Starbucks Investor Relations

Financial Release

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Starbucks Reports Record Fourth Quarter and Fiscal 2001 Results
Annual Systemwide Retail Store Sales Increase 31% to $3.0 Billion; Targets 10,000 Stores by Fiscal Year End 2005

Starbucks Corporation (Nasdaq:SBUX) today announced record revenues and earnings for the fourth quarter and fiscal 2001. Additionally, fiscal 2001 marks Starbucks 10th consecutive year of comparable stores sales growth of 5 percent or greater.
For the fourth quarter ended September 30, 2001, consolidated net revenues increased 18 percent to $690 million from $584 million for the fourth quarter of fiscal 2000. Retail revenues increased 20 percent to $585 million and specialty revenues increased 8 percent to $105 million. Comparable store sales increased 2 percent as compared with the fourth quarter of fiscal 2000.
Systemwide retail store sales, which include net revenues for both company-operated and licensed retail stores, increased 27 percent to $795 million for the fourth quarter of fiscal 2001 from $625 million for the same period in fiscal 2000.
Net earnings for the 13-week period ended September 30, 2001, increased significantly to $53.2 million from $1.5 million for the same period in fiscal 2000. In the prior period, the Company recorded a non-cash charge for other than temporary losses on Internet-related investments. Excluding the non-cash charge, net earnings increased 22 percent from the comparable 13-week period ended October 1, 2000. There were no similar non-cash charges in the fourth fiscal quarter of 2001. Diluted earnings per share were $0.14 for the fourth quarter of 2001.
For the 52 weeks ended September 30, 2001, consolidated net revenues increased 22 percent to $2.6 billion from $2.2 billion for the same period in fiscal 2000. Retail revenues increased 22 percent to $2.2 billion, and specialty revenues increased 18 percent to $419 million. Comparable store sales for the 52-week period ended September 30, 2001 increased 5 percent as compared to the same 52-week period in fiscal 2000.
Systemwide retail store sales increased 31 percent to $3.0 billion for the 52 weeks ended September 30, 2001 from $2.3 billion for the same period in fiscal 2000.
Net earnings increased 92 percent to $181.2 million for the 52-week period ended September 30, 2001, which is the highest reported net earnings figure in the Company's history, compared to $94.6 million for the same period in fiscal 2000. Diluted earnings per share were $0.46 for the 52-week period ended September 30, 2001 compared to a split-adjusted $0.24 for the same period in fiscal 2000.

The Company further announced the following fiscal 2002 goals:


-- On a global basis, the Company plans to open at least 1,200 new stores in fiscal 2002. In North America, the Company plans to open at least 525 company-operated locations and 300 licensed locations. Internationally, the Company plans to open at least 100 locations in company-operated markets and 275 locations in licensed markets;
-- The Company expects total revenue growth of approximately 20 percent and comparable store sales growth in the low single digits, with monthly anomalies in fiscal 2002;
-- The company is targeting approximately 25 percent earnings per share growth in the first half of fiscal year 2002 plus an additional $0.02 per share in the first quarter of fiscal 2002 due to the capital gain on the sale of shares in conjunction with Starbucks Coffee Japan's initial public offering on October 10, 2001. In an effort to be cautious in an uncertain economic environment, the company is targeting 10-15 percent earnings per share growth in the second half of fiscal year 2002.
-- The Company is expecting fiscal year 2002 earnings per share to be in the range of $0.54 to $0.55, including the capital gain mentioned above.

Looking beyond the current fiscal year, the Company is targeting 20-25 percent revenue growth for fiscal 2003 through fiscal 2005 and more than 10,000 stores by fiscal year end 2005.





STORE INFORMATION

Net stores opened
During the
52 weeks ended Stores open as of
Sept. 30, 2001 Sept. 30, 2001
-------------- --------------
Continental North America:
Company-Operated Stores 525 2,971
Licensed Stores 279 809
--- ---
804 3,780
International:
Company-Operated Stores 122 295
Licensed Stores 282 634
--- ---
404 929

Total 1,208 4,709
===== =====



The Company will be holding a conference call today at 1:30 p.m. Pacific time, which will be hosted by Howard Schultz, chairman and chief global strategist, Orin Smith, president and chief executive officer and Michael Casey, executive vice president and chief financial officer.
The call will be broadcast live over the Internet and can be accessed at http://www.starbucks.com/aboutus/investor.asp. A replay of the call will be available from approximately 4:00 p.m. Pacific time today through 4:00 p.m. Pacific time on Thursday, November 22, 2001 by calling 800/633-8284, reservation number 19539127 or by accessing it via the Company's website at http://www.starbucks.com/aboutus/investor.asp.

This release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements, including anticipated store openings, trends in, or expectations regarding, the Company's operations and financial results, are based on currently available operating, financial and competitive information and are subject to various risks and uncertainties. Actual future results and trends may differ materially depending on a variety of factors, including, but not limited to, coffee and other raw material prices and availability, successful execution of internal performance and expansion plans, the effect of slowing U.S. and international economies, the economic ramifications of the September 11th terrorist attack and the military response thereto, the impact of competition, the effect of legal proceedings, and other risks detailed in the Company's filings with the Securities and Exchange Commission.
Starbucks Coffee Company is the leading retailer, roaster and brand of specialty coffee in the world. In addition to its more than 4,700 retail locations in North America, Europe, the Pacific Rim and the Middle East, Starbucks sells coffee and tea products through its specialty operations, including its online store at www.starbucks.com. Additionally, Starbucks produces and sells bottled Frappuccino(R) coffee drink and a line of superpremium ice creams through its joint venture partnerships. The Company's other brands enhance the Starbucks Experience through best-of-class products: Tazo Tea Company offers a line of innovative premium teas, and Hear Music produces and distributes a line of exceptional compact discs.



CONSOLIDATED STATEMENT OF EARNINGS



Three Months Ended Three Months Ended
------------------ ------------------
Sept. 30, Oct. 1, Sept. 30, Oct. 1,
2001 2000 2001 2000
(13 weeks)(13 weeks) (13 weeks)(13 weeks)
------------------ ------------------
Systemwide retail store
sales(a) $795,000 $625,000

Net revenues
Retail $584,990 $487,075 84.8% 83.4%
Specialty 104,546 97,023 15.2% 16.6%
---------- ---------- ------ ------
Total net revenues 689,536 584,098 100.0% 100.0%

Cost of sales
and related occupancy 278,037 252,865 40.3% 43.3%
Store operating expense 230,561 185,926 (b)39.4% (b)38.2%
Other operating expense 25,060 22,829 (c)24.0% (c)23.5%
Depreciation and
amortization 45,458 35,731 6.6% 6.1%
General and administrative 38,455 27,386 5.6% 4.7%

Joint venture income 10,911 8,745 1.6% 1.5%
---------- ----------
Operating income 82,876 68,106 12.0% 11.7%

Interest/other income, net 1,645 1,899 0.2% 0.3%
Non-cash Internet-related
investment losses 0 58,792 0.0% 10.1%
---------- ---------- ------ ------
Earnings before income
taxes 84,521 11,213 12.2% 1.9%
Income taxes 31,273 9,717 4.5% 1.6%
---------- ---------- ------ ------
Net earnings $53,248 $1,496 7.7% 0.3%
========== ==========

Earnings per share-diluted $0.14 $0.00
Shares used in calculation 393,565 390,588

(a) Systemwide retail store sales include net revenues for both
Company-operated and licensed retail stores.

(b) Calculated as a percentage of retail revenues.

(c) Calculated as a percentage of specialty revenues.


CONSOLIDATED STATEMENT OF EARNINGS

Twelve Months Ended Twelve Months Ended
------------------- -------------------
Sept. 30, Oct. 1, Sept. 30, Oct. 1,
2001 2000 2001 2000
(52 weeks) (52 weeks) (52 weeks)(52 weeks)
---------- ---------- --------------------

Systemwide retail store
sales(a) $2,950,000 $2,250,000

Net revenues
Retail $2,229,594 $1,823,607 84.2% 83.7%
Specialty 419,386 354,007 15.8% 16.3%
---------- ---------- ------ ------
Total net revenues 2,648,980 2,177,614 100.0% 100.0%

Cost of sales
and related occupancy 1,112,785 961,885 42.0% 44.2%
Store operating expense 875,473 704,898 (b)39.3% (b)38.7%
Other operating expense 93,326 78,445 (c)22.3% (c)22.2%
Depreciation and
amortization 163,501 130,232 6.2% 6.0%
General and administrative 151,416 110,202 5.7% 5.1%

Joint venture income 28,615 20,300 1.1% 0.9%
---------- ----------
Operating income 281,094 212,252 10.6% 9.7%

Interest/other income, net 10,768 7,110 0.4% 0.3%
Non-cash Internet-related
investment losses 2,940 58,792 0.1% 2.7%
---------- ---------- ------ ------
Earnings before income
taxes 288,922 160,570 10.9% 7.3%
Income taxes 107,712 66,006 4.1% 3.0%
---------- ---------- ------ ------
Net earnings $181,210 94,564 6.8% 4.3%
========== ==========

Earnings per share-diluted $0.46 $0.24
Shares used in calculation 394,349 385,999

(a) Systemwide retail store sales include net revenues for both
Company-operated and licensed retail stores.

(b) Calculated as a percentage of retail revenues.

(c) Calculated as a percentage of specialty revenues.

Selected Balance Sheet Data (in millions): Sept. 30, Oct. 1,
------------------------------------------ 2001 2000

Cash and Short-term Investments $ 221 $ 132
Long-term Debt $ 6 $ 7
Equity $ 1,376 $ 1,148




Contact Information:
Tracy Moran
Starbucks Investor Relations
(206) 318-7806