Starbucks Corporation (NASDAQ:SBUX) Q4 2017 Earnings Conference Call Transcript

Nov 02, 2017 • 05:00 pm ET


Starbucks Corporation (NASDAQ:SBUX) Q4 2017 Earnings Conference Call Transcript


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Good afternoon. My name is Rob and I will be your conference operator today. At this time, I would like to welcome everyone to Starbucks Coffee Company's Fourth Quarter and Fiscal Year 2017 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions)

We'll now turn the call over to Tom Shaw, Vice President, Investor Relations. Mr. Shaw, you may now begin your conference.

Tom Shaw

Good afternoon, everyone, and thanks for joining us today to discuss our fourth quarter and full-year results for fiscal 2017. Today's discussion will be led by Kevin Johnson, President and CEO; and Scott Maw, CFO. For Q&A, we'll be joined by Roz Brewer, Group President Americas and Chief Operating Officer; John Culver, Group President, International and Channels; Matt Ryan, Global Chief Strategy Officer; and dialing in from New York, Howard Schultz, Executive Chairman. (Forward-Looking Cautionary Statements) Before handing the call over to Kevin, I'll take a moment to clarify that all references on today's call will be on a non-GAAP basis. GAAP results in fiscal 2017 include several items related to strategic actions the Company is taking as it focuses on accelerating growth in high-returning businesses and streamlining its operations.

These items include restructuring and impairment charges, transaction and integration costs, gains related to changes in ownership of international markets, and other items. These items are excluded from our non-GAAP results. Additionally, please note that fiscal 2016 contained an extra week in the fourth quarter, which resulted in incremental revenue and income for both Q4 of fiscal 2016 and full-year fiscal 2016. Our comparisons to fiscal 2016 results exclude the effect of this extra week. Please refer to our website at to find the reconciliation of non-GAAP financial measures referenced in today's call with our corresponding GAAP measures. This conference call is being webcast and an archive of the webcast will be available on our website as well.

I will now turn the call over to Kevin.

Kevin Johnson

Thank you, Tom, and welcome, everyone. Today, Starbucks Coffee Company reported another quarter and year of strong performance with each of our business segments around the world contributing to record results. On today's call, I will provide highlights of Q4 and fiscal 2017 and share our view of Starbucks' longer-term growth opportunity. Scott will then take you through details of our operating and financial performance and updated guidance. In fiscal 2017, Starbucks delivered record revenues of $22.4 billion, a record 19.7% non-GAAP operating income margin, and non-GAAP earnings per share growth of 11% over prior year. At the same time, we made significant investments to support the growth of our business and added over 2,200 net new stores to a total of now over 27,000 stores globally. China was a stand out in fiscal 2017 posting 7% comp growth, strong revenue growth, and another year of record AUVs and strong profitability.

We added over 550 net new stores in China in fiscal