Starbucks, the iconic coffee chain known and loved around the world, has just released its unfiltered financial results for Q2 2023 (ending July 2) and Q2 2022 (ending July 3), laying bare the company’s financial dynamics in an uncompromised fashion.
These unaudited financial revelations, detailed in billions except per-share data, serve as a lucid telescope, offering us a panoramic view of the firm’s fiscal growth, facilitating a comparison between the two successive years.
Q2 2023: An Impressive Display of Financial Strength
Starbucks posted a total net revenue of a staggering $9.168 billion for Q2 2023, a healthy surge of 12.5% from last year’s Q2 figure of $8.150 billion. The main pillar supporting this impressive revenue was the firm’s company-operated stores. They generated a robust $7.557 billion, making up 82.4% of the total net revenues – a remarkable 13.2% spike from the $6.676 billion witnessed in Q2 2022.
Meanwhile, licensed stores contributed $1.136 billion to the revenue pool, forming 12.4% of the total net revenues. The ‘Other’ segment, however, saw a slight downturn, slipping by 8.2% compared to Q2 2022 to settle at $0.475 billion.
As for operating expenses, Starbucks registered $7.654 billion in Q2 2023, a 10.8% climb from $6.909 billion in Q2 2022. This uptick primarily came from store operating expenses, which hit $3.698 billion, and product and distribution costs amounting to $2.864 billion.
Despite the increase in operational costs, Starbucks enjoyed a substantial swell in operating income, clocking a 22.3% growth from $1.296 billion in Q2 2022 to $1.584 billion in Q2 2023. Consequently, even after factoring in an elevated interest expense of $0.141 billion, the earnings before taxes came in at $1.464 billion, reflecting a robust 22.8% increase from last year. Post-tax, Starbucks proudly announced a net earning of $1.142 billion, up by a significant 25.1% from the preceding year.
Shareholders had reasons to smile as the earnings per share (diluted) climbed by 25.3% to $0.99, and the declared dividends per share were $0.53.
First Three Quarters of 2023: A Winning Streak Continues
Diving deeper, the total net revenues for the first three quarters ending on July 2, 2023, were recorded at $26.602 billion, a sturdy increase of 11.6% over the corresponding period in 2022.
During this period, product and distribution costs accrued to $8.476 billion, while store operating expenses grew by 9.8% year-on-year to hit $10.999 billion. The operating income for this period was robust at $4.165 billion, marking a 21.7% increase compared to the same period in 2022.
The net earnings attributable to Starbucks for the first three quarters of 2023 was a whopping $2.905 billion, up by 20.9% from the $2.403 billion earned during the same period in the previous year. The diluted earnings per share experienced a strong growth of 21.7%, settling at $2.52, while the declared dividends per share for this period amounted to $1.59.
Segment Analysis: Starbucks’s Continual Success
Focusing on North America, company-operated stores experienced a 10.3% boost in revenue in Q2 2023, amounting to $6.081 billion. Licensed stores also enjoyed a 20.5% rise in earnings, resulting in a $0.656 billion revenue. The region’s operating income for the quarter was an impressive $1.464 billion, a 10.1% increase compared to the same period the previous year.
In summary, Starbucks demonstrated significant financial growth during the second quarter and the first three quarters of 2023, with considerable upswings in net revenues and earnings. The healthy growth trajectory of both company-operated and licensed stores is testament to Starbucks’s prowess in holding its ground in the highly competitive global coffee industry.
