Starbucks reports q4 and full year fiscal 2022 results
Seattle--(business wire)--starbucks corporation (nasdaq: sbux) today reported financial results for its 13-week fiscal fourth quarter and 52-week fiscal year ended october 2, 2022. the comparable prior-year periods in fiscal 2021 included 14- and 53-weeks, respectively. gaap results in fiscal 2022 and fiscal 2021 include items that are excluded from non-gaap results. please refer to the reconciliation of gaap measures to non-gaap measures at the end of this release for more information. q4 fiscal 2022 highlights global comparable store sales increased 7%, primarily driven by an 8% increase in average ticket north america and u.s. comparable store sales increased 11%, driven by a 10% increase in average ticket and a 1% increase in comparable transactions international comparable store sales decreased 5%, driven by a 5% decline in comparable transactions and a 1% decline in average ticket; china comparable store sales decreased 16%, driven by a 17% decline in comparable transactions, partially offset by a 1% increase in average ticket north america and u.s. comparable store sales increased 11%, driven by a 10% increase in average ticket and a 1% increase in comparable transactions international comparable store sales decreased 5%, driven by a 5% decline in comparable transactions and a 1% decline in average ticket; china comparable store sales decreased 16%, driven by a 17% decline in comparable transactions, partially offset by a 1% increase in average ticket the company opened 763 net new stores in q4, ending the period with 35,711 stores globally: 51% company-operated and 49% licensed at the end of q4, stores in the u.s. and china comprised 61% of the company’s global portfolio, with 15,878 stores in the u.s. and 6,021 stores in china at the end of q4, stores in the u.s. and china comprised 61% of the company’s global portfolio, with 15,878 stores in the u.s. and 6,021 stores in china consolidated net revenues up 3%, or 11% on a 13-week basis, to a record $8.4 billion, inclusive of a 3% unfavorable impact from foreign currency translation gaap operating margin of 14.2% decreased 400 basis points from 18.2% in the prior year, primarily driven by investments and growth in labor including enhanced store partner wages as well as increased spend on new partner training, inflationary pressures, coupled with sales deleverage related to covid-19 restrictions in china, partially offset by strategic pricing, primarily in north america and sales leverage across markets outside of china non-gaap operating margin of 15.1% decreased from 19.5% in the prior year, or 18.9% on a 13-week basis non-gaap operating margin of 15.1% decreased from 19.5% in the prior year, or 18.9% on a 13-week basis gaap earnings per share of $0.76, down from $1.49 in the prior year non-gaap earnings per share of $0.81, down from $0.99 in the prior year, or $0.89 on a 13-week basis non-gaap earnings per share of $0.81, down from $0.99 in the prior year, or $0.89 on a 13-week basis starbucks rewards loyalty program 90-day active members in the u.s. increased to 28.7 million, up 16% year-over-year full year fiscal 2022 highlights global comparable store sales increased 8%, driven by a 5% increase in average ticket and a 2% increase in comparable transactions north america comparable store sales increased 12%, driven by a 7% increase in average ticket and a 5% increase in comparable transactions; u.s. comparable store sales increased 12%, driven by an 8% increase in average ticket and a 4% increase in comparable transactions international comparable store sales decreased 9%, driven by a 5% decline in comparable transactions and a 4% decline in average ticket; china comparable store sales decreased 24%, driven by a 22% decline in comparable transactions and a 3% decline in average ticket north america comparable store sales increased 12%, driven by a 7% increase in average ticket and a 5% increase in comparable transactions; u.s. comparable store sales increased 12%, driven by an 8% increase in average ticket and a 4% increase in comparable transactions international comparable store sales decreased 9%, driven by a 5% decline in comparable transactions and a 4% decline in average ticket; china comparable store sales decreased 24%, driven by a 22% decline in comparable transactions and a 3% decline in average ticket consolidated net revenues up 11%, or 13% on a 52-week basis, to a record $32.3 billion, inclusive of a 2% unfavorable impact from foreign currency translation gaap operating margin of 14.3% decreased 250 basis points from 16.8% in the prior year, primarily driven by investments and growth in labor including enhanced store partner wages, inflationary pressures, as well as sales deleverage related to covid-19 restrictions in china, partially offset by sales leverage across markets outside of china and strategic pricing, primarily in north america non-gaap operating margin of 15.1% decreased from 18.0% in the prior year, or 17.8% on a 52-week basis non-gaap operating margin of 15.1% decreased from 18.0% in the prior year, or 17.8% on a 52-week basis gaap earnings per share of $2.83, down from $3.54 in the prior year non-gaap earnings per share of $2.96, down from $3.20 in the prior year, or $3.10 on a 52-week basis non-gaap earnings per share of $2.96, down from $3.20 in the prior year, or $3.10 on a 52-week basis “we saw accelerating demand for starbucks coffee around the world in q4 and throughout the year,” said howard schultz, interim chief executive officer. “and our q4 results demonstrate early evidence of the success of our u.s. reinvention investments. reinvention will touch, and elevate, every aspect of our starbucks partner, customer and store experiences, and ideally position starbucks to deliver accelerated, sustainable, long-term, profitable growth and value creation beginning in 2023,” schultz added. “we are incredibly proud of our q4 performance, and our 2023 guidance sets the stage for another year of record performance,” commented rachel ruggeri, chief financial officer. q4 north america segment results quarter ended ($ in millions) oct 2, 2022 oct 3, 2021 (13 weeks ended) (14 weeks ended) change (%) change in comparable store sales (1) 11% 22% change in transactions 1% 18% change in ticket 10% 3% store count 17,295 16,826 3% revenues $6,134.4 $5,763.0 6% operating income $1,141.8 $1,255.8 (9)% operating margin 18.6% 21.8% (320) bps (1) includes only starbucks® company-operated stores open 13 months or longer. comparable store sales exclude the effects of fluctuations in foreign currency exchange rates and siren retail stores. stores that are temporarily closed or operating at reduced hours due to the covid-19 pandemic remain in comparable store sales while stores identified for permanent closure have been removed. net revenues for the north america segment grew 6% (15% on a 13-week basis) over q4 fy21 to $6.1 billion in q4 fy22, primarily driven by an 11% increase in company-operated comparable store sales, driven by a 10% increase in average ticket and a 1% increase in transactions, net new store growth of 3% over the past 12 months and strength in our licensed store sales. these increases were partially offset by the impact of the extra week in fiscal 2021. operating income decreased to $1.1 billion in q4 fy22 compared to $1.3 billion in q4 fy21. operating margin of 18.6% contracted from 21.8% in the prior year, primarily driven by investments and growth in labor including enhanced store partner wages as well as increased spend on new partner training, coupled with higher commodity and supply chain costs due to inflationary pressures. this contraction was partially offset by strategic pricing and sales leverage. q4 international segment results quarter ended ($ in millions) oct 2, 2022 oct 3, 2021 (13 weeks ended) (14 weeks ended) change (%) change in comparable store sales (1) (5)% 3% change in transactions (5)% 6% change in ticket (1)% (2)% store count 18,416 17,007 8% revenues $1,777.0 $1,914.6 (7)% operating income $217.6 $377.4 (42)% operating margin 12.2% 19.7% (750) bps (1) includes only starbucks® company-operated stores open 13 months or longer. comparable store sales exclude the effects of fluctuations in foreign currency exchange rates and siren retail stores. stores that are temporarily closed or operating at reduced hours due to the covid-19 pandemic remain in comparable store sales while stores identified for permanent closure have been removed. net revenues for the international segment declined 7% (1% lower on a 13-week basis) over q4 fy21 to $1.8 billion in q4 fy22, primarily driven by an 11% unfavorable impact from foreign currency translation, the impact of the extra week in fiscal 2021, as well as a 5% decline in comparable store sales, primarily attributable to covid-19 related restrictions in china. these decreases were partially offset by growth in our licensed store revenue including higher product sales, royalty revenues and the conversion of the korea market from a joint venture to a fully licensed market in q4 fy21, as well as net new store growth of 8% over the past 12 months. operating income decreased to $217.6 million in q4 fy22 compared to $377.4 million in q4 fy21. operating margin of 12.2% contracted from 19.7% in the prior year, primarily driven by sales deleverage related to covid-19 restrictions in china, lower government subsidies as well as investments in store partners. this contraction was partially offset by strategic pricing and sales leverage across markets outside of china. q4 channel development segment results quarter ended ($ in millions) oct 2, 2022 oct 3, 2021 (13 weeks ended) (14 weeks ended) change (%) revenues $483.7 $438.3 10% operating income $244.6 $219.8 11% operating margin 50.6% 50.1% 50 bps net revenues for the channel development segment grew 10% (16% on a 13-week basis) over q4 fy21 to $483.7 million in q4 fy22, driven by growth in the global coffee alliance and global ready-to-drink business, partially offset by the extra week in q4 fy21. operating income increased to $244.6 million in q4 fy22 compared to $219.8 million in q4 fy21. operating margin of 50.6% expanded from 50.1% in the prior year, primarily due to business mix shift. fiscal 2023 financial targets the company will discuss fiscal year 2023 financial targets, originally introduced at starbucks 2022 investor day, during its q4 fy22 and full year earnings conference call starting today at 2:00 p.m. pacific time. these items can be accessed on the company's investor relations website during and after the call. the company uses its website as a tool to disclose important information about the company and comply with its disclosure obligations under regulation fair disclosure. company updates conference call starbucks will hold a conference call today at 2:00 p.m. pacific time, which will be hosted by howard schultz, interim ceo, and other members of starbucks executive leadership team. the call will be webcast and can be accessed at http://investor.starbucks.com. a replay of the webcast will be available until end of day friday, december 2, 2022. about starbucks since 1971, starbucks coffee company has been committed to ethically sourcing and roasting high-quality arabica coffee. today, with more than 35,000 stores worldwide, the company is the premier roaster and retailer of specialty coffee in the world. through our unwavering commitment to excellence and our guiding principles, we bring the unique starbucks experience to life for every customer through every cup. to share in the experience, please visit us in our stores or online at stories.starbucks.com or www.starbucks.com. forward-looking statements certain statements contained herein and in our investor conference call related to these results are “forward-looking” statements within the meaning of applicable securities laws and regulations. generally, these statements can be identified by the use of words such as “aim,” “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “feel,” “forecast,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “will,” “would,” and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. these statements include statements relating to trends in or expectations relating to the effects of our existing and any future initiatives, strategies, investments and plans, including our reinvention plan, as well as trends in or expectations regarding our financial results and long-term growth model and drivers; our operations in the u.s. and china; our environmental, social and governance efforts; our partners; economic and consumer trends, including the impact of inflationary pressures; impact of foreign currency translation; pricing actions; the conversion of certain market operations to fully licensed models; our plans for our operations; our relationship and transactions with nestlÉ, including our anticipated sale of seattle's best coffee brand to nestlÉ; tax rates; business opportunities, expansions and new initiatives, including starbucks odyssey; strategic acquisitions; our dividends programs; commodity costs and our mitigation strategies; our liquidity, cash flow from operations, investments, borrowing capacity and use of proceeds; continuing compliance with our covenants under our credit facilities and commercial paper program; repatriation of cash to the u.s.; the likelihood of the issuance of additional debt and the applicable interest rate; the continuing impact of the covid-19 pandemic on our financial results and future availability of governmental subsidies for covid-19 or other public health events; our ceo transition; our share repurchase program; our use of cash and cash requirements; the expected effects of new accounting pronouncements and the estimated impact of changes in u.s. tax law, including on tax rates, investments funded by these changes and potential outcomes; and effects of legal proceedings. such statements are based on currently available operating, financial and competitive information and are subject to various risks and uncertainties. actual future results and trends may differ materially depending on a variety of factors, including, but not limited to: the continuing impact of covid-19 on our business; regulatory measures or voluntary actions that may be put in place to limit the spread of covid-19, including restrictions on business operations or social distancing requirements, and the duration and efficacy of such restrictions; the resurgence of covid-19 infections and the circulation of novel variants of covid-19; fluctuations in u.s. and international economies and currencies; our ability to preserve, grow and leverage our brands; the ability of our business partners and third-party providers to fulfill their responsibilities and commitments; potential negative effects of incidents involving food or beverage-borne illnesses, tampering, adulteration, contamination or mislabeling; potential negative effects of material breaches of our information technology systems to the extent we experience a material breach; material failures of our information technology systems; costs associated with, and the successful execution of, the company’s initiatives and plans; new initiatives and plans or revisions to existing initiatives or plans; our ability to obtain financing on acceptable terms; the acceptance of the company’s products by our customers, evolving consumer preferences and tastes and changes in consumer spending behavior; partner investments, changes in the availability and cost of labor including any union organizing efforts and our responses to such efforts; failure to attract or retain key executive or employee talent or successfully transition executives; significant increased logistics costs; inflationary pressures; the impact of competition; inherent risks of operating a global business including any potential negative effects stemming from the russian invasion of ukraine; the prices and availability of coffee, dairy and other raw materials; the effect of legal proceedings; and the effects of changes in tax laws and related guidance and regulations that may be implemented, including the inflation reduction act of 2022 and other risks detailed in our filings with the securities and exchange commission, including in the “risk factors” and “management's discussion and analysis of financial condition and results of operations” sections of the company’s most recently filed periodic reports on form 10-k and form 10-q and subsequent filings. a forward-looking statement is neither a prediction nor a guarantee of future events or circumstances, and those future events or circumstances may not occur. you should not place undue reliance on the forward-looking statements, which speak only as of the date of this release. we are under no obligation to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise. key metrics the company's financial results and long-term growth model will continue to be driven by new store openings, comparable store sales growth and operating margin management. we believe these key operating metrics are useful to investors because management uses these metrics to assess the growth of our business and the effectiveness of our marketing and operational strategies. starbucks corporation consolidated statements of earnings (unaudited, in millions, except per share data) quarter ended quarter ended oct 2, oct 3, % change oct 2, oct 3, 2022 2021 2022 2021 (13 weeks ended) (14 weeks ended) as a % of total net revenues net revenues: company-operated stores $ 6,901.4 $ 6,864.3 0.5 % 82.0 % 84.3 % licensed stores 998.4 794.5 25.7 11.9 9.8 other 514.4 487.9 5.4 6.1 6.0 total net revenues 8,414.2 8,146.7 3.3 100.0 100.0 product and distribution costs 2,711.0 2,491.1 8.8 32.2 30.6 store operating expenses 3,544.7 3,273.4 8.3 42.1 40.2 other operating expenses 123.1 108.6 13.4 1.5 1.3 depreciation and amortization expenses 357.4 354.7 0.8 4.2 4.4 general and administrative expenses 538.0 501.2 7.3 6.4 6.2 restructuring and impairments 35.1 55.5 (36.8 ) 0.4 0.7 total operating expenses 7,309.3 6,784.5 7.7 86.9 83.3 income from equity investees 90.6 120.0 (24.5 ) 1.1 1.5 operating income 1,195.5 1,482.2 (19.3 ) 14.2 18.2 net gain resulting from divestiture of certain operations — 864.5 nm — 10.6 interest income and other, net 31.0 21.5 44.2 0.4 0.3 interest expense (125.3 ) (120.6 ) 3.9 (1.5 ) (1.5 ) earnings before income taxes 1,101.2 2,247.6 (51.0 ) 13.1 27.6 income tax expense 222.7 483.0 (53.9 ) 2.6 5.9 net earnings including noncontrolling interests 878.5 1,764.6 (50.2 ) 10.4 21.7 net earnings attributable to noncontrolling interests 0.2 0.2 0.0 0.0 0.0 net earnings attributable to starbucks $ 878.3 $ 1,764.4 (50.2 ) 10.4 % 21.7 % net earnings per common share - diluted $ 0.76 $ 1.49 (49.0 )% weighted avg. shares outstanding - diluted 1,152.5 1,187.9 cash dividends declared per share $ 0.53 $ 0.49 supplemental ratios: store operating expenses as a % of company-operated store revenues 51.4 % 47.7 % effective tax rate including noncontrolling interests 20.2 % 21.5 % year ended year ended oct 2, oct 3, % change oct 2, oct 3, 2022 2021 2022 2021 (52 weeks ended) (53 weeks ended) as a % of total net revenues net revenues: company-operated stores $ 26,576.1 $ 24,607.0 8.0 % 82.4 % 84.7 % licensed stores 3,655.5 2,683.6 36.2 11.3 9.2 other 2,018.7 1,770.0 14.1 6.3 6.1 total net revenues 32,250.3 29,060.6 11.0 100.0 100.0 product and distribution costs 10,317.4 8,738.7 18.1 32.0 30.1 store operating expenses 13,561.8 11,930.9 13.7 42.1 41.1 other operating expenses 461.5 359.5 28.4 1.4 1.2 depreciation and amortization expenses 1,447.9 1,441.7 0.4 4.5 5.0 general and administrative expenses 2,032.0 1,932.6 5.1 6.3 6.7 restructuring and impairments 46.0 170.4 (73.0 ) 0.1 0.6 total operating expenses 27,866.6 24,573.8 13.4 86.4 84.6 income from equity investees 234.1 385.3 (39.2 ) 0.7 1.3 operating income 4,617.8 4,872.1 (5.2 ) 14.3 16.8 net gain resulting from divestiture of certain operations — 864.5 nm — 3.0 interest income and other, net 97.0 90.1 7.7 0.3 0.3 interest expense (482.9 ) (469.8 ) 2.8 (1.5 ) (1.6 ) earnings before income taxes 4,231.9 5,356.9 (21.0 ) 13.1 18.4 income tax expense 948.5 1,156.6 (18.0 ) 2.9 4.0 net earnings including noncontrolling interests 3,283.4 4,200.3 (21.8 ) 10.2 14.5 net earnings attributable to noncontrolling interests 1.8 1.0 80.0 0.0 0.0 net earnings attributable to starbucks $ 3,281.6 $ 4,199.3 (21.9 ) 10.2 % 14.5 % net earnings per common share - diluted $ 2.83 $ 3.54 (20.1 )% weighted avg. shares outstanding - diluted 1,158.5 1,185.5 cash dividends declared per share $ 2.00 $ 2.29 supplemental ratios: store operating expenses as a % of company-operated store revenues 51.0 % 48.5 % effective tax rate including noncontrolling interests 22.4 % 21.6 % segment results (in millions) north america oct 2, oct 3, % change oct 2, oct 3, 2022 2021 2022 2021 quarter ended (13 weeks ended) (14 weeks ended) as a % of north america total net revenues net revenues: company-operated stores $ 5,550.5 $ 5,254.3 5.6 % 90.5 % 91.2 % licensed stores 583.4 506.5 15.2 9.5 8.8 other 0.5 2.2 (77.3 ) 0.0 0.0 total net revenues 6,134.4 5,763.0 6.4 100.0 100.0 product and distribution costs 1,770.6 1,580.3 12.0 28.9 27.4 store operating expenses 2,862.2 2,570.8 11.3 46.7 44.6 other operating expenses 51.4 47.3 8.7 0.8 0.8 depreciation and amortization expenses 205.2 189.9 8.1 3.3 3.3 general and administrative expenses 78.8 78.4 0.5 1.3 1.4 restructuring and impairments 24.4 40.5 (39.8 ) 0.4 0.7 total operating expenses 4,992.6 4,507.2 10.8 81.4 78.2 operating income $ 1,141.8 $ 1,255.8 (9.1 )% 18.6 % 21.8 % supplemental ratio: store operating expenses as a % of company-operated store revenues 51.6 % 48.9 % oct 2, oct 3, % change oct 2, oct 3, 2022 2021 2022 2021 year ended (52 weeks ended) (53 weeks ended) as a % of north america total net revenues net revenues: company-operated stores $ 21,214.2 $ 18,737.3 13.2 % 90.8 % 91.6 % licensed stores 2,150.5 1,702.2 26.3 9.2 8.3 other 6.1 8.4 (27.4 ) 0.0 0.0 total net revenues 23,370.8 20,447.9 14.3 100.0 100.0 product and distribution costs 6,677.2 5,453.8 22.4 28.6 26.7 store operating expenses 10,860.0 9,359.5 16.0 46.5 45.8 other operating expenses 202.1 166.0 21.7 0.9 0.8 depreciation and amortization expenses 808.4 753.9 7.2 3.5 3.7 general and administrative expenses 303.3 300.0 1.1 1.3 1.5 restructuring and impairments 33.3 155.4 (78.6 ) 0.1 0.8 total operating expenses 18,884.3 16,188.6 16.7 80.8 79.2 operating income $ 4,486.5 $ 4,259.3 5.3 % 19.2 % 20.8 % supplemental ratio: store operating expenses as a % of company-operated store revenues 51.2 % 50.0 % international oct 2, oct 3, % change oct 2, oct 3, 2022 2021 2022 2021 quarter ended (13 weeks ended) (14 weeks ended) as a % of international total net revenues net revenues: company-operated stores $ 1,350.9 $ 1,610.0 (16.1 )% 76.0 % 84.1 % licensed stores 415.0 288.0 44.1 23.4 15.0 other 11.1 16.6 (33.1 ) 0.6 0.9 total net revenues 1,777.0 1,914.6 (7.2 ) 100.0 100.0 product and distribution costs 611.0 605.1 1.0 34.4 31.6 store operating expenses 682.5 702.6 (2.9 ) 38.4 36.7 other operating expenses 52.4 39.8 31.7 2.9 2.1 depreciation and amortization expenses 121.5 131.6 (7.7 ) 6.8 6.9 general and administrative expenses 92.6 98.4 (5.9 ) 5.2 5.1 total operating expenses 1,560.0 1,577.5 (1.1 ) 87.8 82.4 income from equity investees 0.6 40.3 (98.5 ) 0.0 2.1 operating income $ 217.6 $ 377.4 (42.3 )% 12.2 % 19.7 % supplemental ratio: store operating expenses as a % of company-operated store revenues 50.5 % 43.6 % oct 2, oct 3, % change oct 2, oct 3, 2022 2021 2022 2021 year ended (52 weeks ended) (53 weeks ended) as a % of international total net revenues net revenues: company-operated stores $ 5,361.9 $ 5,869.7 (8.7 )% 77.3 % 84.8 % licensed stores 1,505.0 981.4 53.4 21.7 14.2 other 73.2 70.5 3.8 1.1 1.0 total net revenues 6,940.1 6,921.6 0.3 100.0 100.0 product and distribution costs 2,357.7 2,187.3 7.8 34.0 31.6 store operating expenses 2,701.8 2,571.4 5.1 38.9 37.2 other operating expenses 191.4 147.3 29.9 2.8 2.1 depreciation and amortization expenses 513.0 544.7 (5.8 ) 7.4 7.9 general and administrative expenses 345.3 360.5 (4.2 ) 5.0 5.2 total operating expenses 6,109.2 5,811.2 5.1 88.0 84.0 income from equity investees 2.3 135.3 (98.3 ) 0.0 2.0 operating income $ 833.2 $ 1,245.7 (33.1 )% 12.0 % 18.0 % supplemental ratio: store operating expenses as a % of company-operated store revenues 50.4 % 43.8 % channel development oct 2, oct 3, % change oct 2, oct 3, 2022 2021 2022 2021 quarter ended (13 weeks ended) (14 weeks ended) as a % of channel development total net revenues net revenues: $ 483.7 $ 438.3 10.4 % product and distribution costs 309.0 277.5 11.4 63.9 % 63.3 % other operating expenses 16.0 17.0 (5.9 ) 3.3 3.9 depreciation and amortization expenses — 0.3 nm — 0.1 general and administrative expenses 4.1 3.4 20.6 0.8 0.8 total operating expenses 329.1 298.2 10.4 68.0 68.0 income from equity investees 90.0 79.7 12.9 18.6 18.2 operating income $ 244.6 $ 219.8 11.3 % 50.6 % 50.1 % oct 2, oct 3, % change oct 2, oct 3, 2022 2021 2022 2021 year ended (52 weeks ended) (53 weeks ended) as a % of channel development total net revenues net revenues $ 1,843.6 $ 1,593.6 15.7 % product and distribution costs 1,194.2 1,011.2 18.1 64.8 % 63.5 % other operating expenses 51.6 31.3 64.9 2.8 2.0 depreciation and amortization expenses 0.1 1.2 (91.7 ) 0.0 0.1 general and administrative expenses 12.2 10.8 13.0 0.7 0.7 total operating expenses 1,258.1 1,054.5 19.3 68.2 66.2 income from equity investees 231.8 250.0 (7.3 ) 12.6 15.7 operating income $ 817.3 $ 789.1 3.6 % 44.3 % 49.5 % corporate and other oct 2, oct 3, % change 2022 2021 quarter ended (13 weeks ended) (14 weeks ended) net revenues $ 19.1 $ 30.8 (38.0 )% product and distribution costs 20.4 28.2 (27.7 ) other operating expenses 3.3 4.5 (26.7 ) depreciation and amortization expenses 30.7 32.9 (6.7 ) general and administrative expenses 362.5 321.0 12.9 restructuring and impairments 10.7 15.0 (28.7 ) total operating expenses 427.6 401.6 6.5 operating loss $ (408.5 ) $ (370.8 ) 10.2 % oct 2, oct 3, % change 2022 2021 year ended (52 weeks ended) (53 weeks ended) net revenues $ 95.8 $ 97.5 (1.7 )% product and distribution costs 88.3 86.4 2.2 other operating expenses 16.4 14.9 10.1 depreciation and amortization expenses 126.4 141.9 (10.9 ) general and administrative expenses 1,371.2 1,261.3 8.7 restructuring and impairments 12.7 15.0 (15.3 ) total operating expenses 1,615.0 1,519.5 6.3 operating loss $ (1,519.2 ) $ (1,422.0 ) 6.8 % corporate and other primarily consists of our unallocated corporate operating expenses. starbucks corporation consolidated balance sheets (unaudited, in millions, except per share data) oct 2, 2022 oct 3, 2021 assets current assets: cash and cash equivalents $ 2,818.4 $ 6,455.7 short-term investments 364.5 162.2 accounts receivable, net 1,175.5 940.0 inventories 2,176.6 1,603.9 prepaid expenses and other current assets 483.7 594.6 total current assets 7,018.7 9,756.4 long-term investments 279.1 281.7 equity investments 311.2 268.5 property, plant and equipment, net 6,560.5 6,369.5 operating lease, right-of-use asset 8,015.6 8,236.0 deferred income taxes, net 1,799.7 1,874.8 other long-term assets 554.2 578.5 other intangible assets 155.9 349.9 goodwill 3,283.5 3,677.3 total assets $ 27,978.4 $ 31,392.6 liabilities and shareholders' equity/(deficit) current liabilities: accounts payable $ 1,441.4 $ 1,211.6 accrued liabilities 2,137.1 2,321.2 accrued payroll and benefits 761.7 772.3 current portion of operating lease liability 1,245.7 1,251.3 stored value card liability and current portion of deferred revenue 1,641.9 1,596.1 short-term debt 175.0 — current portion of long-term debt 1,749.0 998.9 total current liabilities 9,151.8 8,151.4 long-term debt 13,119.9 13,616.9 operating lease liability 7,515.2 7,738.0 deferred revenue 6,279.7 6,463.0 other long-term liabilities 610.5 737.8 total liabilities 36,677.1 36,707.1 shareholders' deficit: common stock ($0.001 par value) — authorized, 2,400.0 shares; issued and outstanding, 1,147.9 and 1,180.0 shares, respectively 1.1 1.2 additional paid-in capital 205.3 846.1 retained deficit (8,449.8 ) (6,315.7 ) accumulated other comprehensive income/(loss) (463.2 ) 147.2 total shareholders’ deficit (8,706.6 ) (5,321.2 ) noncontrolling interests 7.9 6.7 total deficit (8,698.7 ) (5,314.5 ) total liabilities and shareholders' equity/(deficit) $ 27,978.4 $ 31,392.6 starbucks corporation consolidated statements of cash flows (unaudited and in millions) year ended oct 2, 2022 oct 3, 2021 sep 27, 2020 operating activities: net earnings including noncontrolling interests $ 3,283.4 $ 4,200.3 $ 924.7 adjustments to reconcile net earnings to net cash provided by operating activities: depreciation and amortization 1,529.4 1,524.1 1,503.2 deferred income taxes, net (37.8 ) (146.2 ) (25.8 ) income earned from equity method investees (268.7 ) (347.3 ) (280.7 ) distributions received from equity method investees 231.2 336.0 227.7 net gain resulting from divestiture of certain operations — (864.5 ) — stock-based compensation 271.5 319.1 248.6 non-cash lease costs 1,497.7 1,248.6 1,197.6 loss on retirement and impairment of assets 91.4 226.2 454.4 other (67.8 ) (6.0 ) 24.5 cash provided by/(used in) changes in operating assets and liabilities: accounts receivable (326.1 ) (43.0 ) (2.7 ) inventories (641.0 ) (49.8 ) (10.9 ) income taxes payable (149.6 ) 286.1 (1,214.6 ) accounts payable 345.5 189.9 (210.8 ) deferred revenue (75.8 ) (6.1 ) 31.0 operating lease liability (1,625.6 ) (1,488.1 ) (1,231.4 ) other operating assets and liabilities 339.6 609.8 (37.0 ) net cash provided by operating activities 4,397.3 5,989.1 1,597.8 investing activities: purchases of investments (377.9 ) (432.0 ) (443.9 ) sales of investments 72.6 143.2 186.7 maturities and calls of investments 67.3 345.5 73.7 additions to property, plant and equipment (1,841.3 ) (1,470.0 ) (1,483.6 ) net proceeds from the divestiture of certain operations 59.3 1,175.0 — other (126.3 ) (81.2 ) (44.4 ) net cash used in investing activities (2,146.3 ) (319.5 ) (1,711.5 ) financing activities: net proceeds/(payments) from issuance of commercial paper 175.0 (296.5 ) — net proceeds from issuance of short-term debt 36.6 215.1 1,406.6 repayments of short-term debt (36.6 ) (349.8 ) (967.7 ) proceeds from issuance of long-term debt 1,498.1 — 4,727.6 repayments of long-term debt (1,000.0 ) (1,250.0 ) — proceeds from issuance of common stock 101.6 246.2 298.8 cash dividends paid (2,263.3 ) (2,119.0 ) (1,923.5 ) repurchase of common stock (4,013.0 ) — (1,698.9 ) minimum tax withholdings on share-based awards (127.2 ) (97.0 ) (91.9 ) other (9.2 ) — (37.7 ) net cash provided by/(used in) financing activities (5,638.0 ) (3,651.0 ) 1,713.3 effect of exchange rate changes on cash and cash equivalents (250.3 ) 86.2 64.7 net increase/(decrease) in cash and cash equivalents (3,637.3 ) 2,104.8 1,664.3 cash and cash equivalents: beginning of period 6,455.7 4,350.9 2,686.6 end of period $ 2,818.4 $ 6,455.7 $ 4,350.9 supplemental disclosure of cash flow information: cash paid during the period for: interest, net of capitalized interest $ 474.7 $ 501.1 $ 396.9 income taxes $ 1,157.6 $ 756.3 $ 1,699.1 supplemental information the following supplemental information is provided for historical and comparative purposes. u.s. supplemental data quarter ended ($ in millions) oct 2, 2022 oct 3, 2021 (13 weeks ended) (14 weeks ended) change (%) revenues $5,703.3 $5,333.4 7% change in comparable store sales (1) 11% 22% change in transactions 1% 19% change in ticket 10% 3% store count 15,878 15,450 3% (1) includes only starbucks® company-operated stores open 13 months or longer. comparable store sales exclude siren retail stores. stores that are temporarily closed or operating at reduced hours due to the covid-19 pandemic remain in comparable store sales while stores identified for permanent closure have been removed. china supplemental data quarter ended ($ in millions) oct 2, 2022 oct 3, 2021 (13 weeks ended) (14 weeks ended) change (%) revenues $775.6 $964.0 (20)% change in comparable store sales (1) (16)% (7)% change in transactions (17)% (2)% change in ticket 1% (5)% store count 6,021 5,360 12% (1) includes only starbucks® company-operated stores open 13 months or longer. comparable store sales exclude the effects of fluctuations in foreign currency exchange rates, stores identified for permanent closure and siren retail stores. stores that are temporarily closed or operating at reduced hours due to the covid-19 pandemic remain in comparable store sales while stores identified for permanent closure have been removed. store data net stores opened/(closed) and transferred during the period quarter ended year ended stores open as of oct 2, 2022 oct 3, 2021 oct 2, 2022 oct 3, 2021 oct 2, 2022 oct 3, 2021 north america: company-operated stores 166 1 355 (248 ) 10,216 9,861 licensed stores 79 73 114 134 7,079 6,965 total north america 245 74 469 (114 ) 17,295 16,826 international: company-operated stores 320 259 765 744 8,037 7,272 licensed stores 198 205 644 543 10,379 9,735 total international 518 464 1,409 1,287 18,416 17,007 total company 763 538 1,878 1,173 35,711 33,833 non-gaap disclosure in addition to the gaap results provided in this release, the company provides certain non-gaap financial measures that are not in accordance with, or alternatives for, generally accepted accounting principles in the united states. our non-gaap financial measures of non-gaap general and administrative expenses (g&a), non-gaap operating income, non-gaap operating income growth, non-gaap operating margin, non-gaap effective tax rate and non-gaap earnings per share exclude the below-listed items and their related tax impacts, as they do not contribute to a meaningful evaluation of the company’s future operating performance or comparisons to the company's past operating performance. the gaap measures most directly comparable to non-gaap g&a, non-gaap operating income, non-gaap operating income growth, non-gaap operating margin, non-gaap effective tax rate and non-gaap earnings per share are general and administrative expenses, operating income, operating income growth, operating margin, effective tax rate and diluted net earnings per share, respectively. non-gaap exclusion rationale restructuring and impairment costs management excludes restructuring and impairment costs relating to the write-down of certain company-operated store and corporate assets. management excludes these items for reasons discussed above. these expenses are anticipated to be completed within a finite period of time. transaction and integration-related costs management excludes transaction and integration costs, primarily amortization, of the acquired intangible assets for reasons discussed above. additionally, the majority of these costs will be recognized over a finite period of time. nestlÉ transaction and integration-related costs management excludes the transaction and integration-related costs related to the global coffee alliance with nestlÉ (inclusive of incremental costs to grow and develop the alliance) for reasons discussed above. sale of certain company-operated business and joint venture operations management excludes the gain related to the sale of evolution fresh, as well as our south korea and russia joint venture operations as these incremental gains were specific to the sale activity and for reasons discussed above. non-gaap g&a, non-gaap operating income, non-gaap operating income growth, non-gaap operating margin, non-gaap effective tax rate and non-gaap earnings per share may have limitations as analytical tools. these measures should not be considered in isolation or as a substitute for analysis of the company’s results as reported under gaap. other companies may calculate these non-gaap financial measures differently than the company does, limiting the usefulness of those measures for comparative purposes. certain non-gaap measures included in this report were not reconciled to the comparable gaap financial measures. the company is unable to reconcile these forward-looking non-gaap financial measures to the most directly comparable gaap measures without unreasonable efforts because the company is currently unable to predict with a reasonable degree of certainty the type and extent of certain items that would be expected to impact gaap measures for these periods but would not impact the non-gaap measures. such items may include acquisitions, divestitures, restructuring and other items, which are fluid and unpredictable in nature. in addition, the company believes such a reconciliation would imply a degree of precision that may be confusing or misleading to investors. the unavailable information could have a significant impact on the company’s gaap financial results. starbucks corporation reconciliation of selected gaap measures to non-gaap measures (unaudited, in millions except per share data) quarter ended (1) consolidated oct 2, 2022 oct 3, 2021 (2) change (13 weeks ended) (14 weeks ended) operating income, as reported (gaap) $ 1,195.5 $ 1,482.2 (19.3)% restructuring and impairment costs (3) 35.1 55.5 transaction and integration-related costs (4) 42.0 48.1 nestlÉ transaction and integration-related costs (5) — 0.1 non-gaap operating income $ 1,272.6 $ 1,585.9 (19.8)% operating margin, as reported (gaap) 14.2 % 18.2 % (400) bps restructuring and impairment costs (3) 0.4 0.7 transaction and integration-related costs (4) 0.5 0.6 nestlÉ transaction and integration-related costs (5) — 0.0 non-gaap operating margin 15.1 % 19.5 % (440) bps diluted net earnings per share, as reported (gaap) $ 0.76 $ 1.49 (49.0)% restructuring and impairment costs (3) 0.03 0.05 transaction and integration-related costs (4) 0.04 0.04 gain resulting from divestiture of certain company-operated business and joint venture operations — (0.73 ) income tax effect on non-gaap adjustments (6) (0.02 ) 0.14 non-gaap eps $ 0.81 $ 0.99 (18.2)% (1) certain numbers may not foot due to rounding convention. (2) in the first quarter of fiscal 2022, the company changed its treatment of removing certain integration costs related to the acquisitions of starbucks japan and east china for its non-gaap financial measures. integration costs, primarily related to information technology investments and compensation-related programs, are deemed to be representative of ongoing operations. these integration costs will remain in our non-gaap measures; non-gaap measures for the quarter ended october 3, 2021 have been recast to reflect this change. (3) represents costs associated with our restructuring efforts. (4) includes amortization expense of acquired intangible assets associated with the acquisition of east china. the fourth quarter of fiscal 2022 also includes other expenses associated with the sale of our evolution fresh business. (5) represents costs associated with the global coffee alliance with nestlÉ. (6) adjustments were determined based on the nature of the underlying items and their relevant jurisdictional tax rates. q4 qtd fy22 non-gaap disclosure details (in millions and before income taxes) q4 qtd fy22 north america international channel development corporate and other consolidated statement of earnings line item restructuring and impairment costs transaction and integration-related costs nestlÉ transaction and integration- related costs transaction and integration-related costs restructuring and impairment costs total non-gaap adjustment other operating expenses $ — $ — $ — $ 2.0 $ — $ 2.0 depreciation and amortization expenses — 40.0 — — — 40.0 restructuring and impairments 24.4 — — — 10.7 35.1 total impact to operating income $ (24.4 ) $ (40.0 ) $ — $ (2.0 ) $ (10.7 ) $ (77.1 ) non-operating gain interest income and other, net $ 0.3 starbucks corporation reconciliation of selected gaap measures to non-gaap measures (unaudited, in millions except per share data) year ended (1) consolidated oct 2, 2022 oct 3, 2021 (2) (52 weeks ended) (53 weeks ended) operating income, as reported (gaap) $ 4,617.8 $ 4,872.1 (5.2)% restructuring and impairment costs (3) 46.0 170.4 transaction and integration-related costs (4) 191.2 198.1 nestlÉ transaction and integration-related costs (5) — (22.7 ) non-gaap operating income $ 4,855.0 $ 5,217.9 (7.0)% operating margin, as reported (gaap) 14.3 % 16.8 % (250) bps restructuring and impairment costs (3) 0.1 0.6 transaction and integration-related costs (4) 0.6 0.7 nestlÉ transaction and integration-related costs (5) — (0.1 ) non-gaap operating margin 15.1 % 18.0 % (290) bps diluted net earnings per share, as reported (gaap) $ 2.83 $ 3.54 (20.1)% restructuring and impairment costs (3) 0.04 0.14 transaction and integration-related costs (4) 0.17 0.17 nestlÉ transaction and integration-related costs (5) — (0.02 ) gain resulting from divestiture of certain company-operated business and joint venture operations (0.01 ) (0.73 ) correction of prior year estimated tax expense (6) (0.02 ) — income tax effect on non-gaap adjustments (7) (0.05 ) 0.10 non-gaap eps $ 2.96 $ 3.20 (7.5)% (1) certain numbers may not foot due to rounding convention. (2) in the first quarter of fiscal 2022, the company changed its treatment of removing certain integration costs related to the acquisitions of starbucks japan and east china for its non-gaap financial measures. integration costs, primarily related to information technology investments and compensation-related programs, are deemed to be representative of ongoing operations. these integration costs will remain in our non-gaap measures; non-gaap measures for the year ended october 3, 2021 have been recast to reflect this change. (3) represents costs associated with our restructuring efforts. (4) includes amortization expense of acquired intangible assets associated with the acquisition of east china. fiscal 2022 also includes other expenses associated with our russia market exit and with the sale of our evolution fresh business. fiscal 2021 also includes amortization expense of acquired intangible assets associated with the acquisition of starbucks japan. (5) represents costs associated with the global coffee alliance with nestlÉ and a change in estimate relating to a transaction cost accrual. (6) represents a beneficial return-to-provision adjustment related to the prior year divestiture of certain joint venture operations that also received non-gaap treatment. (7) adjustments were determined based on the nature of the underlying items and their relevant jurisdictional tax rates. ytd fy22 non-gaap disclosure details (in millions and before income taxes) q4 ytd fy22 north america international channel development corporate and other consolidated statement of earnings line item restructuring and impairment costs transaction and integration-related costs nestlÉ transaction and integration- related costs transaction and integration-related costs restructuring and impairment costs total non-gaap adjustment other operating expenses $ — $ 20.0 $ — $ 4.0 $ — $ 24.0 depreciation and amortization expenses — 167.1 — — — 167.1 general and administrative expenses — 0.1 — — — 0.1 restructuring and impairments 33.3 — — — 12.7 46.0 total impact to operating income $ (33.3 ) $ (187.2 ) $ — $ (4.0 ) $ (12.7 ) $ (237.2 ) non-operating gain interest income and other, net $ 8.2 reconciliation of extra week for fiscal 2021 measures (unaudited, in millions except per share data) the following tables reconcile the impact of the extra week for the fiscal fourth quarter and fiscal year ended october 3, 2021, to further enhance the comparability as we lap the 53rd week that was part of our fiscal 2021 results. reconciliation of revenues north america international channel development corporate and other consolidated revenue for the quarter ended october 3, 2021 as reported (gaap) - 14-weeks $ 5,763.0 $ 1,914.6 $ 438.3 $ 30.8 $ 8,146.7 impact of the extra week (427.3 ) (126.6 ) (20.5 ) (1.2 ) (575.6 ) revenue - 13-weeks $ 5,335.7 $ 1,788.0 $ 417.8 $ 29.6 $ 7,571.1 revenue for the quarter ended october 2, 2022 (gaap) - 13 weeks $ 6,134.4 $ 1,777.0 $ 483.7 $ 19.1 $ 8,414.2 change (%) 15 % (1 )% 16 % (35 )% 11 % revenue for the year ended october 3, 2021 as reported (gaap) - 53-weeks $ 20,447.9 $ 6,921.6 $ 1,593.6 $ 97.5 $ 29,060.6 impact of the extra week (427.3 ) (126.6 ) (20.5 ) (1.2 ) (575.6 ) revenue - 52-weeks $ 20,020.6 $ 6,795.0 $ 1,573.1 $ 96.3 $ 28,485.0 revenue for the year ended october 2, 2022 (gaap) - 52 weeks $ 23,370.8 $ 6,940.1 $ 1,843.6 $ 95.8 $ 32,250.3 change (%) 17 % 2 % 17 % (1 )% 13 % reconciliation of operating margin consolidated operating margin for the quarter ended october 3, 2021 as reported (gaap) - 14-weeks 18.2 % non-gaap impact 1.3 % non-gaap operating margin - 14-weeks 19.5 % impact of the extra week (0.6 )% non-gaap operating margin - 13-weeks 18.9 % operating margin for the year ended october 3, 2021 as reported (gaap) - 53-weeks 16.8 % non-gaap impact 1.2 % non-gaap operating margin - 53-weeks 18.0 % impact of the extra week (0.2 )% non-gaap operating margin - 52-weeks 17.8 % reconciliation of earnings per share oct 2, oct 3, % quarter ended 2022 2021 change gaap earnings per share - 14-weeks $ 1.49 non-gaap impact (0.50 ) non-gaap earnings per share - 14-weeks 0.99 impact of the extra week (0.10 ) non-gaap earnings per share - 13-weeks $ 0.81 $ 0.89 (9 )% oct 2, oct 3, % year ended 2022 2021 change gaap earnings per share - 53-weeks $ 3.54 non-gaap impact (0.34 ) non-gaap earnings per share - 53-weeks 3.20 impact of the extra week (0.10 ) non-gaap earnings per share - 52-weeks $ 2.96 $ 3.10 (5 )%
