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$SBUX 2Q15 10-Q: Net revenues rose 18% YoverY to $4.6Bil, primarily driven by $270MM of incremental revenues from the Starbucks Japan acquisition, 7% global comp store sales growth & incremental revenue from 1,511 net new store openings over the last 12 months, partially offset by $70MM of unfavorable ForEx. Operating income rose 21% to $778MM.
$SBUX expects its non-GAAP tax rate to be around 26% in 2018 and 2019, about 7 points lower than the most recent guidance issued by the company before the change in the tax law. Starbucks is looking to make additional partner investments, beginning 2019. Plans are afoot to expand channel development in developing markets, particularly in China.
Beginning March this year, $SBUX will accelerate the ramp up of ‘Mobile Order and Pay’ to all customers. A partnership with Chase and Visa is in the pipeline to launch a co-branded credit card in February, and a stored value card in April. Also, A major campaign will be launched to sign up customers for special offers outside of Starbucks Rewards.
$SBUX announced plans to extend the availability of its Mercato fresh food menu to at least six new markets this year. Also, Nitro Cold Brew will be rolled out in 1,000 more stores in the US by the end of the year. A major initiative is under way to expand the digitally connected customer population beyond Rewards members.
China continues to be the fastest growing market for $SBUX, as the coffee company winds up its fiscal 2018 first quarter. In the US, the main growth drivers were stable demand and strong digital performance. However, a slump in transaction comps owing to muted response to holiday sales contributed to margin compression, compared to last year.
$SBUX's revenues benefited significantly from expansion of the store network in 1Q18. Overall, 700 new stores were opened in 2017, marking a more aggressive addition than in 2016. By the end of last year, 278 more stores were opened in the Americas, and 123 new ones in the EMEA market. The store count in China and Asia Pacific were raised by 300.
The Americas segment of $SBUX registered a 7% annual increase in first quarter revenues. Revenues from the China and Asia Pacific markets advanced 9% during the quarter, while there was an 8% growth in the EMEA segment. Revenues of the Channel Development segment rose modestly by 1%.
Coffee giant $SBUX reported record earnings in 1Q18, helped by higher sales and gains related to acquisitions. Earnings jumped to $1.57 per share from $0.51 per share last year. Overall comparable store sales gained 2% during the quarter, and revenues advanced 6% to $6Bil. Contributing to the topline growth, revenues in China increased 30%.
According to a study, the tall latte from $SBUX is dearer in Zurich than in New York. Cairo is where it is inexpensive, even when compared to the low London prices, illustrating how the US Dollar’s value against various currencies can affect the cost of a cup of coffee.
Capex in FY18 is expected to total roughly $2.0Bil for $SBUX. GAAP EPS growth rate in FY18 is likely to be above 40%. Starbucks sees non-GAAP EPS growth of 12-13% or $2.30-2.33 per share in the fiscal year with growth in the front half of the year, likely a bit below the full-year average, and growth in the back half somewhat above it.
$SBUX announced that its effects to streamline the business regarding Teavana and TAZO will add 2-3 points to targeted revenue growth in the high single digits for FY18. For GAAP EPS, "the impact of these actions will be very positive given the large expected gains on East China and on TAZO."
$SBUX announced that it has entered into an agreement with its long-time strategic partner Maxim’s Caterers Limited, a restaurant operator of multiple brands across Asia, to fully license Starbucks operations in Singapore. Under the deal, Maxim’s Caterers Limited will have the exclusive rights to operate and develop Starbucks stores in Singapore.