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Starbucks Reports Q4 Results; Shares Rally (SBUX)

Washington-based largest coffeehouse company in the world, Starbucks Corp. (NASDAQ: SBUX) reported results for the fourth quarter ended Sep 30, 2012.

Q4 2012 Highlights: SBUX’s revenues increased by 11% to $3,364.2 million from that of $3,031.9 million reported in the same period in the previous year. Operating income for the quarter increased drastically by 15.9% to $519.6 million from that of $448.3 million reported in the same period in the previous year. Net income rose 0.1% to $359 million from $358.5 million.

The increase in fourth-quarter revenues was primarily due to 6% increase in global comparable store sales including 7% growth in the Americas Segment. The company saw a 32% increase in revenues from Channel Development and 14% increase in revenues from licensed stores.

Increased sales leverage led to increase in operating margin to 15.4% this quarter from 14.8% prior year. In spite of 16% increase in operating income, Net Income increased only by 0.1%. This was primarily due to drastic 60% decrease in interest income and increase in effective tax rate from 28.9% to 33.4%.

SBUX’s Board also declared cash dividend of $0.21 per share compared to $0.17 per share in Q4 2011.

Fiscal 2012 Highlights: Annual revenues increased by 13.7% to $13,299.5 million from that of $11,700.4 million reported for the previous year. Operating income increased by 15.6% to $1,997.4 million from that of $1,728.5 million. Net income also increased by 11% to $1,383.8 million from $1,245.7 million reported in the previous year. Net cash from operations for the year 2012 were $1,719.5 million.

SBUX opened over 1,063 new stores across the world this year compared to 145 stores last year. Its global comparable store sales grew by 7% including 8% growth in Americas and 15% growth in China and Asia Pacific segment. The increased fiscal revenues also reflect 50% revenue growth in Channel Development and 20% growth in licensed stores revenue.

Its operating margin increased to 15% from 14.8% reported in the prior year. The increase in operating expenses was offset by the increase in income from equity investees. Net income increased by 11.1%; this was primarily due to decrease in interest income and increase in effective tax rate from 31.1% to 32.8%.

As on Sep 30, 2012, SBUX had total assets of $8,219.2 million including cash and its equivalents worth $1,188.6 million. Total liabilities were $3,104.7 million, among which 71% were current and the remaining was long term. Total Stockholders’ equity was $5,114.5 million.

At the last check, SBUX shares were trading 11% higher at $51.75, with volume up from its daily average of 9.2 million to 17.6 million.



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