Question

What is Starbucks China's yearly budget (most recent year). Provide in proper financial statement document.

Answer 1

• 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 Rewards^TMloyalty 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
• GAAP Earnings Per Share of $3.24, up 64% over the prior year
  • Non-GAAP EPS of $2.42, up 17% over the prior year
• The company returned $8.9 billion to shareholders through a combination of dividends and share repurchases

“Starbucks record Q4 performance reflected meaningful improvement in virtually every critical operating metric compared to Q3,” said Kevin Johnson, ceo. “As we enter fiscal 2019, we are executing against a clear growth agenda, with a focus on our long-term growth markets of the U.S. and China. We are also excited about the long-term growth potential of our new Global Coffee Alliance with Nestlé. I’m incredibly proud of our 350,000 Starbucks partners around the world and pleased with the continued progress in our growth agenda.”

“In Q4, Starbucks delivered improved sequential results in both our Americas and China/Asia Pacific segments. We also further set the stage for increased benefits from our ongoing efforts to streamline the company,” said Scott Maw, cfo. “Each of these factors contributed to the record Q4 results we reported today and position us well for fiscal 2019 and beyond. As always, credit for Starbucks performance belongs to our store partners all around the world who proudly wear the green apron and deliver an elevated Starbucks Experience to our customers, every day.”

Fiscal 2018 Re-segmentation

In the fourth quarter of fiscal 2018, we realigned our organizational and operating segment structures in support of a newly established Global Coffee Alliance. The scope of the arrangement converts the majority of our previously defined Channel Development segment operations, as well as certain smaller businesses previously reported in the Americas, EMEA and All Other Segments, from company-owned to licensed operations with Nestlé. Our reportable segments have been restated as if those smaller businesses were previously within our Channel Development segment.

In addition, we combined All Other Segments and Unallocated Corporate into one non-reportable segment entitled Corporate and Other.

Further, in an effort to report operating expenses in line with the corresponding revenue-generating activities, we have changed the classification of certain costs, primarily within our CAP segment and mainly from other operating expenses to general and administrative expenses.

Concurrent with the change in reportable segments and realignment of certain operating expenses noted above, we revised our prior period financial information to be consistent with the current period presentation. There was no impact on consolidated net revenues, total operating expenses, operating income, or net earnings as a result of these changes.

We have posted additional details pertaining to these updates, including restated GAAP and non-GAAP P&Ls for FY17 and FY18, on the Supplemental Financial Data page of our Investor Relations website (http://investor.starbucks.com).

Consolidated operating income declined 6% to $956.6 million in Q4 FY18, down from $1,022.5 million in Q4 FY17. Consolidated operating margin declined 270 basis points to 15.2%, primarily driven by streamline-driven activities, including licensing our CPG and foodservice businesses to Nestlé following the close of the deal on August 26, 2018, the impact of our ownership change in East China at the end of Q1 FY18, and the sale of our Tazo brand in Q1 FY18. Additionally, operating margin was adversely impacted by higher investments in our store partners (employees), and food and beverage-related mix shifts, partially offset by sales leverage.Consolidated net revenues grew 11% over Q4 FY17 to $6.3 billion in Q4 FY18, primarily driven by incremental revenues from the impact of our ownership change in East China at the end of Q1 FY18, incremental revenues from 1,997 net new Starbucks store openings over the past 12 months, and 3% growth in global comparable store sales, partially offset by licensing our CPG and foodservice businesses to Nestlé following the close of the deal on August 26, 2018.

Net revenues for the China/Asia Pacific segment grew 41% over Q4 FY17 to $1,214.6 million in Q4 FY18, primarily driven by incremental revenues from the impact of our ownership change in East China at the end of Q1 FY18, incremental revenues from 756 net new store openings over the past 12 months, and a 1% increase in comparable store sales, partially offset by the absence of revenue related to the sale of our Singapore retail operations to a licensed partner in Q4 FY17.

Q4 FY18 operating income of $232.2 million grew 15% over Q4 FY17 operating income of $201.7 million. Operating margin declined 440 basis points to 19.1%, primarily due to the impact of our ownership change in East China at the end of Q1 FY18.

The company introduces the following fiscal year 2019 targets:Fiscal 2019 Targets

• Expects to add approximately 2,100 net new Starbucks stores globally
• Expects global comparable store sales growth near the lower end of our current 3% to 5% range
• Expects consolidated revenue growth of 5% to 7%
  • Includes approximately 2% net negative impact related to streamline-driven activities
• Expects GAAP EPS in the range of $2.32 to $2.37 and non-GAAP EPS in the range of $2.61 to $2.66

Please refer to the reconciliation of GAAP measures to non-GAAP measures at the end of this release.

STARBUCKS CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited, in millions, except per share data)
		Quarter Ended														Quarter Ended
		Sep 30, 2018					Oct 1, 2017					% Change				Sep 30, 2018				Oct 1, 2017
																As a % of total net revenues
Net revenues:
Company-operated stores		$	5,060.1				$	4,477.0				13.0	%			80.3	%			78.6	%
Licensed stores		683.6					617.6					10.7				10.8				10.8
Other		559.9					603.7					(7.3	)			8.9				10.6
Total net revenues		6,303.6					5,698.3					10.6				100.0				100.0
Cost of sales including occupancy costs		2,604.6					2,352.1					10.7				41.3				41.3
Store operating expenses		1,841.6					1,639.8					12.3				29.2				28.8
Other operating expenses		156.7					114.4					37.0				2.5				2.0
Depreciation and amortization expenses		326.6					255.4					27.9				5.2				4.5
General and administrative expenses		460.0					402.7					14.2				7.3				7.1
Restructuring and impairments		45.2					33.3					35.7				0.7				0.6
Total operating expenses		5,434.7					4,797.7					13.3				86.2				84.2
Income from equity investees		87.7					121.9					(28.1	)			1.4				2.1
Operating income		956.6					1,022.5					(6.4	)			15.2				17.9
Net gain resulting from divestiture of certain operations		2.9					83.9					(96.5	)			—				1.5
Interest income and other, net		36.2					67.7					(46.5	)			0.6				1.2
Interest expense		(63.8		)			(22.3		)			186.1				(1.0	)			(0.4	)
Earnings before income taxes		931.9					1,151.8					(19.1	)			14.8				20.2
Income tax expense		175.5					362.5					(51.6	)			2.8				6.4
Net earnings including noncontrolling interests		756.4					789.3					(4.2	)			12.0				13.9
Net earnings/(loss) attributable to noncontrolling interests		0.6					0.8					(25.0	)			—				—
Net earnings attributable to Starbucks		$	755.8				$	788.5				(4.1	)			12.0	%			13.8	%
Net earnings per common share - diluted		$	0.56				$	0.54				3.7	%
Weighted avg. shares outstanding - diluted		1,348.7					1,451.2
Cash dividends declared per share		$	0.36				$	0.30
Supplemental Ratios:
Store operating expenses as a % of company-operated store revenues																36.4	%			36.6	%
Other operating expenses as a % of non-company-operated store revenues																12.6	%			9.4	%
Effective tax rate including noncontrolling interests																18.8	%			31.5	%

		Year Ended													Year Ended
		Sep 30, 2018					Oct 1, 2017					% Change			Sep 30, 2018			Oct 1, 2017
															As a % of total net revenues
Net revenues:
Company-operated stores		$	19,690.3				$	17,650.7				11.6	%		79.7	%		78.8	%
Licensed stores		2,652.2					2,355.0					12.6			10.7			10.5
Other		2,377.0					2,381.1					(0.2	)		9.6			10.6
Total net revenues		24,719.5					22,386.8					10.4			100.0			100.0
Cost of sales including occupancy costs		10,174.5					9,034.3					12.6			41.2			40.4
Store operating expenses		7,193.2					6,493.3					10.8			29.1			29.0
Other operating expenses		539.3					500.3					7.8			2.2			2.2
Depreciation and amortization expenses		1,247.0					1,011.4					23.3			5.0			4.5
General and administrative expenses		1,759.0					1,450.7					21.3			7.1			6.5
Restructuring and impairments		224.4					153.5					46.2			0.9			0.7
Total operating expenses		21,137.4					18,643.5					13.4			85.5			83.3
Income from equity investees		301.2					391.4					(23.0	)		1.2			1.7
Operating income		3,883.3					4,134.7					(6.1	)		15.7			18.5
Gain resulting from acquisition of joint venture (1)		1,376.4					—					nm			5.6			—
Net gain resulting from divestiture of certain operations (2)		499.2					93.5					nm			2.0			0.4
Interest income and other, net		191.4					181.8					5.3			0.8			0.8
Interest expense		(170.3		)			(92.5		)			84.1			(0.7	)		(0.4	)
Earnings before income taxes		5,780.0					4,317.5					33.9			23.4			19.3
Income tax expense		1,262.0					1,432.6					(11.9	)		5.1			6.4
Net earnings including noncontrolling interests		4,518.0					2,884.9					56.6			18.3			12.9
Net earnings/(loss) attributable to noncontrolling interests		(0.3		)			0.2					nm			—			—
Net earnings attributable to Starbucks		$	4,518.3				$	2,884.7				56.6			18.3	%		12.9	%
Net earnings per common share - diluted		$	3.24				$	1.97				64.5	%
Weighted avg. shares outstanding - diluted		1,394.6					1,461.5
Cash dividends declared per share		$	1.32				$	1.05
Supplemental Ratios:
Store operating expenses as a % of company-operated store revenues															36.5	%		36.8	%
Other operating expenses as a % of non-company-operated store revenues															10.7	%		10.6	%
Effective tax rate including noncontrolling interests															21.8	%		33.2	%

(1)		Represents the gain resulting from the acquisition of our East China joint venture.
(2)		Primarily includes the gains on the sales of our Tazo brand and Taiwan joint venture for $347.9 million and $156.6 million, respectively, in FY18. FY17 primarily represents the gain on the sale of our Singapore retail operations of $83.9 million.

China/Asia Pacific (CAP)
		Sep 30, 2018					Oct 1, 2017					% Change				Sep 30, 2018				Oct 1, 2017
Quarter Ended																As a % of CAP total net revenues
Net revenues:
Company-operated stores		$	1,119.3				$	770.0				45.4	%			92.2	%			89.5	%
Licensed stores		93.0					88.7					4.8				7.7				10.3
Other		2.3					1.2					91.7				0.2				0.1
Total net revenues		1,214.6					859.9					41.2				100.0				100.0
Cost of sales including occupancy costs		509.3					370.2					37.6				41.9				43.1
Store operating expenses		313.4					226.6					38.3				25.8				26.4
Other operating expenses		4.3					3.8					13.2				0.4				0.4
Depreciation and amortization expenses		116.1					53.3					117.8				9.6				6.2
General and administrative expenses		65.8					62.9					4.6				5.4				7.3
Total operating expenses		1,008.9					716.8					40.8				83.1				83.4
Income from equity investees		26.5					58.6					(54.8	)			2.2				6.8
Operating income		$	232.2				$	201.7				15.1	%			19.1	%			23.5	%
Supplemental Ratios:
Store operating expenses as a % of company-operated store revenues																28.0	%			29.4	%
Other operating expenses as a % of non-company-operated store revenues																4.5	%			4.2	%
Year Ended
Net revenues:
Company-operated stores		$	4,096.9				$	2,906.0				41.0	%			91.6	%			89.7	%
Licensed stores		365.7					327.4					11.7				8.2				10.1
Other		11.0					6.8					61.8				0.2				0.2
Total net revenues		4,473.6					3,240.2					38.1				100.0				100.0
Cost of sales including occupancy costs		1,898.3					1,396.2					36.0				42.4				43.1
Store operating expenses		1,148.7					845.5					35.9				25.7				26.1
Other operating expenses		22.9					21.2					8.0				0.5				0.7
Depreciation and amortization expenses		412.1					202.2					103.8				9.2				6.2
General and administrative expenses		241.6					207.1					16.7				5.4				6.4
Total operating expenses		3,723.6					2,672.2					39.3				83.2				82.5
Income from equity investees		117.4					197.0					(40.4	)			2.6				6.1
Operating income		$	867.4				$	765.0				13.4	%			19.4	%			23.6	%
Supplemental Ratios:
Store operating expenses as a % of company-operated store revenues																28.0	%			29.1	%
Other operating expenses as a % of non-company-operated store revenues																6.1	%			6.3	%