Strong Sales in Asia-Pacific and China Drive Starbucks’s Revenue



Revenue sources

Starbucks (SBUX) has classified its operations into five categories: Americas, China and Asia-Pacific (or CAP), EMEA (Europe, the Middle East, and Africa), channel development, and all other segments. In fiscal 4Q16, Starbucks’s Americas revenue formed 69.5% of its total revenue, while CAP, channel development, and EMEA formed 14.7%, 9.1%, and 4.7%, respectively.

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4Q16 revenue

Starbucks posted revenue of $5.7 billion, which represents a growth of 16.2% from the $4.9 billion reported in fiscal 4Q15. The revenue growth was driven by positive SSSG (same-store sales growth) and unit growth in the last 12 months.

Revenue from the Americas segment rose 17.3% to $4 billion. The SSSG of 5% and the addition of 804 new restaurants in the last 12 months drove revenue from the Americas segment. The CAP segment posted revenue growth of 28.7%, driven by SSSG of 1% and the addition of 981 new restaurants.

However, revenue from the EMEA region fell 12.4% in the quarter, due to SSSG of -1% and refranchising. The company operated 214 fewer company-owned restaurants in the EMEA region than it did in 4Q15. Strengthening of the US dollar also contributed towards the decline in revenue from this segment.

The channel development segment posted revenue of $518.5 million, which represents a growth of 13.5%. The revenue growth was driven by strong sales of K-Cups and the launch of new items, such as Fall Blend and Caffè Latte K-Cups. Starbucks’s and PepsiCo’s (PEP) North American Coffee Partnership contributed to the revenue growth by increasing its market share in the liquid coffee and energy segment through strong performance from the Doubleshot Frappuccino.

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Peers comparisons

During the same period, Dunkin’ Brands (DNKN), Domino’s Pizza (DPZ), and McDonald’s (MCD) saw their revenue rise -1.3%, 5.2%, and -2.9%, respectively.


During fiscal 2017, analysts are expecting Starbucks to post revenue of $23.1 billion, which represents a growth of 8.2% from $21.3 billion. The revenue growth is expected to be driven by the addition of 1,880 new restaurants, and positive SSSG. Next, we’ll discuss Starbucks’s SSSG.


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