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 Starbucks Reports Record Holiday and Record Q1 FY17 Results
   Thursday, January 26, 2017 4:03:00 PM ET

--Consolidated Net Revenues Rise 7% to Record $5.7 Billion; Operating Margin Expands to Q1 Record 19.8%

--GAAP EPS Up 11% to $0.51; Non-GAAP EPS Up 13% to $0.52

--Card Loads in U.S./Canada Jump 15% to Record $2.1 Billion; Active U.S. Rewards Membership Up 16% to 12.9 Million

--Company Reaffirms Outlook for Fiscal 2017

Starbucks Corporation (SBUX ) today reported financial results for its 13-week fiscal first quarter ended January 1, 2017. Fiscal 2017 and fiscal 2016 GAAP results include items which 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.

Q1 Fiscal 2017 Highlights:

-- Global comparable store sales increased 3% comprised of a 3% increase in the Americas, a 5% increase in CAP, and a 1% decrease in EMEA -- U.S. comparable store sales increased 3% comprised of a 5% increase in average ticket and a 2% decrease in transactions. Adjusting for the estimated impact of order consolidation related to the new Starbucks Rewards(TM) loyalty program, average ticket grew 3% with transactions flat to prior year.

-- Record consolidated net revenues of $5.7 billion grew 7% over prior year

-- Record Q1 consolidated operating income increased 7% to $1.1 billion

-- Record Q1 consolidated operating margin expanded 10 basis points to 19.8%

-- GAAP EPS of $0.51 increased 11% over Q1 FY16

-- Non-GAAP EPS of $0.52 increased 13% over Q1 FY16 non-GAAP results

-- Record $2.1 billion loaded on Starbucks Cards in the U.S. and Canada in Q1, up 15% year-over-year; Starbucks Card transactions reached 40% of U.S. company-operated transactions

-- Active membership in Starbucks Rewards grew 16% year-over-year to 12.9 million members in the U.S.

-- Mobile Order and Pay represented 7% of U.S. company-operated transactions in the quarter, up from 3% in the prior year; Mobile Payment reached 27% of U.S. company-operated transactions

-- The company opened 649 net new stores in the quarter, bringing total stores to 25,734 in 75 countries worldwide

"Starbucks is engaging more deeply - and more frequently - and expanding its base of loyal customers faster and more consistently today than ever before," said Howard Schultz, chairman and ceo. "The trust and confidence our customers have in the Starbucks brand is fueling our flywheel and propelling our business forward in markets and channels all around the world."

"We are pleased with the record Q1 financial and operating results we announced today, particularly given that the results were delivered in the face of a challenging environment for restaurant retailers overall," said Scott Maw, cfo. "As always, credit for our success belongs to the more than 300,000 Starbucks partners around the world who proudly wear the green apron and who deliver an elevated Starbucks Experience to our customers now over 90 million times, each week."

                                   
First Quarter Fiscal 2017 Summary
---------------------------------
                                                        
                                                       -----------------------------------------------------------------------------------------------
                                                                                          Quarter Ended Jan 1, 2017
Comparable Store Sales(1)           Sales Growth   Change in Transactions   Change in Ticket
--------------------------------- -------------------- ------------ -------------------- ---------------------- -------------------- ----------------
Consolidated                                                3%                 (1)%                   4%
Americas                                                    3%                                    (2)%                                      5%
CAP                                                         5%                                     2%                                       3%
EMEA                                    (1)%                (2)%                   1%
--------------------------------- -------------------- ------------ -------------------- ---------------------- -------------------- ----------------
 
(1)   Includes only Starbucks company-operated stores open 13 months or
                         longer. Comparable store sales exclude the effect of fluctuations in
                         foreign currency exchange rates.
                          
                                                                          
                                                               ------------------------------------------------------------------ --------------------
Operating Results                                                               Quarter Ended                         Change
($ in millions, except per share amounts)    Jan 1, 2017  Dec 27, 2015  
----------------------------------------- -------------------- ----------- -------------------- ------------ -------------------- --------------------
Net New Stores                                                      649           528                                   121
Revenues                                                         $5,732.9                         $5,373.5                                 7%
Operating Income                                                 $1,132.6                         $1,058.0                                 7%
Operating Margin                                                   19.8%                            19.7%                                10 bps
EPS                                             $0.51         $0.46               11%
----------------------------------------- -------------------- ----------- -------------------- ------------ -------------------- --------------------
                                                                                                                                   

Consolidated net revenues were $5.7 billion in Q1 FY17, an increase of 7% over Q1 FY16. The increase was primarily driven by incremental revenues from the opening of 2,163 net new stores over the past 12 months and 3% growth in global comparable store sales.

Consolidated operating income grew 7% to $1,132.6 million in Q1 FY17, up from $1,058.0 million in Q1 FY16. Consolidated operating margin expanded 10 basis points to 19.8% primarily due to sales leverage and lower commodity costs, mainly coffee. The increase was partially offset by higher investments in our store partners (employees), primarily in the Americas segment.

                                                                           
Q1 Americas Segment Results
---------------------------
                                                          
                                                 -------------------- -------------------- -------------------- -------------------- --------------------
                                                                          Quarter Ended                                                     Change
($ in millions)                    Jan 1, 2017           Dec 27, 2015      
--------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Net New Stores                                            251                                       171                                       80
Revenues                                               $3,991.4                                  $3,726.2                                     7%
Operating Income                                        $958.5                                    $934.6                                      3%
Operating Margin                      24.0%                  25.1%                (110) bps
--------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                      

Net revenues for the Americas segment were $4.0 billion in Q1 FY17, an increase of 7% over Q1 FY16. The increase was driven by incremental revenues from 884 net new store openings over the past 12 months and 3% growth in comparable store sales.

Operating income of $958.5 million in Q1 FY17 grew 3% versus $934.6 million in Q1 FY16. Operating margin of 24.0% declined 110 basis points primarily due to higher investments in our store partners (employees), partially offset by sales leverage.

                                                                                     
Q1 China/Asia Pacific Segment Results
-------------------------------------
                                                                    
                                                           -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                    Quarter Ended                                                     Change
($ in millions)                              Jan 1, 2017           Dec 27, 2015      
------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Net New Stores                                                      303                                       281                                       22
Revenues                                                          $770.8                                    $653.6                                      18%
Operating Income                                                  $163.4                                    $127.1                                      29%
Operating Margin                                21.2%                  19.4%                 180 bps
------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                                

Net revenues for the China/Asia Pacific segment grew 18% over Q1 FY16 to $770.8 million in Q1 FY17. The increase was primarily driven by incremental revenues from 1,003 net new store openings over the past 12 months, 5% growth in comparable store sales, and favorable foreign currency translation.

Q1 FY17 operating income of $163.4 million grew 29% over Q1 FY16 operating income of $127.1 million. Operating margin expanded 180 basis points to 21.2% primarily due to changes in certain business tax structures in China and higher income from our joint venture operations, partially offset by the impact of foreign currency translation.

                                                                       
Q1 EMEA Segment Results
-----------------------
                                                      
                                             -------------------- -------------------- -------------------- -------------------- --------------------
                                                                      Quarter Ended                                                     Change
($ in millions)                Jan 1, 2017           Dec 27, 2015      
----------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Net New Stores                                        95                                        79                                        16
Revenues                                            $262.4                                    $313.0                                     (16)%
Operating Income                                     $44.1                                     $48.1                                     (8)%
Operating Margin                  16.8%                  15.4%                 140 bps
----------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                  

Net revenues for the EMEA segment were $262.4 million in Q1 FY17, a 16% decrease versus Q1 FY16. The decrease was primarily driven by the shift to more licensed stores in the region, including the absence of revenue related to the sale of our Germany retail operations in Q3 FY16, as well as unfavorable foreign currency translation. Partially offsetting the decrease were incremental revenues from the opening of 489 net new licensed stores over the past 12 months.

Operating income decreased 8% to $44.1 million in Q1 FY17, down from $48.1 million in Q1 FY16. Operating margin expanded 140 basis points to 16.8% primarily due to sales leverage driven by the shift in the portfolio towards more licensed stores. Partially offsetting the margin expansion was unfavorable foreign currency exchange and sales deleverage in certain company-operated stores.

                                                                                      
Q1 Channel Development Segment Results
--------------------------------------
                                                                     
                                                            -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                     Quarter Ended                                                     Change
($ in millions)                               Jan 1, 2017           Dec 27, 2015      
-------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Revenues                                                           $553.7                                    $512.1                                      8%
Operating Income                                                   $242.9                                    $193.3                                      26%
Operating Margin                                 43.9%                  37.7%                 620 bps
-------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                                 

Net revenues for the Channel Development segment grew 8% over Q1 FY16 to $553.7 million in Q1 FY17, primarily driven by increased sales of premium single-serve and packaged coffee products. Increased international and foodservice sales also contributed.

Operating income of $242.9 million in Q1 FY17 increased 26% compared to Q1 FY16. Operating margin expanded 620 basis points to 43.9%, primarily driven by lower coffee costs, higher income from the North American Coffee Partnership, and leverage on cost of sales and other operating expenses.

                                                                             
Q1 All Other Segments Results
-----------------------------
                                                            
                                                   -------------------- -------------------- -------------------- -------------------- --------------------
                                                                            Quarter Ended                                                     Change
($ in millions)                      Jan 1, 2017           Dec 27, 2015      
----------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Net New Stores                                        --                                  (3)                                        3
Revenues                                                  $154.6                                    $168.6                                     (8)%
Operating Income                        $9.6                   $5.9                    63%
----------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                                                                                                        

Fiscal 2017 Targets

The company reiterates the following full year FY17 targets, except where noted. Year over year growth is based on prior year 52-week non-GAAP results. Please refer to the reconciliation of GAAP measures to non-GAAP measures at the end of this release.

-- Continue to expect approximately 2,100 net new stores globally

-- Continue to expect mid-single digit comparable store sales growth globally

-- Consolidated revenue growth now expected to be in the range of 8% to 10%

-- Continue to expect GAAP EPS in the range of $2.09 to $2.11 and non-GAAP EPS in the range of $2.12 to $2.14

The company will continue its practice of providing detail regarding its business outlook during its regularly scheduled quarterly earnings conference calls, including select quarterly and segment information. The company’s earnings press release will contain select full year consolidated targets only, as outlined above.

Company Updates

-- In December, Starbucks announced that Kevin Johnson, president and chief operating officer and a 7-year member of the Starbucks Board of Directors, will expand his responsibilities and assume the role of president and chief executive officer, effective April 3, 2017. Simultaneously, Howard Schultz, chairman and ceo, will become executive chairman and will continue to serve as chairman of Starbucks Board of Directors.

-- The company announced the nominations of Rosalind Brewer, President and Chief Executive Officer of Sam’s Club; Jorgen Vig Knudstorp, Executive Chairman of the LEGO Brand Group; and Satya Nadella, Chief Executive Officer of Microsoft Corporation, for election to the Starbucks Board of Directors at the 2017 Annual Meeting of Shareholders. Additionally, Starbucks board member James G. Shennan, Jr. will retire following 27 years of service effective immediately prior to the Annual Meeting pursuant to the Company’s Corporate Governance Principles and Practices’ mandatory retirement age requirements.

-- The company hosted its biennial Investor Day in NYC on December 7, 2016 where company leaders shared a number of initiatives in support of its 5-year strategic plan. Highlights included: -- The addition of approximately 12,000 net new stores globally by fiscal 2021, bringing total stores to an estimated 37,000

-- Roasteries and Starbucks Reserve stores to elevate the Starbucks brand and customer experience

-- Digital innovation to further accelerate momentum of the company’s digital flywheel and mobile ecosystem, including an innovative conversation ordering system, called My Starbucks Barista, powered by groundbreaking Artificial Intelligence for the Starbucks mobile app, and a new social gifting and mobile payment platform in China through WeChat.

-- The China/Asia Pacific segment now has three markets with over 1,000 total stores, with Starbucks China surpassing 2,500 stores in the quarter, the South Korea market celebrating its 1,000th store opening, and Starbucks Japan reaching 1,245 stores.

-- The company repurchased 7.6 million shares of common stock in Q1 FY17; 110 million shares remain available for purchase under current authorizations.

-- The Board of Directors declared a cash dividend of $0.25 per share, payable on February 24, 2017 to shareholders of record as February 9, 2017.

Conference Call

Starbucks will hold a conference call today at 2:00 p.m. Pacific Time, which will be hosted by Howard Schultz, chairman and ceo; Kevin Johnson, president and coo; and Scott Maw, cfo. 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 Saturday, February 25, 2017.

About Starbucks

Since 1971, Starbucks Coffee Company has been committed to ethically sourcing and roasting high-quality arabica coffee. Today, with stores around the globe, 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 news.starbucks.com or www.starbucks.com.

Forward-Looking Statements

This release contains forward-looking statements relating to certain company initiatives, strategies and plans, as well as trends in or expectations regarding our diversified business model, the strength, resilience and potential of our business, operations and brand, our customer base, our innovation, growth and growth opportunities and related investments, our Starbucks Reserve(R) Roasteries and Starbucks Reserve(R) stores, return to shareholders, our strategic, operational and digital moves, our outlook for fiscal 2017, our long term financial targets, earnings per share, revenues, operating margins, capital expenditures, tax rate, anticipated costs related to the integration of Starbucks Japan, comparable store sales and transactions, and net new stores. These forward-looking statements are based on currently available operating, financial and competitive information and are subject to a number of significant risks and uncertainties. Actual future results may differ materially depending on a variety of factors including, but not limited to, fluctuations in U.S. and international economies and currencies, our ability to preserve, grow and leverage our brands, potential negative effects of incidents involving food or beverage-borne illnesses, tampering, 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, including the integration of Starbucks Japan, the acceptance of the company’s products by our customers, the impact of competition, coffee, dairy and other raw materials prices and availability, the effect of legal proceedings, and other risks detailed in the company filings with the Securities and Exchange Commission, including the "Risk Factors" section of Starbucks Annual Report on Form 10-K for the fiscal year ended October 2, 2016. The company assumes no obligation to update any of these forward-looking statements.

                                                                                                                                                                                            
                                                                                                                                                      STARBUCKS CORPORATION
                                                                                                                                               CONSOLIDATED STATEMENTS OF EARNINGS
                                                                                                                                         (unaudited, in millions, except per share data)
                                                                                                                                                                                                                                                                                                            
                                                                                                                                             Quarter Ended                                                                                                                 Quarter Ended
                                                                                        ----------------------------------------------------------------------------------------------------------------------                     ---------------------------------------------------------------------------------------------
                                                                                           Jan 1,                             Dec 27,                            %                               Jan 1,                                Dec 27,
                                                                                            2017                                                  2015                                              Change                              2017                                                     2015
                                                                                  
                                                                   -------------------- ----------  -------------------- -------------------- ----------                       -------------------- ------                         --------------                      -------------------- --------------
                                                                                                                                                                                                                                    As a % of total
                                                                                                                                                                                                                                                                           net revenues
                                                                                                                                                                                                                                   ----------------------------------------------------------------------------------------
Net revenues:                                                                                                                                                                                                                                                           
  Company-operated stores                                                                 $ 4,469.3                                             $ 4,210.6                                              6.1  %                                78.0                    %                                78.4                    %
  Licensed stores                                                                             602.4                                                 540.6                                             11.4                                   10.5                                                     10.1
  CPG, foodservice and other                                                                  661.2                              622.3                           6.3                                   11.5                                  11.6  
                                                                                        --------------------------------                      --------------------------------                                                     -------------- --------------------                      -------------- --------------------
Total net revenues                                                                          5,732.9                                               5,373.5                                              6.7                                  100.0                                                    100.0
Cost of sales including occupancy costs                                                     2,295.0                                               2,186.2                                              5.0                                   40.0                                                     40.7
Store operating expenses                                                                    1,638.2                                               1,506.2                                              8.8                                   28.6                                                     28.0
Other operating expenses                                                                      145.4                                                 146.2                                             (0.5 )                                  2.5                                                      2.7
Depreciation and amortization expenses                                                        249.7                                                 235.5                                              6.0                                    4.4                                                      4.4
General and administrative expenses                                                           356.4                              305.5                          16.7                                    6.2                                   5.7  
                                                                                        --------------------------------                      --------------------------------                                                     -------------- --------------------                      -------------- --------------------
  Total operating expenses                                                                  4,684.7                                               4,379.6                                              7.0                                   81.7                                                     81.5
Income from equity investees                                                                   84.4                               64.1                          31.7                                    1.5                                   1.2  
                                                                                        --------------------------------                      --------------------------------                                                     -------------- --------------------                      -------------- --------------------
  Operating income                                                                          1,132.6                                               1,058.0                                              7.1                                   19.8                                                     19.7
Interest income and other, net                                                                 24.1                                                   8.1                                            197.5                                    0.4                                                      0.2
Interest expense                                                                              (23.8 )                                               (16.5 )                                           44.2                                   (0.4 )                                                   (0.3 )
                                                                                        --------------------------------                      --------------------------------                                                     -------------- --------------------                      -------------- --------------------
  Earnings before income taxes                                                              1,132.9                                               1,049.6                                              7.9                                   19.8                                                     19.5
Income tax expense                                                                            381.4                              361.9                           5.4                                    6.7                                   6.7  
                                                                                        --------------------------------                      --------------------------------                                                     -------------- --------------------                      -------------- --------------------
Net earnings including noncontrolling interests                                               751.5                                                 687.7                                              9.3                                   13.1                                                     12.8
Net earnings/(loss) attributable to noncontrolling interests                                   (0.3 )                                                 0.1                            nm                         --                        --  
                                                                                        --------------------------------                      --------------------------------                                                     -------------- --------------------                      -------------- --------------------
Net earnings attributable to Starbucks                                                    $   751.8                          $   687.6                           9.3                                   13.1                    %                                12.8                    %
                                                                                        === ======= ====================                      === ======= ====================
                                                                                                                                                                                                                                                                                                            
Net earnings per common share - diluted                                                   $    0.51                          $    0.46                          10.9  %
                                                                                        === ======= ====================                      === ======= ====================
Weighted avg. shares outstanding - diluted                                                  1,470.5                                               1,503.3
                                                                                                                                                                                                                                                                                                            
Cash dividends declared per share                                                         $    0.25                                             $    0.20
                                                                                                                                                                                                                                                                                                            
Supplemental Ratios:
Store operating expenses as a percentage of company-operated store                                                                                                                                                                           36.7                    %                                35.8                    %
revenues
Effective tax rate including noncontrolling interests                                                                                                                                                                                        33.7                    %                                34.5                    %
                                                                                                                                                                                                                                                                                                            
 
Segment Results (in millions)
-----------------------------
 
Americas
 
                                                                        Jan 1,          Dec 27,         %       Jan 1,                         Dec 27,
                                                                                            2017                                                  2015                                              Change                         2017                                              2015
                                                                                  
                                                                   -------------------- ----------  -------------------- -------------------- ----------                       -------------------- ------                        ------                      -------------------- -------
Quarter Ended                                                                                                                                                                                                             As a % of Americas
                                                                                                                                                                                                                                                                total net revenues
------------------------------------------------------------------                                                                                                                                                                -------------------------------------------------------------------------
Net revenues:                                                                                                                                                                                                                                                  
  Company-operated stores                                                                 $ 3,561.0                                             $ 3,330.7                                              6.9 %                        89.2                    %                         89.4                    %
  Licensed stores                                                                             421.3                                                 387.6                                              8.7                          10.6                                              10.4
  Foodservice and other                                                                         9.1                                7.9                          15.2                           0.2                            0.2  
                                                                                        --------------------------------                      --------------------------------                                                    ------ --------------------                      ------- --------------------
Total net revenues                                                                          3,991.4                                               3,726.2                                              7.1                         100.0                                             100.0
Cost of sales including occupancy costs                                                     1,440.3                                               1,346.9                                              6.9                          36.1                                              36.1
Store operating expenses                                                                    1,356.3                                               1,226.8                                             10.6                          34.0                                              32.9
Other operating expenses                                                                       31.9                                                  32.6                                             (2.1 )                         0.8                                               0.9
Depreciation and amortization expenses                                                        152.4                                                 140.8                                              8.2                           3.8                                               3.8
General and administrative expenses                                                            52.0                               44.5                          16.9                           1.3                            1.2  
                                                                                        --------------------------------                      --------------------------------                                                    ------ --------------------                      ------- --------------------
  Total operating expenses                                                                  3,032.9                            2,791.6                           8.6                          76.0                           74.9  
                                                                                        --------------------------------                      --------------------------------                                                    ------ --------------------                      ------- --------------------
  Operating income                                                                        $   958.5                          $   934.6                           2.6 %                        24.0                    %                         25.1                    %
                                                                                        === ======= ====================                      === ======= ====================                                                    ====== ====================                      ======= ====================
Supplemental Ratios:
Store operating expenses as a percentage of company-operated store                                                                                                                                                                  38.1                    %                         36.8                    %
revenues
                                                                                                                                                                                                                                                                                            
 
China/Asia Pacific (CAP)
 
                                                                       Jan 1,        Dec 27,            %           Jan 1,                         Dec 27,
                                                                                           2017                                                2015                                                 Change                             2017                                              2015
                                                                                
                                                                   -------------------- --------  -------------------- -------------------- --------                       -------------------- --------------                        ------                      -------------------- -------
Quarter Ended                                                                                                                                                                                                                    As a % of CAP
                                                                                                                                                                                                                                                                    total net revenues
------------------------------------------------------------------                                                                                                                                                                    -------------------------------------------------------------------------
Net revenues:                                                                                                                                                                                                                                                      
  Company-operated stores                                                                 $ 691.5                                             $ 580.1                                                     19.2 %                        89.7                    %                         88.8                    %
  Licensed stores                                                                            78.0                                                72.2                                                      8.0                          10.1                                              11.0
  Foodservice and other                                                                       1.3                              1.3                        --                           0.2                            0.2  
                                                                                        ------------------------------                      ------------------------------                                                            ------ --------------------                      ------- --------------------
Total net revenues                                                                          770.8                                               653.6                                                     17.9                         100.0                                             100.0
Cost of sales including occupancy costs                                                     337.3                                               295.0                                                     14.3                          43.8                                              45.1
Store operating expenses                                                                    204.3                                               175.3                                                     16.5                          26.5                                              26.8
Other operating expenses                                                                     19.1                                                14.8                                                     29.1                           2.5                                               2.3
Depreciation and amortization expenses                                                       48.6                                                42.1                                                     15.4                           6.3                                               6.4
General and administrative expenses                                                          40.6                             30.5                                  33.1                           5.3                            4.7  
                                                                                        ------------------------------                      ------------------------------                                                            ------ --------------------                      ------- --------------------
  Total operating expenses                                                                  649.9                                               557.7                                                     16.5                          84.3                                              85.3
Income from equity investees                                                                 42.5                             31.2                                  36.2                           5.5                            4.8  
                                                                                        ------------------------------                      ------------------------------                                                            ------ --------------------                      ------- --------------------
  Operating income                                                                        $ 163.4                          $ 127.1                                  28.6 %                        21.2                    %                         19.4                    %
                                                                                        === ===== ====================                      === ===== ====================                                                            ====== ====================                      ======= ====================
Supplemental Ratios:
Store operating expenses as a percentage of company-operated store                                                                                                                                                                      29.5                    %                         30.2                    %
revenues
                                                                                                                                                                                                                                                                                                
 
EMEA
 
                                                                          Jan 1,           Dec 27,        %            Jan 1,                            Dec 27,
                                                                                              2017                                                   2015                                             Change                              2017                                                   2015
                                                                                      
                                                                   -------------------- --------------  -------------------- -------------------- --------                       -------------------- ------                         --------------                      -------------------- -------
Quarter Ended                                                                                                                                                                                                                      As a % of EMEA
                                                                                                                                                                                                                                                                       total net revenues
------------------------------------------------------------------                                                                                                                                                                   ---------------------------------------------------------------------------------
Net revenues:                                                                                                                                                                                                                                                             
  Company-operated stores                                                                     $   145.9                                             $ 218.9                                            (33.3 )%                                55.6                    %                         69.9                    %
  Licensed stores                                                                                 102.2                                                79.7                                             28.2                                   38.9                                              25.5
  Foodservice                                                                                      14.3                             14.4                          (0.7 )                                  5.4                            4.6  
                                                                                        ------------------------------------                      ------------------------------                                                     -------------- --------------------                      ------- --------------------
Total net revenues                                                                                262.4                                               313.0                                            (16.2 )                                100.0                                             100.0
Cost of sales including occupancy costs                                                           136.1                                               151.4                                            (10.1 )                                 51.9                                              48.4
Store operating expenses                                                                           46.9                                                73.9                                            (36.5 )                                 17.9                                              23.6
Other operating expenses                                                                           16.0                                                14.8                                              8.1                                    6.1                                               4.7
Depreciation and amortization expenses                                                              7.6                                                11.5                                            (33.9 )                                  2.9                                               3.7
General and administrative expenses                                                                11.7                             14.5                         (19.3 )                                  4.5                            4.6  
                                                                                        ------------------------------------                      ------------------------------                                                     -------------- --------------------                      ------- --------------------
  Total operating expenses                                                                        218.3                                               266.1                                            (18.0 )                                 83.2                                              85.0
Income from equity investees                                                             --                              1.2                        (100.0 )                       --                            0.4  
                                                                                        ------------------------------------                      ------------------------------                                                     -------------- --------------------                      ------- --------------------
  Operating income                                                                            $    44.1                          $  48.1                          (8.3 )%                                16.8                    %                         15.4                    %
                                                                                        ======= ======= ====================                      === ===== ====================                                                     ============== ====================                      ======= ====================
Supplemental Ratios:
Store operating expenses as a percentage of company-operated store                                                                                                                                                                             32.1                    %                         33.8                    %
revenues
                                                                                                                                                                                                                                                                                                       
 
Channel Development
 
                                                     Jan 1,                          Dec 27,                  %                Jan 1,                       Dec 27,
                                                                         2017                                               2015                                    Change                                  2017                                            2015
                                                            ---------------------------   -------------------- ---------------------------   -------------------- --------                       -------------------------  -------------------- -------------------------
Quarter Ended                                                                                                                                                                               As a % of
                                                                                                                                                                                                                             Channel Development
                                                                                                                                                                                                                                    total
                                                                                                                                                                                                                                net revenues
--------------------------------------                                                                                                                                                           ----------------------------------------------------------------------
Net revenues:                                                                                                                                                                                                                
  CPG                                                        $ 437.1                                            $ 399.2                                             9.5   %                       78.9                    %                       78.0                    %
  Foodservice                                                  116.6                           112.9                          3.3                           21.1                         22.0  
                                                            -----------------------------                      -----------------------------                                                     ----- --------------------                      ----- --------------------
Total net revenues                                             553.7                                              512.1                                             8.1                          100.0                                           100.0
Cost of sales                                                  288.5                                              285.4                                             1.1                           52.1                                            55.7
Other operating expenses                                        60.4                                               60.3                                             0.2                           10.9                                            11.8
Depreciation and amortization expenses                           0.6                                                0.7                                           (14.3 )                          0.1                                             0.1
General and administrative expenses                              3.2                             4.1                        (22.0 )                          0.6                          0.8  
                                                            -----------------------------                      -----------------------------                                                     ----- --------------------                      ----- --------------------
  Total operating expenses                                     352.7                                              350.5                                             0.6                           63.7                                            68.4
Income from equity investees                                    41.9                            31.7                         32.2                            7.6                          6.2  
                                                            -----------------------------                      -----------------------------                                                     ----- --------------------                      ----- --------------------
  Operating income                                           $ 242.9                         $ 193.3                         25.7   %                       43.9                    %                       37.7                    %
                                                            == ===== ====================                      == ===== ====================                                                     ===== ====================                      ===== ====================
                                                                                                                                                                                                                                                        
 
All Other Segments
 
                                                     Jan 1,                         Dec 27,                          %
                                                                         2017                                              2015                                            Change
                                                             --------------------------                        --------------------------                        -------------------------
Quarter Ended
---------------------------------------
Net revenues:
  Company-operated stores                                     $ 70.9                                            $ 80.9                                           (12.4                   )%
  Licensed stores                                                0.9                                               1.1                                           (18.2 )
  CPG, foodservice and other                                    82.8                           86.6                         (4.4 )
                                                             ----------------------------                      ----------------------------
Total net revenues                                             154.6                                             168.6                                            (8.3 )
Cost of sales including occupancy costs                         90.4                                              95.3                                            (5.1 )
Store operating expenses                                        30.7                                              30.2                                             1.7
Other operating expenses                                        17.5                                              23.7                                           (26.2 )
Depreciation and amortization expenses                           2.9                                               3.6                                           (19.4 )
General and administrative expenses                              3.5                            9.9                        (64.6 )
                                                             ----------------------------                      ----------------------------
  Total operating expenses                                     145.0                          162.7                        (10.9 )
                                                             ----------------------------                      ----------------------------
  Operating income                                            $  9.6                         $  5.9                         62.7                    %
                                                             == ==== ====================                      == ==== ====================
                                                                                                                                                                        
                                                                                                                                                                        
 
                     Supplemental Information
-----------------------------------------------------------------
 
The following supplemental information is provided for historical
and comparative purposes.
 
                                                                                  
U.S. Supplemental Data
--------------------------------
                                                                                    
                                                      ------------------------------------------------------------------ --------------------
                                                                       Quarter Ended
($ in millions)                     Jan 1, 2017  Dec 27, 2015          Change
-------------------------------- -------------------- ----------- -------------------- ------------ -------------------- --------------------
Revenues                                                $3,654.4      $3,410.8                                 7%
Comparable Store Sales Growth(1)                           3%                               9%
  Change in Transactions                                  (2)%                              4%
  Change in Ticket                      5%            5%         
-------------------------------- -------------------- ----------- -------------------- ------------ -------------------- --------------------
                                                                                                                          
(1)   Includes only Starbucks company-operated stores open 13 months or
                         longer. Comparable store sales exclude the effect of fluctuations in
                         foreign currency exchange rates.
                          
                                                                                                                                                                  
Store Data
----------------------------
                                                                                                                                                                                                                                                
                                                                                 Net stores opened/(closed) and transferred                                                            
                                                                                                   during
                                                                                                 the period
                                                  ----------------------------------------------------------------------------------------------------                          -------------------- -------------------- -------------------- --------------------
                                                                                                Quarter Ended                                                                                                     Stores open as of
                                                  ---------------------------------------------------------------------------------------------------------                     ------------------------------------------------------------------------------------
                                                         Jan 1,                   Dec 27,                                     Jan 1,                                      Dec 27,
                                                          2017                                                           2015                                                           2017                                                           2015
                                                  -------------------- --------------------                      -------------------- --------------------                      -------------------- --------------------                      --------------------
Americas:
  Company-operated stores                                           75                                                             81                                                          9,094                                                          8,752
  Licensed stores                                                  176                                          90                                       6,764                                       6,222
                                                  -------------------- --------------------                      -------------------- --------------------                      -------------------- --------------------                      --------------------
    Total Americas                                                 251                                         171                                      15,858                                      14,974
                                                  -------------------- --------------------                      -------------------- --------------------                      -------------------- --------------------                      --------------------
China/Asia Pacific:
  Company-operated stores                                          104                                                             90                                                          2,915                                                          2,542
  Licensed stores                                                  199                                         191                                       3,831                                       3,201
                                                  -------------------- --------------------                      -------------------- --------------------                      -------------------- --------------------                      --------------------
    Total China/Asia Pacific                                       303                                         281                                       6,746                                       5,743
                                                  -------------------- --------------------                      -------------------- --------------------                      -------------------- --------------------                      --------------------
EMEA:
  Company-operated stores                                          (18 )                                                          (39 )                                                          505                                                            698
  Licensed stores                                                  113                                         118                                       2,232                                       1,743
                                                  -------------------- --------------------                      -------------------- --------------------                      -------------------- --------------------                      --------------------
    Total EMEA                                                      95                                          79                                       2,737                                       2,441
                                                  -------------------- --------------------                      -------------------- --------------------                      -------------------- --------------------                      --------------------
All Other Segments:
  Company-operated stores                                           (2 )                                                           (1 )                                                          356                                                            374
  Licensed stores                                                    2                                          (2 )                                                           37                                          39
                                                  -------------------- --------------------                      -------------------- --------------------                      -------------------- --------------------                      --------------------
    Total All Other Segments                            --                                          (3 )                                                          393                                         413
                                                  -------------------- --------------------                      -------------------- --------------------                      -------------------- --------------------                      --------------------
                                                                                                                              
                                                  -------------------- --------------------                      -------------------- --------------------                      -------------------- --------------------                      --------------------
Total Company                                                      649                                         528                                      25,734                                      23,571
                                                  ==================== ====================                      ==================== ====================                      ==================== ====================                      ====================
                                                                                                                                                                                                                                                

Non-GAAP Disclosure

In addition to the GAAP results provided in this release, the company provides certain non-GAAP financial measures. Non-GAAP financial measures are not in accordance with, or alternatives for, generally accepted accounting principles in the United States. Our non-GAAP financial measures of non-GAAP operating income, non-GAAP operating margin and non-GAAP EPS exclude the below listed items. The GAAP measures most directly comparable to non-GAAP operating income, non-GAAP operating margin and non-GAAP EPS are operating income, operating margin and diluted net earnings per share, respectively.

                          
----------------------------------------- -------------------- --------------------------------------------------------------------
            Non-GAAP Exclusion                                            Rationale
----------------------------------------- -------------------- --------------------------------------------------------------------
Starbucks Japan acquisition-related items   Management excludes Starbucks Japan acquisition-related transaction
                                                               costs as these items do not reflect expected future expenses and do
                                                               not contribute to a meaningful evaluation of the company’s future
                                                               operating performance or comparisons to the company’s past operating
                                                               performance. In addition, management excludes Starbucks Japan
                                                               integration costs and amortization of the acquired intangible assets
                                                               when evaluating the performance because these expenses are not
                                                               representative of our core business operations. Although these items
                                                               will affect earnings per share beyond the current fiscal year, the
                                                               majority of these costs will be recognized over a finite period of
                                                               time. More specifically, integration costs are expected to be
                                                               concentrated in the first several years post-acquisition.
                                                               Additionally, the amounts of the acquired intangible assets are
                                                               specific to the transaction, and the related future amortization was
                                                               fixed at the time of acquisition and generally cannot subsequently
                                                               be changed or influenced by management.
----------------------------------------- -------------------- --------------------------------------------------------------------
Sale of Germany retail operations           Management excludes the gain on sale of the Germany retail
                                                               operations and related costs as these items do not reflect future
                                                               gains, losses, costs or tax benefits and do not contribute to a
                                                               meaningful evaluation of the company’s past or future operating
                                                               performance.
----------------------------------------- -------------------- --------------------------------------------------------------------
Other tax matters                           Management excludes incremental tax benefits in the U.S. as these
                                                               tax benefits do not contribute to a meaningful evaluation of the
                                                               company’s past or future operating performance.
----------------------------------------- -------------------- --------------------------------------------------------------------
Impact of the extra week in FY16            Management excludes the impact of the extra week in full year fiscal
                                                               2016 non-GAAP earnings per share because it is not a regular
                                                               occurrence in the company’s fiscal calendar, and this exclusion
                                                               provides a more relative non-GAAP EPS comparison of the company’s
                                                               2016 performance when compared to full year projected fiscal 2017
                                                               performance, which will not have an extra week.
----------------------------------------- -------------------- --------------------------------------------------------------------
                                           

Non-GAAP operating income, non-GAAP operating margin and non-GAAP EPS 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.

                                                                                                                                                             
                                                                                                  STARBUCKS CORPORATION
                                                                              RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES
                                                                                                       (unaudited)
 
                                                                                                                     
                                                                          ----------------------------------------------------------------------------------------------------
                                                                                                                      Quarter Ended
                                                                          -----------------------------------------------------------------------------------------------------
                                                                                  Jan 1,                 Dec 27,                                  Change
                                                                                   2017                                                         2015
                                                                          --------------------  --------------------                      --------------  --------------------                      -------------------
Consolidated
----------------------------------------------------
Operating income, as reported (GAAP)                                               $    1,132.6                                                 $ 1,058.0                                                  7.1 %
Starbucks Japan acquisition-related items - other(1)                                       14.0                                   12.3  
                                                                          ------------------------------------------                      ------------------------------------
Non-GAAP operating income                                                          $    1,146.6                              $ 1,070.3                               7.1 %
                                                                          ========== ========== ====================                      ======= ======= ====================
                                                                                                                                                                                                     
Operating margin, as reported (GAAP)                                                       19.8                    %                                 19.7                    %                             10 bps
Starbucks Japan acquisition-related items - other(1)                                        0.2                                    0.2  
                                                                          ------------------------------------------                      ------------------------------------
Non-GAAP operating margin                                                                  20.0                    %                                 19.9                    %                             10 bps
                                                                          ==========================================                      ====================================
                                                                                                                                                                                                     
Diluted net earnings per share, as reported (GAAP)                                 $       0.51                                                 $    0.46                                                 10.9 %
Starbucks Japan acquisition-related items - other(1)                                       0.01                                                      0.01
Income tax effect on Non-GAAP adjustments(2)                                     --                         --  
                                                                          ------------------------------------------                      ------------------------------------
Non-GAAP net earnings per share                                                    $       0.52                              $    0.46                              13.0 %
                                                                          ========== ========== ====================                      ======= ======= ====================
                                                                                                                                                                                                     
China/Asia Pacific (CAP)
----------------------------------------------------
Operating income, as reported (GAAP)                                               $      163.4                                                 $   127.1                                                 28.6 %
Starbucks Japan acquisition-related items(3)                                               14.0                                   12.1  
                                                                          ------------------------------------------                      ------------------------------------
Non-GAAP operating income                                                          $      177.4                              $   139.2                              27.4 %
                                                                          ========== ========== ====================                      ======= ======= ====================
                                                                                                                                                                                                     
Operating margin, as reported (GAAP)                                                       21.2                    %                                 19.4                    %                             180 bps
Starbucks Japan acquisition-related items(3)                                                1.8                                    1.9  
                                                                          ------------------------------------------                      ------------------------------------
Non-GAAP operating margin                                                                  23.0                    %                                 21.3                    %                             170 bps
                                                                          ==========================================                      ====================================
                                                                                                                                                                                                     
(1)   Includes ongoing amortization expense of acquired intangible assets
                         and transaction and integration costs, such as incremental
                         information technology ("IT") and compensation-related costs
                         associated with the acquisition.
(2)                      Income tax effect on non-GAAP adjustments was determined based on
                         the nature of the underlying items and their relevant jurisdictional
                         tax rates.
(3)                      Includes ongoing amortization expense of acquired intangible assets
                         associated with the acquisition and post-acquisition integration
                         costs, such as compensation-related costs.
                          
                                                                                                                                                              
                                                                                                   
                                                                                    ---------------------------------------------- -------------------- ------------------------------------------
                                                                                                                                      Year Ended
                                                                                    ---------------------------------------------------------------------------------------------------------------
                                                                                              Oct 1,                                                            Oct 2,
                                                                                               2017                                                              2016
                                                                                                                                                                                                                         
Consolidated                                                                                (Projected,                                   (As Reported,                                   Change
                                                                                          52 Weeks Ended)                                                   53 Weeks Ended)
--------------------------------------------------------------                      ------------------------  --------------------                      --------------------  --------------------                      --------------------
Diluted net earnings per share (GAAP)                                                        $   2.09 - $2.11                                                    $       1.90                                                   10 % - 11%
Starbucks Japan acquisition-related items - other(1)                                                     0.04                                                            0.04
Sale of Germany retail operations(2)                                                           --                                                  --
Income tax effect on Non-GAAP adjustments(3)                                                            (0.01 )                                                         (0.01 )
Other tax matters(4)                                                                           --                                        (0.01 )
                                                                                               -------------- --------------------                      --------------------  --------------------
Non-GAAP net earnings per share                                                              $   2.12 - $2.14                                                    $       1.91                                                   11 % - 12%
Impact of the extra week - Q4 FY16                                                             --                                                           (0.09 )
Income tax effect on the impact of the extra week - Q4 FY16(3)                                 --                                         0.03  
                                                                                               -------------- --------------------                      --------------------  --------------------
Non-GAAP net earnings per share (52-week basis)                                              $   2.12 - $2.14                                                    $       1.85                                                   15 % - 16%
                                                                                                                                                                                                                         
(1)   Includes ongoing amortization expense of acquired intangible assets
                         and transaction and integration costs, such as incremental IT and
                         compensation-related costs associated with the acquisition.
(2)                      The sale of Germany retail operations includes certain costs
                         associated with the transfer of these stores to licensed stores.
(3)                      Income tax effect on non-GAAP adjustments was determined based on
                         the nature of the underlying items and their relevant jurisdictional
                         tax rates.
(4)                      Other tax matters include the incremental benefit from additional
                         domestic manufacturing deductions claimed in our U.S. consolidated
                         tax returns for periods prior to FY16.

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20170126006092r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20170126006092/en/

SOURCE: Starbucks Corporation

Starbucks Contact, Investor Relations: 
Tom Shaw, 206-318-7118 
investorrelations@starbucks.com 
or 
Starbucks Contact, Media: 
Alisha Damodaran, 206-318-7100 
press@starbucks.com


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