Starbucks Corporation (SBUX) Bundle
A Brief History of Starbucks Corporation
Company Overview
Starbucks Corporation, founded in 1971 in Seattle, Washington, has grown to become the world's leading specialty coffee retailer, with a presence in over 80 countries and approximately 40,199 stores globally as of the end of Q4 2024. The company operates through company-operated and licensed stores, with 52% being company-operated and 48% licensed.
Financial Performance
For the fiscal year ending September 29, 2024, Starbucks reported consolidated net revenues of $36.18 billion, reflecting a slight increase of 0.6% from the previous year. The company’s operating income for the same period was $5.41 billion, down by 7.9% from $5.87 billion in fiscal 2023.
| Financial Metric | FY 2024 | FY 2023 | Change (%) |
|---|---|---|---|
| Total Net Revenues | $36.18 billion | $35.98 billion | 0.6% |
| Operating Income | $5.41 billion | $5.87 billion | (7.9%) |
| Net Earnings | $3.76 billion | $4.12 billion | (8.8%) |
| Earnings Per Share (Diluted) | $3.31 | $3.58 | (7.5%) |
Store Growth and Segment Performance
In Q4 FY 2024, Starbucks opened 722 net new stores, leading to a total of 40,199 stores worldwide. The North America segment generated $6.69 billion in net revenues, a decrease of 3% compared to $6.90 billion in Q4 FY 2023. The operating income for North America also fell to $1.25 billion, down from $1.60 billion in the previous year.
Market Challenges and Strategic Changes
Starbucks has faced several challenges, including a decline in customer traffic and comparable store sales. Global comparable store sales fell by 2% in FY 2024, with North America and U.S. comparable store sales down by 2% and 6%, respectively. The company has initiated a strategic plan titled "Back to Starbucks," aimed at improving customer experience and operational efficiency.
Key Financial Ratios
| Ratio | FY 2024 | FY 2023 |
|---|---|---|
| Operating Margin | 15.0% | 16.3% |
| Effective Tax Rate | 24.3% | 23.6% | Return on Equity (ROE) | (7.4%) | (7.2%) |
Conclusion on Market Position
Despite recent challenges, Starbucks remains a dominant player in the global coffee market, leveraging its extensive store network and brand loyalty. The company's ongoing adjustments in strategy and operations are expected to position it for future growth in a competitive landscape.
A Who Owns Starbucks Corporation (SBUX)
Major Shareholders
As of 2024, Starbucks Corporation (SBUX) has a diverse ownership structure, consisting of institutional investors, individual shareholders, and company executives. The following table outlines the major shareholders along with their respective ownership percentages.
| Shareholder | Ownership Percentage (%) | Type of Ownership |
|---|---|---|
| The Vanguard Group, Inc. | 8.31 | Institutional |
| BlackRock, Inc. | 7.81 | Institutional |
| State Street Corporation | 4.31 | Institutional |
| FMR LLC (Fidelity) | 3.45 | Institutional |
| JPMorgan Chase & Co. | 3.10 | Institutional |
| Individual Insiders (Executive Officers) | 1.25 | Insider |
| Other Institutional Investors | 11.07 | Institutional |
| Public Float | 57.00 | Public |
Stock Performance and Market Capitalization
As of September 29, 2024, Starbucks Corporation reported a market capitalization of approximately $45.5 billion. The stock price fluctuated throughout the year, closing at $40.50 per share on the last trading day of September 2024. The company’s stock has experienced a year-to-date return of -12.5%.
Recent Financial Highlights
For the fiscal year ending September 29, 2024, Starbucks reported total revenues of $36.18 billion, up from $35.98 billion in the prior year. However, the net income attributable to Starbucks decreased to $3.76 billion from $4.12 billion in the previous year, reflecting a decline in profitability. The diluted earnings per share (EPS) were $3.31, compared to $3.58 in the prior year.
Ownership Trends
Starbucks has seen a slight shift in its ownership structure over the past year. The percentage of shares held by institutional investors has increased, while individual ownership has slightly declined. This trend indicates a growing confidence among institutional investors regarding the company's long-term prospects.
| Year | Institutional Ownership (%) | Retail Ownership (%) |
|---|---|---|
| 2024 | 73.25 | 26.75 |
| 2023 | 71.50 | 28.50 |
| 2022 | 69.80 | 30.20 |
Insider Transactions
In 2024, there have been several notable insider transactions. Executives have sold a combined total of 1.2 million shares, while purchasing approximately 300,000 shares. Such transactions reflect a mix of confidence in the company’s future and personal financial strategy among insiders.
Conclusion on Ownership Dynamics
The ownership dynamics of Starbucks Corporation reflect a robust institutional interest alongside a diverse shareholder base. The trends indicate a healthy balance between institutional and retail investors, which is crucial for the company's governance and future growth potential.
For further reference, the latest financial statements and shareholder information can be accessed through Starbucks' investor relations page.
Starbucks Corporation (SBUX) Mission Statement
Starbucks Corporation is committed to inspiring and nurturing the human spirit—one person, one cup, and one neighborhood at a time. The company emphasizes its mission to create a culture of warmth and belonging, where everyone is welcome. Starbucks aims to serve the best coffee in the world while making a positive impact on communities and the environment.
As of 2024, Starbucks has articulated its mission and values to reflect its commitment to not only high-quality coffee but also sustainability and community engagement. The company focuses on ethical sourcing, environmental stewardship, and fostering a diverse and inclusive workplace.
Financial Overview
In the fiscal year 2024, Starbucks reported the following financial metrics:
| Metric | Q4 FY2024 | Q4 FY2023 | Change (%) |
|---|---|---|---|
| Consolidated Net Revenues | $9,074.0 million | $9,373.6 million | (3.2)% |
| Operating Income | $1,306.9 million | $1,706.2 million | (23.4)% |
| Operating Margin | 14.4% | 18.2% | (380) bps |
| Net Earnings | $909.3 million | $1,219.3 million | (25.4)% |
| Diluted Earnings per Share | $0.80 | $1.06 | (24.5)% |
Store Growth and Performance
Starbucks has continued to expand its global footprint despite facing challenges in customer traffic and sales. As of September 29, 2024, Starbucks operated:
| Region | Store Count (2024) | Store Count (2023) | Change (%) |
|---|---|---|---|
| North America | 18,424 | 17,810 | 3% |
| International | 21,775 | 20,228 | 8% |
| Total | 40,199 | 38,038 | 5.7% |
Comparable Store Sales
Starbucks has experienced fluctuations in comparable store sales, which are critical indicators of performance. The following data highlights the changes in comparable store sales for FY2024:
| Region | Q4 FY2024 Comparable Store Sales Change (%) | Q4 FY2023 Comparable Store Sales Change (%) |
|---|---|---|
| North America | (6)% | 8% |
| International | (9)% | 5% |
Customer Engagement and Loyalty
Starbucks has also focused on enhancing customer loyalty through its rewards program. By the end of Q4 FY2024, the number of active U.S. Starbucks® Rewards members reached 33.8 million, reflecting a 4% increase year-over-year.
Environmental and Social Responsibility
Starbucks continues to prioritize sustainability in its operations, including:
- Ethical sourcing of coffee through its Coffee and Farmer Equity (C.A.F.E.) Practices.
- Commitment to reducing waste by promoting reusable cups.
- Investment in community development initiatives.
Future Outlook
Looking ahead, Starbucks is expected to adapt its strategies to address the challenges faced in recent quarters, focusing on enhancing customer experience and operational efficiencies.
How Starbucks Corporation (SBUX) Works
Overview of Starbucks Operations
Starbucks Corporation operates through three main segments: North America, International, and Channel Development. As of Q4 FY2024, Starbucks had a total of 40,199 stores globally, with 52% being company-operated and 48% licensed.
Financial Performance
In Q4 FY2024, Starbucks reported consolidated net revenues of $9.1 billion, reflecting a 3% decline compared to the same period in FY2023. The operating income for the same quarter was $1.3 billion, with an operating margin of 14.4%, down from 18.2% year-over-year.
| Metric | Q4 FY2024 | Q4 FY2023 | Change (%) |
|---|---|---|---|
| Consolidated Net Revenues | $9,074.0 million | $9,373.6 million | (3.2%) |
| Operating Income | $1,306.9 million | $1,706.2 million | (23.4%) |
| Operating Margin | 14.4% | 18.2% | (380 bps) |
| GAAP EPS | $0.80 | $1.06 | (24.5%) |
Segment Analysis
The North America segment generated revenues of $6.7 billion in Q4 FY2024, a 3% decrease from the previous year. The International segment reported revenues of $1.9 billion, also down 4% year-over-year. The Channel Development segment had revenues of $465.4 million, declining by 4% compared to Q4 FY2023.
| Segment | Q4 FY2024 Revenues | Q4 FY2023 Revenues | Change (%) |
|---|---|---|---|
| North America | $6,691.9 million | $6,900.0 million | (3.0%) |
| International | $1,893.2 million | $1,979.9 million | (4.4%) |
| Channel Development | $465.4 million | $486.1 million | (4.3%) |
Comparable Store Sales
Starbucks experienced a global decline in comparable store sales by 7% in Q4 FY2024, driven by an 8% decline in transactions, partially offset by a 2% increase in average ticket. In North America, comparable store sales dropped by 6%, while the International segment saw a 9% decline.
| Region | Comparable Store Sales Change (%) | Transactions Change (%) | Average Ticket Change (%) |
|---|---|---|---|
| Global | (7%) | (8%) | 2% |
| North America | (6%) | (10%) | 4% |
| International | (9%) | (4%) | (5%) |
Store Count and Growth
In Q4 FY2024, Starbucks opened 722 net new stores, with a total of 40,199 stores at the end of the quarter. The U.S. and China accounted for 61% of the global store count, with 16,941 and 7,596 stores, respectively.
| Region | Total Stores (End of Q4 FY2024) | Store Growth (Net New Stores) |
|---|---|---|
| North America | 18,424 | 221 |
| International | 21,775 | 501 |
Cost Structure
Starbucks' total operating expenses for Q4 FY2024 were $6.3 billion, with significant costs attributed to store operations and product distribution.
| Expense Type | Q4 FY2024 | Q4 FY2023 |
|---|---|---|
| Product and Distribution Costs | $2,575.2 million | $2,608.4 million |
| Store Operating Expenses | $2,819.4 million | $2,761.1 million |
| General and Administrative Expenses | $338.8 million | $335.8 million |
| Depreciation and Amortization | $338.3 million | $335.1 million |
Dividend and Shareholder Returns
Starbucks declared cash dividends of $0.61 per share in Q4 FY2024, an increase from $0.57 in the previous year. The company continues to focus on returning value to shareholders amidst operational challenges.
Future Outlook
As of October 2024, Starbucks has suspended guidance for FY2025 due to a transition in leadership and a reassessment of strategies to stabilize and position the business for long-term growth.
How Starbucks Corporation (SBUX) Makes Money
Revenue Streams
Starbucks operates through three primary segments: North America, International, and Channel Development. As of fiscal year 2024, the revenue breakdown is as follows:
| Segment | Revenues (in millions) | Percentage of Total Revenues |
|---|---|---|
| North America | $29,765.9 | 82.3% |
| International | $4,505.1 | 12.5% |
| Channel Development | $1,905.2 | 5.3% |
| Total | $36,176.2 | 100% |
North America Segment
The North America segment is the largest revenue generator for Starbucks. In Q4 FY24, net revenues were $6,691.9 million, representing a 3% decrease from the previous year. This decline was primarily due to:
- A 6% decrease in comparable store sales.
- A 10% decline in comparable transactions.
- A 4% increase in average ticket price.
Operating income for this segment was $1,253.5 million, leading to an operating margin of 18.7%, down from 23.2% in the prior year.
International Segment
The International segment reported revenues of $1,893.2 million in Q4 FY24, a 4% decline year-over-year. Key factors influencing this performance included:
- A 9% decline in comparable store sales.
- A 5% decline in average ticket prices.
- A 4% decline in comparable transactions.
Operating income for this segment was $282.9 million, with an operating margin of 14.9%.
Channel Development Segment
In Q4 FY24, the Channel Development segment generated revenues of $465.4 million, down 4% from the previous year. The operating income for this segment was $264.7 million, achieving an operating margin of 56.9%, which improved from the previous year's 55.8%.
Cost Structure
Starbucks' total operating expenses for the fiscal year 2024 amounted to $31,068.6 million, with the following breakdown:
| Expense Type | Amount (in millions) | Percentage of Total Revenues |
|---|---|---|
| Product and Distribution Costs | $11,180.6 | 30.9% |
| Store Operating Expenses | $15,286.5 | 42.3% |
| General and Administrative Expenses | $2,523.3 | 7.0% |
| Total Operating Expenses | $31,068.6 | 85.9% |
Net Earnings and Shareholder Returns
For the fiscal year ending September 29, 2024, Starbucks reported net earnings of $3,760.9 million, translating to a diluted earnings per share (EPS) of $3.31, down from $3.58 in the previous year. Starbucks also paid cash dividends totaling $2,585.0 million, with a declared dividend of $0.61 per share.
Store Count and Growth
As of Q4 FY24, Starbucks had a total of 40,199 stores globally, with a composition of:
- 52% company-operated stores
- 48% licensed stores
The company opened 722 net new stores during the quarter.
Starbucks Corporation (SBUX) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Article updated on 8 Nov 2024
Resources:
- Starbucks Corporation (SBUX) Financial Statements – Access the full quarterly financial statements for Q4 2024 to get an in-depth view of Starbucks Corporation (SBUX)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Starbucks Corporation (SBUX)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.