469

$5,813
3,918
430
550
801
0
$11,513

$4,916
3,595
393
523
749
0
$10,176

Gain on sale of properties
Income from equity investees
Operating income/(loss)

$0
251
($325)

$0
211
$1,997

$30
174
$1,729

Interest income and other, net
Interest expense
Earnings/(loss) before Income Taxes

$124
(28)
($230)

$94
(33)
$2,059

$116
(33)
$1,811

Income taxes
Net Earnings (incl Noncontrolling Interests)

($239)
$9

$674
$1,385

$563
$1,248

$1
$8

$1
$1,384

$2
$1,246

$0.0
$0.0

$1.8
$1.8

$1.7
$1.6

Weighted average shares outstanding:
Basic
Diluted

749.3
762.3

754.4
773.0

748.3
769.7

Cash dividends declared per share

$0.89

$0.72

$0.56

Net earnings attributable to noncontrolling interests
Net earnings attributable to Starbucks
Earnings per share - basic
Earnings per share - diluted

Revenue analysis:
Company-operated stores are growing slower than licensed stores. This metric, however is not same store s the number of licensed stores increases more than that of company-owned the revenue growth is not due to
FoodService and other are growing similarly to stores in 2013 but rapidly expanded in 2012.
The relative portion of revenue from each segment is similar between 2012 and 2013, but compared to 2011 compared to store revenue.
2)

Calculate growth in revenues for each one of the three revenue categories on their income statement from 2

2013, what is the average revenue per company-store? Per licensed store? Estimate how much of the grow stores. Of Starbucks’ three categories of Beverage, Food and Packaged/Single Serve coffees, which is grow

Company-operated stores
Licensed stores
CPG, foodservice and other
Total net revenues

YoY % Growth
FY2013
FY2012
11.9%
9.4%
12.4%
20.1%
11.8%
46.6%
12.0%
13.7%
$ or Units
FY2013
FY2012

Net revenues ($ in millions)
Company-operated stores
Licensed stores
CPG, foodservice and other
Total net revenues
Store Count
Company-operated stores
Licensed stores
Total
Avg Revenue per Store ($ in millions)
Company-operated stores
Licensed stores
Total

Company-operated stores
Licensed stores

YoY Growth

$11,793
1,361
1,739
$14,892

$10,535
1,210
1,555
$13,300

11.9%
12.4%
11.8%
12.0%

10,194
9,573
19,767

9,364
8,702
18,066

8.9%
10.0%
9.4%

$1.16
$0.14
$0.75

$1.13
$0.14
$0.74

2.8%
2.2%
2.3%

Rev
Growth New Store
New Store Rev Growth
New Store
Growth
Growth
($)
8.9%
3.1%
$363.8
10.0%
2.4%
$32.7

Estimated revenue growth from new company owned stores is $364MM, and for licensed stores $33MM.

Revenue % by Product Type:
Beverages
Food
Packaged and single serve coffees
Coffee-making equipment and other merchandis
Total

% of Total Revenue
FY2013
FY2012
74%
75%
20%
19%
3%
4%
3%
2%
100%
100%

$ Rev
FY2013
$11,020
2,978
447
447
$14,892

Coffee-making equipment and other merchandise is the fastest growing segment in terms of % growth. This
Beverages are still the largest growth category economically, but not in terms of year on year percent growth and single serve coffees. This is, however, an economically small part of the business.
3)

Estimate purchases by Starbucks’ customers for fiscal years 2011, 2012 and 2013, and calculate growth rat and 2012 to 2013.
Total Revenue
YoY Revenue Growth
Product sales to and royalty and license fee revenues from licensed stores accounted for 9% of total net rev

Revenue recognized on unredeemed stored value cards
Total Non-Customer Purchase Revenue
Total Customer Purchase Revenue
YoY Revenue Growth
4)

The table
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