Solution
Banasree answered on
Nov 23 2023
Financial Performance review.
Seattle-based Sta
ucks (SBUX) began its story as a one-stop shop supplier of coffee beans and coffee makers in 1971. Howard Schultz joined the company in 1982 and expanded its distribution to include restaurants, coffee bars, and stores cleared Sta
ucks when it failed to serve it coffee and other beverages. After leaving, he ran a chain of coffee bars throughout Seattle called Giornale. The wineries were modeled after the wineries he visited in Italy. In 1987, Schultz purchased Sta
ucks and named all of its locations under the Sta
ucks banner. The company popularized its specialty coffee and expanded licensing and distribution. Sta
ucks also gave birth to several popular drink
ands such as Teavana, Tazo, Ethos, Frappuccino and La Boulange. Sta
ucks has now grown into a global company that operates more than 33,250 stores in about 78 countries.
Revenue:
Generally, the Company’s fiscal year runs from October 1 through September 30 of each year. For the full year ending September 30, 2021, Sta
ucks reported full-year annual revenue of $29.1 billion, with the majority of revenue coming from company-operated stores (DAVID KINDNESS, 2022). This is an increase of 23.5% over the same period in 2020. But of course, in 2020 with the COVID-19 lockdowns global revenues took a hit (compared to $26.5 billion in fiscal year 2019 in).
Equity Capitalization:
As of fiscal year 2021, Sta
ucks had 1.18 billion fully diluted shares outstanding, with a market cap of $137.85 billion as of November 8, 2021. At a fully diluted earnings per share basis earnings per share (EPS) of $3.54 and shares selling for $117 . This gives the company shares a forward P/E of 34x (and a trailing P/E of 33x). When the company reported its 2021 earnings, it announced it would begin a share buyback program, increasing its dividend and returning more than $20 billion a year to shareholders by 2024 (DAVID KINDNESS, 2022).
Debt Capitalization:
Since the 2019 financial year, the company’s bo
owings have increased significantly. Before 2020, Sta
ucks’ short-term debt was relatively low. However, in the midst of the COVID-19 pandemic, this number increased significantly in 2020 and continued to increase in 2021 (from just $5 million in 2019 to $2.3 billion in 2021). Similarly, long-term debt increased over the...