Starbucks financial performance in fiscal 2019
Financial performance of Starbucks in FY 2019, q1 to q3
Table of Contents
Starbucks is the leading coffee brand of the world with 29,324 stores operational worldwide as of end fiscal 2018. By the end of third quarter of 2019, the number of Starbucks stores has grown to 30,626 all over the world. The company undertook some restructuring in recent years to achieve its ambitious growth plans in the China market. As a part of this plan, the company acquired all the licensed stores in East China. Now, the entire China business of Starbucks is being run through company operated stores only.
Moreover, the company operated stores account for the larger part of its revenue compared to the licensed stores. In 2018, the share of revenue which the company owned stores generated was 52% compared to 48% from licensed stores. Not just China, but in Japan too, the company's operations are run only through company owned stores. However, to optimize its mix of stores, in Taiwan market Starbucks licensed all its stores to its long time partners UPEC and PCSC. Long back, in 2011, the company had decided to fully license its HongKong and Makau market operations.
United States is the core market of Starbucks with entire Americas accounting for the largest part of its revenue of all geographic segments. To get faster growth, the company is focusing on its core and most profitable businesses. As a part of the restructuring, Starbucks sold off its Tazo brand and closed down Teavana stores apart from converting its Singapore, Taiwan and Brazil operations to licensed models. Net Revenue of Starbucks has continued to grow steadily over the last five years. The coffee brand has maintained its growth momentum in 2019 as well.
Total Net Revenue of Starbucks 2019:
($ amounts in millions)
| Net Revenue | 2019 | 2018 |
| q1 | $6,632.7 | $6,073.7 |
| q2 | $6,305.9 | $6,031.8 |
| q3 | $6,823.0 | $6,310.3 |
| h1 (q1 & q2) | $12,938.7 | $12,105.5 |
| 9 months ended (q1, q2 & q3) | $19,761.6 | $18,415.9 |
In both the quarters, the net revenue of Starbucks grew compared to the same period previous year. In the first quarter of 2019, the net revenue of Starbucks grew by 9.2% compared to the same period last year. Net Revenue reached $6.63 billion in q1, 2019 compared to $6.07 billion in q1, 2018.
In the second quarter too, the company experienced sound growth of $274.1 million or 4.5% against the same quarter last year. Net Revenue of Starbucks grew to $6.3 billion in the second quarter of 2019 compared to the same period last year.
In the third quarter of 2019, the company experienced 8.1% growth in its net revenue compared to the same period last year. Revenue grew to $6,823.0 million in q3, compared to $6,310.3 million during the same period last year.
In the first half of 2019, the company's net revenue was $12.94 billion as compared to $12.1 billion during the first two quarters of 2018; yoy growth of 6.9% or $833.2 million.
Nine months ended, fy 2019, the revenue of Starbucks has reached $19,761.6 million compared to $18,415.9 million in the same period of 2018.
Net Earnings of Starbucks 2019
($ amounts in millions)
| Net Earnings | 2019 | 2018 |
| q1 | $ 760.6 | $ 2,250.2 |
| q2 | $ 663.2 | $ 660.1 |
| q3 | $ 1,372.8 | $ 852.5 |
| h1 (q1 & q2) | $ 1,423.6 | $ 2,910.3 |
| 9 months ended | $ 2,796.4 | $ 3,762.8 |
Net earnings of Starbucks were $760.6 million in the first quarter of 2019 compared to $2,250.2 million in q1, 2018. While in the first quarter, net earnings fell compared to the previous year, in the second quarter net earnings remained flat. Net earnings were $663.2 million in q2, 2019, compared to $660.1 million in q2, 2018. During the third quarter however, net earnings grew by $520.3 million compared to q3, 2018. Net earnings of Starbucks in the third quarter of 2019 have reached $1,372.8 million against $852.5 million in the same quarter of 2018.
| EPS | 2019 | 2018 |
| q1 | $0.61 | $1.57 |
| q2 | $ 0.53 | $0.47 |
| q3 | $1.12 | $0.61 |
| h1 (q1&q2) | $1.14 | $2.05 |
| 9 months ended | $ 2.25 | $ 2.67 |
Revenue from company operated and licensed stores:
($ amounts in millions)
| Revenue company owned stores | 2019 | 2018 |
| q1 | $ 5,370.3 | $ 4,741.8 |
| q2 | $5,159.0 | $4,828.0 |
| q3 | $ 5,535.0 | $ 5,060.4 |
| h1 (q1+q2) | $ 10,529.3 | $ 9,569.8 |
| 9 months ended | $ 16,064.3 | $ 14,630.3 |
| Revenue licensed stores | 2019 | 2018 |
| q1 | $737.1 | $682.4 |
| q2 | $678.2 | $625.6 |
| q3 | $725.0 | $660.6 |
| h1 (q1+q2) | $1,415.3 | $1,308.0 |
| 9 months ended | $2,140.3 | $1,968.6 |
Net Revenue of Starbucks from company operated stores during the first quarter of 2019 was $5,370.3 million compared to $4,741.8 million during the same period of last year; year on year (yoy) growth of 13.3%.
Net Revenue of Starbucks from company owned stores during the second quarter of 2019 was $5,159 million compared to $4,828 million during the same period last year; yoy growth of 6.9% or $331 million.
In q3, 2019, net revenue from company owned stores grew to $5,535.0 million compared to $5,060.4 million in q3, 2018; yoy growth of 9.4%.
Net Revenue of Starbucks from company operated stores during the first half of 2019 was $10,529.3 million compared to $9,569.8 million during the same period last year; yoy growth of $959.5 million or 10%.
For the first three quarters of 2019, net revenue of the company from the company operaterd stores was $16 billion as compared to $14.6 billion during the same period in 2018.
Net Revenue of Starbucks from licensed stores during the first quarter of 2019 saw 8% growth as compared to the same period last year. Net revenue from licensed stores grew to $737.1 million in q1, 2019 as compared to $682.4 million during the same period last year.
Net Revenue of Starbucks from licensed stores during the second quarter of 2019 saw 8.4% growth as compared to the same period last year. Its net revenue from licensed stores grew to $678.2 million in Q2, 2019 as compared to $625.6 million during the same period last year; yoy growth of $52.6 million.
Net revenue of Starbucks from licensed stores during the third quarter of 2019 was $725 million as compared to $660 million in 2018 for the same period.
Net Revenue of Starbucks from licensed stores during the first half of 2019 grew 8.2% as compared to the same period last year. During the first half of 2019, the net revenue of Starbucks was $1,415.3 million as compared to $1,308 million during the same period last year; yoy growth of $107.3 million.
Total net revenue of Starbucks during the first three quarters from licensed stores was $1.4 billion in 2019 as compared to $1.3 billion in 2018 during the same period.
Starbucks Revenue from Each Reportable Segment :
($ amounts in millions)
| Operating segments | 2019 (q1) | 2018 (q1) | 2019 (q2) | 2018 (q2) | 2019 (q3) | 2018 (q3) |
| Americas | $4,606.0 | $4,257.6 | $4,305.9 | $3,996.3 | $4,671.8 | $4,224.0 |
| CAP | $1,227.3 | $843.7 | $1,289.1 | $1,186.4 | $1,336.9 | $1,229.0 |
| EMEA | $266.3 | $268.1 | $227.5 | $251.0 | $231.7 | $261.7 |
| Channel Development | $504.6 | $628.0 | $446.6 | $562.6 | $533.3 | $567.4 |
| Corporate & Other | $28.5 | $76.3 | $36.8 | $35.5 | $49.3 | $28.2 |
| Total | $6,632.7 | $6,073.7 | $6,305.9 | $6,031.8 | $6,823.0 | $6,310.3 |
The business of Starbucks is divided into three main geographical segments including 1. the Americas, 2. China/Asia Pacific and 3. Europe, Middle East & Africa. Other reportable segments include 'Channel Development' and 'Corporate & Other'.
Americas are the largest geographic segment of Starbucks based upon revenue and number of stores. The company generated $4,606 million in the first quarter of 2019 from the Americas as compared to $4,257.6 million during the same period last year. In the second quarter of 2019, the net revenue of Starbucks from the Americas segment totalled $4,305.9 million as compared to $3,996.3 million during the second quarter of fy 2018. In the third quarter of 2019, net revenue from Americas grew to $4,671.8 million compared to $4,224 million in the same quarter of 2018.
China/Asia Pacific is the second largest geographic segment of Starbucks. Net revenue from CAP in q1, 2019 was $1,227.3 million compared to $843.7 million in the first quarter of fiscal 2018. In the second quarter of 2019, the net revenue of Starbucks from the CAP segment was $1,289.1 million compared to $1,186.4 million during the same period of previous year. In the third quarter of 2019, revenue from CAP was $1,336.9 million against $1,229 million in 2018.
Total net revenue of Starbucks from EMEA (Europe, Middle East & Africa) declined slightly in the first quarter of 2019 compared to the same period last year. Net revenue of Starbucks from EMEA declined to $266.3 million during q1, 2019 as compared to $268.1 million in the same quarter of 2018. In the second quarter of 2019 however, Starbucks net revenue from EMEA declined by around $23.5 million compared to the same period last year. EMEA net revenue of Starbucks was $227.5 million in q2, 2019 as compared to $251 million during the second quarter of 2018. Again in the third quarter of 2019, revenue from EMEA was $231.7 million against $261.7 million in the same quarter of 2018.
Product-Segment Revenues of Starbucks :-
Revenue from beverages quarters 1 & 2 fiscal 2019.
($ amounts in millions)
| Beverages | 2019 | 2018 |
| q1 | $ 3,926.0 | $ 3,418.0 |
| q2 | $ 3,760.4 | $ 3,519.8 |
Beverages are the largest source of revenue of all products Starbucks sells. During the first quarter of 2019, the company earned $3,926 million from beverages. This was 59% of the brand's entire revenue for the first quarter of 2019. During the same period last year (first quarter of 2018), the company earned $3,418 million in revenue from selling beverages which was 56% of the brand's total revenue for that quarter.
Starbucks revenue from beverages during the q2, fiscal 2019 was $3,760.4 million or 60% of the entire revenue for the quarter. Revenue from beverages has grown during both the quarters in 2019 as compared to the last year. In the second quarter of 2018, net revenue from beverages was $3,519.8 million. Compared to that, Starbucks earned $241.6 million higher in revenue in q2 of fiscal 2019.
During the first half of fiscal 2019, Starbucks total net revenue from beverages was $7,688.3. This was 60% of the total revenue that the brand earned in the first half of the fiscal year. Compared to that, Starbucks revenue from beverages was only 57% of its total net revenue for H1 (first half) of fiscal 2018. Beverages provided Starbucks $6,933.8 million in revenue in the first half (H1) of fiscal 2018. Starbucks enjoyed net growth of $754.5 million in revenue from beverages in H1, fiscal 2019 compared to the same period last year.
Starbucks Revenue from Food Products q1 & q2 2019 :-
($ amounts in millions)
| Food | 2019 | 2018 |
| q1 | $1,188.9 | $1,043.7 |
| q2 | $1,157.9 | $1,067.1 |
Revenue from food products in the first quarter of 2019 was $1188.9 million or 18% of the net revenue for the quarter. This was $145.2 million higher than the same quarter, previous year. In the first quarter of 2018, net revenue of Starbucks from food products was $1,043.7 million.
Net revenue of Starbucks during the second quarter of 2019 from food products was $1,157.9 million or 18% of the net revenue for the quarter. Compared to that, the revenue of Starbucks from food products during the second quarter of previous year was $90.8 million lower. In q2, 2018; Starbucks had generated $1,067.1 million from food products whch was 18% of its net revenue for the quarter.
Total net revenue that Starbucks generated from food products during the first two quarters of 2019 or first half of the fiscal was $2,344.3 million or 18% of the net revenue that the company generated during the entire period. Revenue from food products in the first half of fiscal 2019 was around $228.9 million higher compared to the same period previous year. During the first two quarters of fiscal 2018, the company generated $2,115.4 million from food products which was 17% of its total net revenue during the period.
Starbucks Revenue from Others (royalty, licensing, packaged beverages etc) q1, q2 2019 :-
($ amounts in millions)
| Others | 2019 | 2018 |
| q1 | $1,517.8 | $1,612.0 |
| q2 | $1,387.6 | $1,444.9 |
Starbucks revenue from other sources mainly includes the revenue company generates from licensing, royalty, packaged and single-serve coffees and teas, beverage-related ingredients, serveware, and ready-to-drink beverages as well as a few other sources.
Revenue of Starbucks from 'Others' declined during both the quarters of 2019. During the first quarter of 2019, the revenue of Starbucks from 'Others' was $1,517.8 million or 23% of the net revenue for the quarter. This was $94.2 million lower compared to the same period last year. In q1 2018, Starbucks revenue from 'Others' was $1,612 million or 27% of the revenue.
Revenue of Starbucks from 'Others' during the second quarter of 2019 was $1,387.6 million or 22% of the net revenues for the quarter. Previous year, during the same quarter revenue from 'Others' was $1,444.9 million or 24% of the net revenue for the quarter.
Total net revenue for the first half of 2019 was $2,906.1 million or just 22% of the net revenue for the entire period. This was 150.2 million lower compared to the net revenue from 'Others' during the first half of 2018 when the company earned $3,056.3 million from this product segment or 26% of the total net revenue for the period.