Starbucks Reports Q1 Fiscal 2024 Results, Sees Global Store Sales Up 5% CoffeeNetwork (New York) - Starbucks Corporation (Nasdaq: SBUX) today reported financial results for its 13-week fiscal first quarter ended December 31, 2023.
Q1 Fiscal 2024 Highlights
- Global comparable store sales increased 5%, driven by a 3% increase in comparable transactions and 2% increase in average ticket
- North America and U.S. comparable store sales increased 5%, driven by a 4% increase in average ticket and 1% increase in comparable transactions
- International comparable store sales increased 7%, driven by a 11% increase in comparable transactions and 3% decline in average ticket; China comparable store sales increased 10%, driven by a 21% increase in comparable transactions and 9% decline in average ticket
- The company opened 549 net new stores in Q1, ending the period with 38,587 stores: 51% company-operated and 49% licensed
- At the end of Q1, stores in the U.S. and China comprised 61% of the company’s global portfolio, with 16,466 and 6,975 stores in the U.S. and China, respectively
- Consolidated net revenues up 8%, including on a constant currency basis, to a record $9.4 billion
- GAAP operating margin expanded 140 basis points year-over-year to 15.8%, primarily driven by sales leverage and in-store operational efficiencies. This expansion was partially offset by investments in store partner wages and benefits, as well as higher general and administrative costs in support of Reinvention.
- Non-GAAP operating margin expanded 130 basis points to 15.8% from 14.5% year-over-year, including on a constant currency basis
- GAAP earnings per share of $0.90 grew 22% over prior year
- Non-GAAP earnings per share of $0.90 grew 20% over prior year, including on a constant currency basis
- Starbucks Rewards loyalty program 90-day active members in the U.S. increased to 34.3 million, up 13% year-over-year
Net revenues for the North America segment grew 9% over Q1 FY23 to $7.1 billion in Q1 FY24, primarily driven by a 5% increase in comparable store sales, driven by a 4% increase in average ticket and a 1% increase in comparable transactions, net new company-operated store growth of 4% over the past 12 months, as well as growth in our licensed store business.
Operating income increased to $1.5 billion in Q1 FY24 compared to $1.2 billion in Q1 FY23. Operating margin of 21.4% expanded from 18.5% in the prior year, primarily driven by in-store operational efficiencies and sales leverage. This expansion was partially offset by investments in store partner wages and benefits in support of Reinvention.
Net revenues for the International segment grew 10% over Q1 FY23 to $1.8 billion in Q1 FY24, primarily driven by net new company-operated store growth of 12% over the past 12 months and a 7% increase in comparable store sales, driven by an 11% increase in comparable transactions and a 3% decline in average ticket. These increases were partially offset by approximately 2% unfavorable impact from foreign currency translation.
Operating income increased to $241.5 million in Q1 FY24 compared to $240.4 million in Q1 FY23. Operating margin of 13.1% contracted from 14.3% in the prior year, primarily driven by investments in store partner wages and benefits, business mix shift and strategic investments. This contraction was partially offset by sales leverage.
Net revenues for the Channel Development segment declined 6% over Q1 FY23 to $448.0 million in Q1 FY24, primarily due to a decline in revenue in the Global Coffee Alliance following the sale of Seattle's Best Coffee brand in Q2 FY23 and a decrease in global ready-to-drink revenue.
Operating income decreased to $209.7 million in Q1 FY24 compared to $226.3 million in Q1 FY23. Operating margin of 46.8% contracted from 47.3% in the prior year, primarily driven by product costs related to the Global Coffee Alliance, partially offset by business mix shift.
Alexis Rubinstein
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