Starbucks 2008 Annual Report
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Fiscal 2008 Financial Highlights Stores Open at Fiscal Year End Net Revenues (IN BILLIONS) & (COMPANY-OPERATED AND LICENSED STORES) Net Revenue Growth (PERCENTAGES) from Previous Year $10.4 16,680 International $9.4 10% 15,011 United States 21% $7.8 12,440 22% 10,241 $6.4 20% 8,569 $5.3 7,225 $4.1 30% 24% 2003 2004 2005 2006 2007 2008 2003 2004 2005 2006 2007 2008 Components of 2008 Revenue Operating Income (IN MILLIONS) & Operating Margin (PERCENTAGES) Retail 84% $1,054 Licensing 12% $894 Foodservice & Other 4% $781 $606 2008 Revenue Breakdown $504* 12.3% 11.2% $421 United States 76% 11.5% 11.5% International 20% 10.3% 4.9% Global Consumer 4% Products Group 2003 2004 2005 2006 2007 2008 2008 Leadership Conference Commitment Wall Comparable Store Sales Net Earnings (IN MILLIONS) & Our store partners are deeply vested in our future success. Never has this fact been more evident than (COMPANY-OPERATED STORES OPEN 13 MONTHS OR LONGER) Return on Equity (PERCENTAGES) $673 at the 2008 Leadership Conference in New Orleans. Approximately 10,000 store partners made a personal commitment to reengage with their customers and their communities. These collective promises, $564 handwritten on a “Commitment Wall,” stand as a testament to the managers’ resolve and dedication. $494 10% While in New Orleans, store managers also volunteered 60,000 hours of community service—another $389 8% 8% 29% powerful symbol of their commitment and of great things to come. 7% $315* $265 5% 25% To minimize our environmental impact, the Starbucks Corporation Fiscal 2008 Annual Report, excluding 20% the 10-K section, was printed on paper manufactured from 100% post-consumer recycled fi bers, 17% 13% certifi ed Processed Chlorine Free (PCF), with 100% of the electricity involved in printing offset by certifi ed 14% windpower certifi cates. We’ll keep looking for ways to further reduce our environmental footprint. 2003 2004 2005 2006 2007 2008 2003 2004 2005 2006 2007 2008 Starbucks Corporation Fiscal 2008 Annual Report – 3% © 2008 Starbucks Corporation. All rights reserved. SJBQ209OTH-00367 *Includes $267 million in pretax restructuring charges 55204c1.indd204c1.indd 1 11/13/09/13/09 22:51:13:51:13 PMPM Fiscal 2008 Financial Highlights Stores Open at Fiscal Year End Net Revenues (IN BILLIONS) & (COMPANY-OPERATED AND LICENSED STORES) Net Revenue Growth (PERCENTAGES) from Previous Year $10.4 16,680 International $9.4 10% 15,011 United States 21% $7.8 12,440 22% 10,241 $6.4 20% 8,569 $5.3 7,225 $4.1 30% 24% 2003 2004 2005 2006 2007 2008 2003 2004 2005 2006 2007 2008 Components of 2008 Revenue Operating Income (IN MILLIONS) & Operating Margin (PERCENTAGES) Retail 84% $1,054 Licensing 12% $894 Foodservice & Other 4% $781 $606 2008 Revenue Breakdown $504* 12.3% 11.2% $421 United States 76% 11.5% 11.5% International 20% 10.3% 4.9% Global Consumer 4% Products Group 2003 2004 2005 2006 2007 2008 2008 Leadership Conference Commitment Wall Comparable Store Sales Net Earnings (IN MILLIONS) & Our store partners are deeply vested in our future success. Never has this fact been more evident than (COMPANY-OPERATED STORES OPEN 13 MONTHS OR LONGER) Return on Equity (PERCENTAGES) $673 at the 2008 Leadership Conference in New Orleans. Approximately 10,000 store partners made a personal commitment to reengage with their customers and their communities. These collective promises, $564 handwritten on a “Commitment Wall,” stand as a testament to the managers’ resolve and dedication. $494 10% While in New Orleans, store managers also volunteered 60,000 hours of community service—another $389 8% 8% 29% powerful symbol of their commitment and of great things to come. 7% $315* $265 5% 25% To minimize our environmental impact, the Starbucks Corporation Fiscal 2008 Annual Report, excluding 20% the 10-K section, was printed on paper manufactured from 100% post-consumer recycled fi bers, 17% 13% certifi ed Processed Chlorine Free (PCF), with 100% of the electricity involved in printing offset by certifi ed 14% windpower certifi cates. We’ll keep looking for ways to further reduce our environmental footprint. 2003 2004 2005 2006 2007 2008 2003 2004 2005 2006 2007 2008 Starbucks Corporation Fiscal 2008 Annual Report – 3% © 2008 Starbucks Corporation. All rights reserved. SJBQ209OTH-00367 *Includes $267 million in pretax restructuring charges 55204c1.indd204c1.indd 1 11/13/09/13/09 22:51:13:51:13 PMPM SCHEDULED RELEASE DATE: STARBUCKS VISUAL USE ONLY SJBQ209OTH-00367 DATE: 1-5-2009 9:26 AM LAYOUT: PP4 None JOB NUMBER: SJBQ209OTH-00367 JOB NAME: Annual Report 10K Wrap See OK OK with Needs Initials Prev AS-IS Changes Changes INTERNAL ROUTING: Project Owner ______________ Copy Manager ______________ Print Scale: 72.94% Copywriter ______________ Job Number Layout Date Creative Director ______________ SJBQ209OTH-00367 PP4 1-5-2009 9:26 AM Design Manager ______________ Job Name: Annual Report 10K Wrap Prepress: Melody Grieves IMPORTANT NOTES: Ink Name: Designer ______________ Client: None File Name: SJBQ209OTH-00367 AR10KWrap.indd None Cyan Designer ______________ Proj Owner: Andreea Niculescu ID Version: CS3 Magenta Proofreader ______________ Proj Spec: Isaac Kern Trim: 21.75" x 9.5" Yellow Creative Mgr: Mike Peck Bleed: 22.25" x 10" Melody Grieves Black Prepress ______________ Designer: Anasazi Mendoza Part #: None Writer: Ethan Johnson SKU #: None Spot black Print Production ______________ Print Buyer: Sheryl Saks UPC: None for text Regulatory ______________ Photo Illustr: None Usage Rights: None ___________________ ______________ IMPORTANT NOTE: This proof is for content/design and not color. Color displayed on a Canon CLC proof is simulated ___________________ ______________ and does not represent the true color. Proofi ng for color can be done only on a contract proof from vendor. T:21.75” Dear Shareholders, Market Information Board of Directors and Senior Offi cers When we brought 10,000 partners together in New Orleans last October, Starbucks was at a crossroads. makes the Clover® brewer, a state-of-the-art single-cup brewing system that allows us to serve the best cup of The company’s common stock is traded on the NASDAQ Global Select Board of Directors Market (“NASDAQ”), under the symbol SBUX. The following table Howard Schultz Starbucks Corporation, chairman, president and chief executive officer We had just completed a very diffi cult fi scal 2008, and after 16 years of continuous growth as a public brewed coffee available anywhere. Our customers also told us they are looking to Starbucks for more in the health shows the quarterly high and low closing prices of the common stock as reported by NASDAQ for each quarter during the last two fiscal years. Barbara Bass Gerson Bakar Foundation, president ™ company, we were for the fi rst time talking about slowing growth, store closures and cost reductions. and wellness space, and in response, we launched our nutritious Vivanno Nourishing Blends and extended our William W. Bradley Allen & Company LLC, managing director Consumer confi dence was approaching all-time lows, and both Wall Street and Main Street were reeling. breakfast platform with choices like Perfect Oatmeal, one of our most successful food introductions ever. September 28, 2008: High Low Mellody Hobson Ariel Investments, LLC, president Fourth Quarter $16.92 $13.58 Olden Lee PepsiCo, Inc., retired executive Third Quarter 18.60 15.66 James G. Shennan, Jr. Trinity Ventures, general partner emeritus In the face of these challenges, we made what many believed to be a controversial decision to invest in our Not surprisingly, our customers have asked us to reward their loyalty and provide value, and we did just that through Second Quarter 20.47 16.80 Javier G. Teruel Colgate-Palmolive Company, retired vice chairman people. For me, the decision was obvious. The core of our brand and of our success for more than three our Starbucks Rewards program. Value continues to be key to meeting the needs of our customers, and we have our First Quarter 26.84 20.03 Myron E. Ullman, III J.C. Penney Company, Inc., chairman and chief executive officer decades has been our partners. Our future growth depends on them, and on staying true to the values that sights set on more ways to provide it—all while not diminishing our brand, which stands for quality above all else. September 30, 2007: Craig E. Weatherup Pepsi-Cola Company, retired chief executive officer made Starbucks the world-class brand it is today. Fourth Quarter $28.29 $25.87 Our customers have consistently expressed that they want to be part of something bigger. And to that end, we Third Quarter 31.84 25.54 Senior Officers Second Quarter 36.29 29.32 Howard Schultz chairman, president and chief executive officer At our Leadership Conference, we asked our partners to make a commitment to doing business in a new First Quarter 39.43 33.62 worked diligently to tell the world exactly what kind of company Starbucks is, and has always been. We launched Clifford Burrows president, Starbucks Coffee U.S. way. (What you see on the cover of this report is the Commitment Wall—which 10,000 partners from all over Starbucks™ Shared Planet,™ our platform for delivering on commitments to the ethical sourcing of coffee, Martin Coles president, Starbucks Coffee International The company’s U.S. Securities and Exchange Commission filings may North America signed.) We asked them to operate their stores as if they the environment and the communities we serve. We established signifi cant partnerships with Fair Trade and be obtained without charge by accessing the Investor Relations section Arthur Rubinfeld president, Global Development of the company’s website at http://investor.starbucks.com, at sec.gov, Troy Alstead executive vice president, chief financial officer and chief administrative officer were their own businesses, to deliver an experience that would engage (PRODUCT) RED™–both names that infl uence consumer purchasing behavior in a signifi cant way.