Starbucks(SBUX) - 2024 Q2 - Quarterly Results

Financial Performance - Q2 consolidated net revenues decreased by 2% to $8.6 billion, with a 1% decline on a constant currency basis[2] - Global comparable store sales declined by 4%, driven by a 6% decline in comparable transactions, partially offset by a 2% increase in average ticket[2] - North America segment revenues were flat at $6.4 billion, with a 3% decline in comparable store sales[3] - International segment revenues decreased by 5% to $1.8 billion, impacted by a 6% decline in comparable store sales and approximately 5% unfavorable foreign currency translation[5] - Channel Development segment revenues fell by 13% to $418.2 million, primarily due to a decline in revenue from the Global Coffee Alliance[8] - Total net revenues for the quarter ended Mar 31, 2024, were $8,563.0 million, a decrease of 1.8% compared to $8,719.8 million for the quarter ended Apr 2, 2023[24] - Net earnings attributable to Starbucks for the quarter ended Mar 31, 2024, were $772.4 million, down 15.0% from $908.3 million in the same quarter last year[24] - Earnings per diluted share for the quarter ended Mar 31, 2024, were $0.68, a decrease of 13.9% compared to $0.79 for the quarter ended Apr 2, 2023[24] - For the two quarters ended Mar 31, 2024, total net revenues were $17,988.3 million, an increase of 3.2% from $17,433.8 million in the prior year[26] - Net earnings attributable to Starbucks for the two quarters ended Mar 31, 2024, were $1,796.8 million, reflecting a 1.9% increase from $1,763.6 million in the same period last year[26] Store Operations - The company opened 364 net new stores in Q2, ending the period with 38,951 stores globally[2] - The total number of stores increased to 38,951 as of March 31, 2024, up from 36,634 as of April 2, 2023, representing a 6% growth[43] - Company-operated store revenues accounted for 82.4% of total net revenues for the quarter ended Mar 31, 2024[24] - Company-operated store revenues in North America increased by 4.2% to $12,105.7 million compared to $11,613.2 million for the same two quarters last year[28] - Company-operated store revenues in International markets rose by 3.4% to $2,702.2 million, compared to $2,612.5 million in the previous year[30] Expenses and Margins - GAAP operating margin contracted by 240 basis points year-over-year to 12.8%[2] - Store operating expenses as a percentage of company-operated store revenues increased to 52.8% for the quarter ended Mar 31, 2024, compared to 50.9% in the same quarter last year[24] - Total operating expenses for the quarter ended Mar 31, 2024, were $7,532.1 million, virtually unchanged from $7,535.0 million in the prior year[24] - Operating income for North America was $1,148.3 million, representing an operating margin of 18.0%, down from 19.1% in the previous year[28] - Operating income for International operations decreased to $233.8 million, with an operating margin of 13.3%, down from 17.0% year-over-year[30] - Total operating expenses in North America increased by 1.3% to $5,231.7 million, compared to $5,162.7 million last year[28] - Total operating expenses in International markets decreased by 1.1% to $1,523.7 million from $1,540.9 million year-over-year[30] Earnings and Dividends - The Board of Directors declared a cash dividend of $0.57 per share, demonstrating a commitment to consistent value creation for shareholders[15] - Cash dividends declared per share increased to $1.14 for the two quarters ended Mar 31, 2024, compared to $1.06 in the same period last year[26] - Cash dividends paid for the quarter ended March 31, 2024, were $1,293.5 million, an increase from $1,217.4 million for the quarter ended April 2, 2023[38] Tax and Liabilities - The effective tax rate for the quarter ended Mar 31, 2024, was 22.2%, down from 24.9% in the same quarter last year[24] - Current assets decreased to $6,465.0 million as of March 31, 2024, down from $7,303.4 million on October 1, 2023[36] - Total liabilities increased to $37,805.4 million as of March 31, 2024, compared to $37,433.3 million on October 1, 2023[36] - The company's retained deficit increased to $(7,970.7) million as of March 31, 2024, from $(7,255.8) million on October 1, 2023[36] - Total assets decreased slightly to $29,363.2 million as of March 31, 2024, from $29,445.5 million on October 1, 2023[36] Cash Flow and Investments - The company reported a net cash provided by operating activities of $2,889.9 million for the quarter ended March 31, 2024, compared to $2,360.8 million for the quarter ended April 2, 2023[38] - The company reported a net cash used in investing activities of $1,264.0 million for the quarter ended March 31, 2024, compared to $907.0 million for the quarter ended April 2, 2023[38] Operating Losses and Impairments - The company reported an operating loss of $499.5 million for the quarter ended March 31, 2024, compared to an operating loss of $467.2 million in the same quarter of the previous year, reflecting a 6.9% increase in losses[33] - The company experienced a loss on retirement and impairment of assets amounting to $42.5 million for the quarter ended March 31, 2024[38] Non-GAAP Measures - Reported GAAP operating income decreased by 17.2% to $1,098.9 million compared to $1,327.5 million in the previous year[51] - Non-GAAP operating income declined by 11.7% to $1,098.9 million from $1,245.1 million year-over-year[51] - Operating margin as reported (GAAP) fell by 240 basis points to 12.8% from 15.2%[51] - Diluted net earnings per share (GAAP) decreased by 13.9% to $0.68 compared to $0.79 in the prior year[51] - Non-GAAP EPS declined by 8.1% to $0.68 from $0.74 year-over-year[51] - Non-GAAP operating margin decreased by 150 basis points to 12.8% from 14.3%[51] - The company reported no restructuring and impairment costs for the current quarter[51] - There were no transaction and integration-related costs reported for the current quarter[51] - The gain from the sale of assets was reported as a loss of $91.3 million[51] - The company experienced a constant currency change impact of 1.5% on non-GAAP operating income[51]