STARBUCKS CORP (SBUX) SEC Filing 10-K Annual report for the fiscal year ending Sunday, September 30, 2018

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Exhibit 99.1

Starbucks Reports Q4 and Full Year Fiscal 2018 Results
Q4 Consolidated Net Revenues Up 11% to Record $6.3 Billion
Q4 Comparable Store Sales Up 3% Globally Driven by 4% Growth in the U.S.
China Comparable Store Sales Up 1% in Q4, Improved from -2% Reported in Q3
GAAP EPS of $0.56; Non-GAAP EPS of $0.62, Up 13% Year-Over-Year
Active Starbucks RewardsTM Membership in the U.S. Increases 15% Year-Over-Year to 15.3 Million
Returned $8.9 Billion to Shareholders in Fiscal Year 2018, Consistent with Our 3-Year Target to Return $25 Billion

SEATTLE; November 1, 2018 – Starbucks Corporation (NASDAQ: SBUX) today reported financial results for its 13-week fiscal fourth quarter and 52-week year ended September 30, 2018. GAAP results in fiscal 2018 and fiscal 2017 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.

Q4 Fiscal 2018 Highlights
Global comparable store sales increased 3%, driven by a 4% increase in average ticket
Americas and U.S. comparable store sales increased 4%
CAP and China comparable store sales increased 1%
Consolidated net revenues of $6.3 billion, up 11% over the prior year
Adjusted for an approximately 2% net benefit from streamline-driven activities, and approximately 1% headwind from unfavorable foreign currency translation, consolidated net revenues grew 9% over the prior year
Streamline-driven activities include the consolidation of the acquired East China business, partially offset by licensing our CPG and foodservice businesses to Nestlé following the close of the deal on August 26, 2018, Teavana mall store closures, and the conversion of certain international retail operations from company-owned to licensed models
GAAP operating margin, inclusive of restructuring and impairment charges, declined 270 basis points year-over-year to 15.2%
Non-GAAP operating margin of 18.1% declined 190 basis points compared to the prior year
GAAP Earnings Per Share of $0.56, up 4% over the prior year
Non-GAAP EPS of $0.62, up 13% over the prior year
Starbucks RewardsTM loyalty program grew to 15.3 million active members in the U.S., up 15% year-over-year
Mobile Order and Pay represented 14% of U.S. company-operated transactions
The company opened 604 net new stores in Q4 and now operates 29,324 stores across 78 markets
The company returned $3.6 billion to shareholders through a combination of dividends and share repurchases

Fiscal Year 2018 Highlights
Global comparable store sales increased 2%, driven by a 3% increase in average ticket
Americas and U.S. comparable store sales increased 2%
CAP comparable store sales increased 1%
China comparable store sales increased 2%
Consolidated net revenues of $24.7 billion, up 10% over the prior year
Adjusted for an approximately 2% net benefit from streamline-driven activities, and approximately 1% benefit from favorable foreign currency translation, consolidated net revenues grew 8% over the prior year
Streamline-driven activities include the consolidation of the acquired East China business, partially offset by Teavana mall store closures, the conversion of certain international retail operations from company-owned to licensed models, licensing our CPG and foodservice businesses to Nestlé following the close of the deal on August 26, 2018, and the sale of our Tazo brand in Q1 FY18
GAAP operating margin, inclusive of restructuring and impairment charges, declined 280 basis points year-over-year to 15.7%
Non-GAAP operating margin of 18.0% declined 170 basis points compared to the prior year

- more -

The following information was filed by STARBUCKS CORP on Thursday, November 1, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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  • 17994097_276
    Financial - Shares / Equity
    The change was primarily due to an increase in cash returned to shareholders through share repurchases and dividend payments, partially offset by higher proceeds from the issuance of long-term debt.
  • 17994097_52
    Revenue - Geography
    These results are expected to be driven by our three strategic priorities, which include: Accelerate growth in our targeted, long-term growth markets of the U.S. and China Expand the global reach of the Starbucks brand leveraging the Global Coffee Alliance Sharpen our focus on increasing shareholder returns To successfully achieve these priorities, we will undertake a number of initiatives, including growing our core business in the U.S. through enhancement of the in-store experience, delivery of customer-relevant beverage innovation and digital relationships, and growing our business in China through new store expansion, comparable store sales and business partnerships.
  • 17994097_155
    Other - Other
    The increase in the effective tax rate was primarily due to unfavorability from non-deductible goodwill impairment charges recorded in the third quarter of fiscal 2017 (approximately 70 basis points) and the lapping of the release of certain tax reserves in the third quarter of fiscal 2016, primarily related to statute closures (approximately 30 basis points).
  • 17994097_244
    Financial - Debt
    Use of Cash We expect to use our available cash and investments, including, but not limited to, additional potential future borrowings under the credit facilities, commercial paper program and the issuance of debt, to invest in our core businesses, including capital expenditures, new product innovations, related marketing support and partner and digital investments, return cash to shareholders through common stock cash dividend payments and share repurchases, as well as other new business opportunities related to our core and other developing businesses.
  • 17994097_170
    Financial - Expense
    Operating Expenses Cost of sales including occupancy costs as a percentage of total net revenues decreased 110 basis points, primarily driven by favorability from the transition to China's new value added tax structure (approximately 120 basis points).
  • 17994097_231
    Financial - Dividend
    The proceeds from borrowings under our commercial paper program may be used for working capital needs, capital expenditures and other corporate purposes, including, but not limited to, business expansion, payment of cash dividends on our common stock and share repurchases.
  • 17994097_71
    Financial - Expense
    Restructuring and impairment expenses increased $71 million, primarily due to higher asset impairments associated with the decision to close certain company-operated stores in the U.S. and Canada ($23 million), higher goodwill impairment charges associated with our Switzerland company-operated retail reporting unit ($20 million) and EMEA restructuring costs, including severance and asset impairments ($18 million).
  • 17994097_129
    Financial - Income
    Income from equity investees decreased $11 million for fiscal 2018, due to lower income from our North American Coffee Partnership joint venture, driven by decreased sales of Frappuccino, Starbucks Doubleshot and Iced Coffee beverages.
  • 17994097_135
    Revenue - Product
    Partially offsetting these incremental revenues was the absence of the 53rd week ($324 million), the absence of sales from the conversion of certain company operated stores to licensed stores ($121 million) and the impact of unfavorable foreign currency translation ($70 million).
  • 17994097_206
    Financial - Earnings
    The combination of these changes contributed to an overall increase in operating margin of 290 basis points in fiscal 2017 when compared to fiscal 2016.
  • 17994097_32
    Revenue - Product
    Consolidated total net revenues increased 10% to $24.7 billion, primarily driven by incremental revenues from 1,997 net new store openings over the past 12 months, incremental revenues from the impact of our ownership change in East China, 2% growth in global comparable store sales and favorable foreign currency translation.
  • 17994097_374
    Other - Other
    Although we believe that the judgments and estimates discussed herein are reasonable, actual results could differ, and we may be exposed to losses or gains that could be material.
  • 17994097_187
    Revenue - Product
    As a percentage of company-operated store revenues, store operating expenses increased 330 basis points, primarily due to sales deleverage in certain company-operated stores (approximately 320 basis points) and the impact of a tax settlement (approximately 100 basis points), partially offset by the shift in the portfolio towards more licensed stores (approximately 140 basis points).
  • 17994097_126
    Financial - Expense
    Operating Expenses Cost of sales as a percentage of total net revenues increased 90 basis points, primarily driven by the impact of licensing our CPG and foodservice businesses to Nestle and the sale of our Tazo brand (approximately 120 basis points), partially offset by lapping a revenue deduction adjustment recorded in the second quarter of fiscal 2017 (approximately 30 basis points).
  • 17994097_190
    Financial - Expense
    Depreciation and amortization expenses as a percentage of total net revenues decreased 50 basis points, primarily due to the shift in portfolio towards more licensed stores (approximately 50 basis points).
  • 17994097_205
    Financial - Income
    Income from equity investees increased $28 million for fiscal 2017, due to higher income from our North American Coffee Partnership joint venture, driven by increased sales of Frappuccino? and Starbucks Doubleshot? beverages as well as new product launches over the past 12 months.
  • 17994097_211
    Other - Other
    Cash and Investment Overview Our cash and investments were $9.2 billion and $3.2 billion as of September 30, 2018 and October 1, 2017, respectively with the increase driven primarily by the upfront payment associated with the Global Coffee Alliance.
  • 17994097_185
    Financial - Expense
    Operating Expenses Cost of sales including occupancy costs as a percentage of total net revenues increased 260 basis points, primarily due to unfavorable foreign currency transactions (approximately 150 basis points) and the shift in the composition of our store portfolio to more licensed stores, which have a lower gross margin (approximately 100 basis points).
  • 17994097_167
    Revenue - Product
    Revenues China/Asia Pacific total net revenues for fiscal 2017 increased $301 million, or 10%, over fiscal 2016, primarily from higher company-operated store revenues ($266 million), driven by incremental revenues from 392 net new company-operated store openings over the past 12 months ($293 million).
  • 17994097_44
    Revenue - Product
    In our EMEA segment, revenue grew by 9% to $1.0 billion, primarily driven by increased revenues from the opening of 356 net new licensed stores over the past 12 months and favorable foreign currency translation.
  • 17994097_113
    Revenue - Product
    As a percentage of company-operated store revenues, store operating expenses increased 40 basis points, primarily due to sales deleverage on salaries and benefits, largely due to increased minimum wage in certain markets (approximately 140 basis points), partially offset by lapping a prior year tax settlement (approximately 100 basis points).
  • 17994097_40
    Revenue - Product
    In our CAP segment, revenue grew by 38% to $4.5 billion, primarily driven by the impact of our ownership change in East China at the end of the first quarter of fiscal 2018, incremental revenues from 756 net new stores over the past 12 months.
  • 17994097_182
    Revenue - Geography
    Also contributing to the decline was unfavorable foreign currency translation ($43 million) and the absence of the 53rd week ($11 million).
  • 17994097_251
    Financial - Expense
    We have borrowed funds and continue to believe we have the ability to do so at reasonable interest rates; however, additional borrowings would result in increased interest expense in the future.
  • 17994097_179
    Financial - Earnings
    The combination of these changes resulted in an overall increase in operating margin of 210 basis points in fiscal 2017 when compared to fiscal 2016.
  • 17994097_95
    Financial - Earnings
    This resulted in a higher operating margin.
  • 17994097_97
    Revenue - Product
    Revenues China/Asia Pacific total net revenues for fiscal 2018 increased $1.2 billion, or 38%, over fiscal 2017, primarily driven by higher company-operated store revenues ($1.2 billion) due to the impact of our ownership change in East China ($903 million) and incremental revenues from 443 net new company-operated store openings over the past 12 months ($300 million).
  • 17994097_210
    Financial - Expense
    We recorded $69 million for the partial impairment of goodwill and $60 million in restructuring-related costs, including asset impairments, costs associated with the early closure of stores and their related obligations, and severance.
  • 17994097_152
    Financial - Income
    Interest income and other, net increased $79 million, primarily driven by gain in our investment in Square, Inc. warrants ($41 million) and higher income recognized on unredeemed stored value card balances ($44 million).
  • 17994097_366
    Financial - Income
    We adjust our unrecognized tax benefit liability and income tax expense in the period in which the uncertain tax position is effectively settled, the statute of limitations expires for the relevant taxing authority to examine the tax position or when new information becomes available.
  • 17994097_102
    Financial - Expense
    Operating Expenses Cost of sales including occupancy costs as a percentage of total net revenues decreased 70 basis points, primarily due to the ownership change in East China (approximately 60 basis points).
  • 17994097_5
    Revenue - Product
    Global comparable store sales grew 2% driven by a 3% increase in average ticket.
  • 17994097_62
    Revenue - Product
    Licensed store revenue growth also contributed to the increase in total net revenues ($297 million), primarily due to increased product and equipment sales to and royalty revenues from our licensees ($298 million), largely due to the opening of 1,181 net new Starbucks licensed stores over the past 12 months, the conversions of both the Singapore and Taiwan markets to fully licensed in the fourth quarter of fiscal 2017 and the first quarter of fiscal 2018, respectively ($44 million).
  • 17994097_160
    Financial - Expense
    Operating Expenses Cost of sales including occupancy costs as a percentage of total net revenues increased 90 basis points, primarily due to a product mix shift (approximately 90 basis points) largely towards premium food.
  • 17994097_61
    Revenue - Product
    The growth in company-operated store revenues was driven by incremental revenues from 816 net new Starbucks company-operated store openings over the past 12 months ($904 million), incremental revenues from the impact of our ownership change in East China ($903 million) and a 2% increase in comparable store sales ($345 million), attributable to a 3% increase in average ticket.
  • 17994097_91
    Financial - Expense
    Restructuring and impairment charges increased $29 million due to higher asset impairments in fiscal 2018 compared to fiscal 2017 associated with the decision to close certain U.S. company-operated stores ($23 million) and costs associated with the closure of certain company-operated stores in the U.S. and Canada ($6 million) in fiscal 2018.
  • 17994097_225
    Financial - Earnings
    The applicable margin was increased from 0.585% to 0.92% for Eurocurrency Rate Loans and 0.00% (nil) for Base Rate Loans as a result of the extension.
  • 17994097_37
    Revenue - Geography
    Americas revenue grew by 7% to $16.7 billion, primarily driven by incremental revenues from 895 net new store openings over the last 12 months and comparable store sales growth of 2%, partially offset by the absence of revenue related to the conversion of our Brazil retail business to fully licensed operations in the second quarter of fiscal 2018.
  • 17994097_50
    Financial - Earnings
    Operating margin declined 250 basis points to 40.4%, primarily driven by business taxes associated with the upfront payment received from Nestle, Global Coffee Alliance headcount related costs, including employee bonus and retention costs, and the impact of our ownership changes, including licensing our CPG and foodservice businesses to Nestle and the sale of our Tazo brand.
  • 17994097_268
    Financial - Shares / Equity
    In early fiscal 2019, we commenced the repurchase of $5.0 billion of our common stock under accelerated share repurchase agreements.
  • 17994097_85
    Revenue - Product
    The increase in company-operated store revenues was driven by incremental revenues from 383 net new Starbucks company-operated store openings over the past 12 months ($604 million) and a 2% increase in comparable store sales ($319 million), attributable to a 3% increase in average ticket, partially offset by the conversion of our Brazil retail business to fully licensed operations in the second quarter of fiscal 2018 ($40 million).
  • 17994097_86
    Revenue - Product
    The increase in licensed store revenues was primarily driven by higher product sales to and royalty revenues from our licensees ($173 million), primarily resulting from the opening of 512 net new Starbucks licensed stores over the past 12 months.
  • 17994097_159
    Revenue - Product
    The increase in licensed store revenues was primarily driven by increased product sales to and royalty revenues from our licensees ($127 million), primarily resulting from the opening of 569 net new Starbucks? licensed stores over the past 12 months and improved comparable store sales, partially offset by the absence of the 53rd week ($31 million).
  • 17994097_183
    Revenue - Product
    Licensed store revenues increased $68 million, driven by higher product sales to and royalty revenues from our licensees ($95 million), resulting from the opening of 339 net new licensed stores and the transfer of 14 company-operated stores to licensed stores over the past 12 months.
  • 17994097_134
    Revenue - Product
    The growth in company-operated store revenues was primarily driven by incremental revenues from 768 net new Starbucks company-operated store openings over the past 12 months ($869 million) and a 3% increase in comparable store sales ($496 million), attributable to a 3% increase in average ticket.
  • 17994097_60
    Revenue - Product
    Total net revenues increased $2.3 billion, or 10%, over fiscal 2017, primarily driven by increased revenues from company-operated stores ($2.0 billion).
  • 17994097_133
    Revenue - Product
    Total net revenues increased $1.1 billion, or 5%, over fiscal 2016, primarily driven by increased revenues from company operated stores ($807 million).
  • 17994097_87
    Financial - Expense
    Operating Expenses Cost of sales including occupancy costs as a percentage of total net revenues increased 120 basis points, primarily due to food and beverage-related mix shifts (approximately 130 basis points).
  • 17994097_55
    Revenue - Product
    We expect moderate revenue growth in fiscal 2019, reflecting implementation of our streamlining activities and driven by comparable store sales growth and the opening of approximately 2,100 net new stores globally.
  • 17994097_100
    Revenue - Product
    Licensed store revenues increased $38 million, primarily driven by increased product sales to and royalty revenues from licensees ($44 million), primarily resulting from the opening of 313 net new licensed stores over the past 12 months, the conversion of our Taiwan joint venture to fully licensed operations at the end of the first quarter of fiscal 2018 ($25 million) and the conversion of our Singapore retail operations to fully licensed operations in the fourth quarter of fiscal 2017 ($20 million).
  • 17994097_81
    Financial - Income
    The impact from the Tax Act primarily included favorability from the lower corporate income tax rate applied to our fiscal 2018 results (approximately 760 basis points) and the remeasurement of our net deferred tax liabilities (approximately 130 basis points).
  • 17994097_151
    Revenue - Product
    Net gain resulting from divestiture of certain operations increased $88 million, primarily due to the gain from the sale of our Singapore retail operations in the fourth quarter of fiscal 2017 ($84 million).
  • 17994097_370
    Revenue - Geography
    The Company continues to evaluate its plans for reinvestment or repatriation of unremitted foreign earnings and thus has not adjusted its previous indefinite reinvestment assertions for the effects of the Tax Act.
  • 17994097_254
    Revenue - Geography
    We continue to evaluate our plans for reinvestment or repatriation of unremitted foreign earnings and thus have not adjusted our previous indefinite reinvestment assertions for the effects of the Tax Act.
  • 17994097_12
    MA - Other
    The increase was primarily driven by the gains from the acquisition of our East China joint venture and the sale of our Tazo brand.
  • 17994097_59
    MA - Other
    See Note 2, Acquisitions, Divestitures and Strategic Alliance, to the consolidated financial statements included in Item 8 of Part II of this 10-K for information regarding acquisitions and divestitures.
  • 17994097_47
    Revenue - Product
    Channel Development segment revenues grew by 2% to $2.3 billion, primarily driven by increased sales of packaged coffee and premium single-serve products, lapping a prior year revenue deduction adjustment and favorable foreign currency translation.
  • 17994097_98
    Revenue - Geography
    Also contributing were favorable foreign currency translation ($82 million) and a 1% increase in comparable store sales ($26 million).
  • 17994097_340
    Financial - Cash Flow
    However, as we periodically reassess estimated future cash flows and asset fair values, changes in our estimates and assumptions may cause us to realize material impairment charges in the future.
  • 17994097_252
    Financial - Debt
    In this regard, we may incur additional debt, within targeted levels, as part of our plans to fund our capital programs, including cash returns to shareholders through dividends and share repurchases.
  • 17994097_178
    Revenue - Geography
    East China also benefited from the new value added tax structure.
  • 17994097_353
    Financial - Cash Flow
    These estimates are highly subjective, and our ability to achieve the forecasted cash flows used in our fair value calculations is affected by factors such as the success of strategic initiatives, changes in economic conditions, changes in our operating performance and changes in our business strategies, including retail initiatives and international expansion.
  • 17994097_124
    Revenue - Product
    Revenue growth was driven by an increase in sales of our packaged coffee and premium single-serve products ($115 million), lapping a prior year revenue deduction adjustment ($13 million) and favorable foreign currency translation ($10 million).
  • 17994097_108
    Revenue - Product
    Revenues EMEA total net revenues for fiscal 2018 increased $89 million, or 9%, over fiscal 2017, primarily due to higher revenue from licensed stores ($64 million) and company-operated stores ($25 million).
  • 17994097_110
    Revenue - Product
    Licensed store revenues increased $64 million, or 16%, due to higher product sales to and royalty revenues from our licensees ($56 million), resulting from the opening of 356 net new licensed stores, and favorable foreign currency translation ($4 million).
  • 17994097_308
    Other - Other
    Trading securities are recorded at fair value and approximates a portion of our liability under our Management Deferred Compensation Plan ("MDCP").
  • 17994097_176
    Financial - Income
    Income from equity investees increased $47 million, driven by higher income from our joint venture operations, primarily in East China and South Korea.
  • 17994097_199
    Revenue - Product
    Revenue growth was driven by increased sales of packaged coffee, tea and premium single-serve products ($73 million), our ready-to-drink beverages ($21 million) and higher foodservice sales ($26 million).
  • 17994097_213
    Revenue - Product
    Our investment portfolio primarily includes highly liquid available-for-sale securities, including corporate debt securities, government treasury securities (domestic and foreign), mortgage and asset-backed securities, commercial paper, and agency obligations.
  • 17994097_230
    Other - Other
    Amounts outstanding under the commercial paper program are required to be backstopped by available commitments under our credit facilities discussed above.
  • 17994097_198
    Revenue - Product
    Revenues Channel Development total net revenues for fiscal 2017 increased $62 million, or 3%, over fiscal 2016.
  • 17994097_58
    Other - Other
    Capital expenditures in fiscal 2019 are expected to be approximately $2.0 billion, primarily related to our retail portfolio including investments in our new and existing stores and strategic store-related initiatives.
  • 17994097_274
    MA - Other
    The change was primarily due to cash used to acquire the 50% ownership interest in our East China joint venture in the first quarter of fiscal 2018 and additions to property, plant and equipment driven by new store openings and increased store renovations, partially offset by the net proceeds from the divestiture of certain operations.
  • 17994097_289
    Revenue - Geography
    Market risk is defined as the risk of losses due to changes in commodity prices, foreign currency exchange rates, equity security prices and interest rates.
  • 17994097_78
    Financial - Expense
    Interest expense increased $78 million primarily related to additional interest incurred on long-term debt issued in November 2017, March 2018 and August 2018.
  • 17994097_156
    Revenue - Product
    The increase was partially offset by the largely non-taxable gain on the sale of our Singapore retail operations in the fourth quarter of fiscal 2017 (approximately 70 basis points).
  • 17994097_123
    Revenue - Product
    Revenues Channel Development net revenues for fiscal 2018 increased $41 million, or 2%, over fiscal 2017.
  • 17994097_215
    MA - Other
    Borrowing capacity Our $2.0 billion unsecured 5-year revolving credit facility (the "2018 credit facility") and our $1.0 billion unsecured 364-Day credit facility (the "364-day credit facility") are available for working capital, capital expenditures and other corporate purposes, including acquisitions and share repurchases.
  • 17994097_137
    Revenue - Product
    Other revenues increased $64 million, primarily driven by increased sales of packaged coffee, tea and premium single-serve products ($73 million), our ready-to-drink beverages ($21 million) and higher foodservice sales ($26 million).
  • 17994097_212
    MA - Other
    We actively manage our cash and investments in order to internally fund operating needs, make scheduled interest and principal payments on our borrowings, make acquisitions, and return cash to shareholders through common stock cash dividend payments and share repurchases.
  • 17994097_84
    Revenue - Product
    Results of operations by segment (in millions): Revenues Americas total net revenues for fiscal 2018 increased $1.1 billion, or 7%, over fiscal 2017, primarily due to increased revenues from company-operated stores (contributing $909 million) and licensed stores (contributing $197 million).
  • 17994097_157
    Revenue - Product
    Results of operations by segment (in millions): Revenues Americas total net revenues for fiscal 2017 increased $845 million, or 6%, over fiscal 2016, primarily due to increased revenues from company-operated stores (contributing $749 million) and licensed stores (contributing $99 million).
  • 17994097_39
    Revenue - Product
    These increases were partially offset by sales leverage.
  • 17994097_69
    Financial - Expense
    Depreciation and amortization expenses as a percentage of total net revenues increased 50 basis points, primarily due to the impact of our ownership change in East China (approximately 60 basis points).
  • 17994097_158
    Revenue - Product
    The increase in company-operated store revenues was driven by incremental revenues from 383 net new Starbucks? company-operated store openings over the past 12 months ($585 million) and a 3% increase in comparable store sales ($426 million), attributable to a 4% increase in average ticket, partially offset by the absence of the 53rd week ($258 million).
  • 17994097_57
    Financial - Earnings
    While GAAP full-year diluted earnings per share is expected to decrease in fiscal 2019, full-year non-GAAP diluted earnings per share is expected to grow when excluding gains from acquisitions and divestitures in fiscal 2018, integration costs related to East China and Japan and restructuring and impairment expenses.
  • 17994097_38
    Financial - Income
    Operating income declined $39 million to $3.6 billion and operating margin of 21.6% declined 180 basis points from a year ago, primarily due to food and beverage-related mix shifts, increased investments in our store partners and the impact of the May 29th anti-bias training.
  • 17994097_77
    Financial - Income
    Interest income and other, net increased $10 million, primarily due to recognizing higher income on unredeemed stored value card balances, partially offset by lapping the gain on the sale of our investment in Square, Inc. warrants in the prior year period.
  • 17994097_48
    Revenue - Product
    These increases were partially offset by the net impact from the sale of our Tazo brand in the first quarter of fiscal 2018 and licensing our CPG and foodservice businesses to Nestle beginning on August 26, 2018.
  • 17994097_109
    Other - Other
    Company-operated stores increased $25 million, or 4%, primarily due to favorable currency translation ($31 million).
  • 17994097_30
    Financial - Shares / Equity
    The change from equity method to consolidation method lowered the operating margin of our Consolidated and CAP segment, primarily due to incremental depreciation and amortization expenses and lower income from equity investees.
  • 17994097_45
    Financial - Earnings
    Operating margin declined 400 basis points to 5.9% primarily due to higher impairment of goodwill related to our Switzerland retail business and restructuring costs, including severance, asset impairments and business process optimization expenses.
  • 17994097_79
    Other - Other
    The effective tax rate for fiscal 2018 was 21.8% compared to 33.2% for fiscal 2017.
  • 17994097_154
    Other - Other
    The effective tax rate for fiscal 2017 was 33.2% compared to 32.9% for fiscal 2016.
  • 17994097_360
    Financial - Income
    Our assumptions regarding future taxable income are consistent with the plans and estimates we use to manage our underlying businesses.
  • 17994097_304
    Financial - Cash Flow
    To reduce cash flow volatility from foreign currency fluctuations, we enter into derivative instruments to hedge portions of cash flows of anticipated intercompany royalty payments, inventory purchases, intercompany borrowing and lending activities and certain other transactions in currencies other than the functional currency of the entity that enters into the arrangements, as well as the translation risk of certain balance sheet items.
  • 17994097_169
    Revenue - Product
    Licensed store revenues increased $35 million, primarily driven by increased product sales to and royalty revenues from licensees ($39 million), primarily resulting from the opening of 644 net new licensed stores over the past 12 months, partially offset the absence of the 53rd week ($4 million).
  • 17994097_232
    Other - Other
    As of September 30, 2018, we had no borrowings under our commercial paper program.
  • 17994097_54
    Other - Other
    These additional streamlining initiatives will enable us to amplify our focus and resources on core value drivers with the greatest prospect for returns.
  • 17994097_351
    Revenue - Product
    The fair value calculation includes estimates of revenue growth, which are based on past performance and internal projections for the intangible asset group's forecasted growth, and royalty rates, which are adjusted for our particular facts and circumstances.
  • 17994097_8
    Financial - Earnings
    Operating margin compression in fiscal 2018 was primarily driven by food and beverage-related mix shifts, largely in the Americas segment, the impact of our ownership change in East China at the end of the first quarter of fiscal 2018, higher restructuring and impairment costs and higher salaries and benefits related to digital platforms, technology infrastructure and innovations.
  • 17994097_15
    Other - Other
    The change was primarily due to receipt of the upfront payment from Nestle related to the Global Coffee Alliance.
  • 17994097_148
    Revenue - Geography
    Additionally, we recorded $18 million of partial goodwill impairment relating to our Switzerland retail business.
  • 17994097_302
    Revenue - Product
    The information provided below relates only to the hedging instruments and does not represent the corresponding changes in the underlying hedged items (in millions): Commodity hedges $ $ (4 ) $ - $ - The majority of our revenue, expense and capital purchasing activities are transacted in U.S. dollars.
  • 17994097_209
    Other - Other
    The increase in the operating loss in fiscal 2017 compared to fiscal 2016 was primarily due to restructuring and impairment charges related to our strategy to close Teavana retail stores and focus on Teavana tea within Starbucks stores.
  • 17994097_117
    Financial - Expense
    Restructuring and impairment expenses increased $37 million, primarily due to higher goodwill impairment expense associated with our Switzerland retail reporting unit in fiscal 2018 than in the prior year period ($20 million) and EMEA restructuring costs, including severance and asset impairments ($18 million).
  • 17994097_11
    Financial - Earnings
    Earnings per share ("EPS") for fiscal 2018 increased to $3.24, compared to EPS of $1.97 in fiscal 2017.
  • 17994097_76
    Revenue - Product
    The gain in fiscal 2017 was primarily due to the sale of our Singapore retail operations.
  • 17994097_149
    Financial - Income
    Income from equity investees increased $73 million, due to higher income from our CAP joint venture operations, primarily China and South Korea, as well as our North American Coffee Partnership.
  • 17994097_13
    Other - Other
    Additionally, the net favorable impact from the Tax Cuts and Jobs Act (the "Tax Act") also contributed to the increase.
  • 17994097_341
    Other - Other
    We evaluate goodwill and indefinite-lived intangible assets for impairment annually during our third fiscal quarter, or more frequently if an event occurs or circumstances change that would indicate that impairment may exist.
  • 17994097_36
    Financial - Earnings
    Earnings per share of $3.24 increased 64% over the prior year earnings per share of $1.97.
  • 17994097_53
    Other - Other
    Further, we will continue expanding the reach of the Starbucks brand through retail market realignment, including our plans to license the France, Netherlands, Belgium and Luxembourg markets, business simplification and the Global Coffee Alliance.
  • 17994097_73
    Financial - Earnings
    The combination of these changes resulted in an overall decrease in operating margin of 280 basis points in fiscal 2018 when compared to fiscal 2017.
  • 17994097_92
    Financial - Earnings
    The combination of these changes resulted in an overall decrease in operating margin of 180 basis points in fiscal 2018 when compared to fiscal 2017.
  • 17994097_107
    Financial - Earnings
    The combination of these changes resulted in an overall decrease in operating margin of 420 basis points in fiscal 2018 when compared to fiscal 2017.
  • 17994097_118
    Financial - Earnings
    The combination of these changes resulted in an overall decrease in operating margin of 400 basis points in fiscal 2018 when compared to fiscal 2017.
  • 17994097_150
    Financial - Earnings
    The combination of these changes resulted in an overall decrease in operating margin of 110 basis points in fiscal 2017 when compared to fiscal 2016.
  • 17994097_166
    Financial - Earnings
    The combination of these changes resulted in an overall decrease in operating margin of 190 basis points in fiscal 2017 when compared to fiscal 2016.
  • 17994097_195
    Financial - Earnings
    The combination of these changes resulted in an overall decrease in operating margin of 230 basis points in fiscal 2017 when compared to fiscal 2016.
  • 17994097_64
    Revenue - Product
    Other revenues decreased $4 million, primarily driven by the absence of revenue from the sale of our Tazo brand in the first quarter of fiscal 2018 ($56 million), the closure of our e-commerce business in the fourth quarter of fiscal 2017 ($51 million) and licensing our CPG and foodservice businesses to Nestle late in the fourth quarter of fiscal 2018 ($50 million).
  • 17994097_147
    Financial - Expense
    We recorded $130 million of restructuring-related costs, including a partial goodwill impairment charge of $69 million, store asset impairments, and costs related to early store closure obligations and severance.
  • 17994097_348
    Financial - Cash Flow
    These estimates, as well as the selection of comparable companies and valuation multiples used in the market approaches are highly subjective, and our ability to realize the future cash flows used in our fair value calculations is affected by factors such as the success of strategic initiatives, changes in economic conditions, changes in our operating performance and changes in our business strategies, including retail initiatives and international expansion.
  • 17994097_220
    Financial - Earnings
    The current applicable margin is 0.680% for Eurocurrency Rate Loans and 0.00% (nil) for Base Rate Loans.
  • 17994097_301
    Financial - Earnings
    The following table summarizes the potential impact as of September 30, 2018 to Starbucks future net earnings and other comprehensive income ("OCI") from changes in commodity prices.
  • 17994097_229
    Other - Other
    Under our commercial paper program, we may issue unsecured commercial paper notes up to a maximum aggregate amount outstanding at any time of $3 billion, with individual maturities that may vary but not exceed 397 days from the date of issue.

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Exhibit 10.9 - MATERIAL CONTRACT

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Exhibit 10.21 - MATERIAL CONTRACT

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Exhibit 10.23 - MATERIAL CONTRACT

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Exhibit 21 - SUBSIDARIES OF THE REGISTRANT

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Exhibit 23 - CONSENTS OF EXPERTS AND COUNSEL

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Exhibit 31.1 - RULE 13A-14(A)/15D-14(A) CERTIFICATION

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Exhibit 31.2 - RULE 13A-14(A)/15D-14(A) CERTIFICATION

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Exhibit 32 - SECTION 1350 CERTIFICATION

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  • Form Type: Annual
  • Number of times amended: 0
  • Accession Number: 0000829224-18-000052
  • Submitted to the SEC: Friday, November 16, 2018 4:44:31 PM EST
  • Accepted by the SEC: Friday, November 16, 2018
  • Fiscal Year ending: September 2018
  • Industry: Retail Eating And Drinking Places
Companies
 

SBUX

STARBUCKS CORP

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