Starbucks Annual Report 2008

Only available on StudyMode
  • Download(s) : 293
  • Published : November 3, 2009
Open Document
Text Preview
Starbucks Corporation Fiscal 2008 Annual Report

Fiscal 2008 Financial Highlights
Stores Open at Fiscal Year End
(COMPANY-OPERATED AND LICENSED STORES)

Net Revenues (IN BILLIONS) & Net Revenue Growth (PERCENTAGES) from Previous Year 16,680 $9.4 $7.8 $6.4 $5.3 $4.1 24% 30% 20% 22% 21%

$10.4
10%

International United States

15,011 12,440 10,241

8,569 7,225

2003

2004

2005

2006

2007

2008

2003

2004

2005

2006

2007

2008

Components of 2008 Revenue Retail Licensing Foodservice & Other 84% 12% 4%

Operating Income (IN MILLIONS) & Operating Margin (PERCENTAGES) $1,054 $894 $781 $606

2008 Revenue Breakdown $421 United States International Global Consumer Products Group 76% 20% 4% 2003 2004 11.5%

12.3% 11.5%

11.2%

$504*

10.3%

4.9% 2005 2006 2007 2008

Comparable Store Sales
(COMPANY-OPERATED STORES OPEN 13 MONTHS OR LONGER)

Net Earnings (IN MILLIONS) & Return on Equity (PERCENTAGES) $564 $494 $673

10% $389 8% 8% 7% $265 5%
20% 17% 14% 2003 2004 2005 2006 2007 2008 2003 2004 2005 2006 2007 13% 2008 25% 29%

$315*

– 3% *Includes $267 million in pretax restructuring charges

Dear Shareholders,
When we brought 10,000 partners together in New Orleans last October, Starbucks was at a crossroads. We had just completed a very difficult fiscal 2008, and after 16 years of continuous growth as a public company, we were for the first time talking about slowing growth, store closures and cost reductions. Consumer confidence was approaching all-time lows, and both Wall Street and Main Street were reeling. In the face of these challenges, we made what many believed to be a controversial decision to invest in our people. For me, the decision was obvious. The core of our brand and of our success for more than three decades has been our partners. Our future growth depends on them, and on staying true to the values that made Starbucks the world-class brand it is today. At our Leadership Conference, we asked our partners to make a commitment to doing business in a new way. (What you see on the cover of this report is the Commitment Wall—which 10,000 partners from all over North America signed.) We asked them to operate their stores as if they were their own businesses, to deliver an experience that would engage our customers and to get involved with their communities as never before. We also introduced them to new tools and technology we knew they needed to meet these objectives. Most important, we reenergized our partners and sent them back to their stores to deliver results. Our store partners are now better equipped to operate in a different environment, with a renewed focus on what has defined Starbucks for all these years: our coffee, our customers, our stores and the communities we serve. Starbucks, too, is ready for the realities of today’s difficult business environment, with a relentless focus on remaining true to who we are and on our responsibility to shareholders. While the year presented us—along with most other retailers—with significant challenges, it also gave us the best evidence yet that the Starbucks brand remains relevant and powerful, and that our customers remain loyal and invested in our success. In spite of the economy, as I write this, Starbucks business fundamentals are strong: we have more than 160,000 partners who handle approximately 50 million transactions every week in our nearly 17,000 stores in 49 countries. We generate strong cash flow and have solid liquidity, and we are executing rigorous cost-containment initiatives to improve our bottom line. We have a differentiated and diversified revenue mix, including consumer packaged goods (CPG) and foodservice and licensed stores businesses, as well as the Seattle’s Best Coffee brand. Our profitable CPG business is expanding internationally, and the ready-to-drink piece of that business is steadily gaining market share around the world. Customers purchased nearly half a million Starbucks Gold...
tracking img