What Drove Starbucks’s Revenue in Fiscal 2017?
Fiscal 2017 revenue
In fiscal 2017, Starbucks (SBUX) posted revenue of $22.39 billion, which represents growth of 5.0% from its $21.32 billion in fiscal 2016. The revenue growth was driven by the addition of new restaurants, positive SSSG (same-store sales growth), and an increase in revenue from channel development and other segments.
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Revenue growth across segments
Company-operated restaurants: In fiscal 2017, company-operated restaurants posted revenue of $11.79 billion, which represents growth of 4.8% from its $12.98 billion in 2016. The revenue growth was driven by the addition of 768 new company-owned restaurants, which contributed $869 million. Positive SSSG of 3.0% contributed $496 million. However, some of the revenue growth was offset by the absence of the 53rd week of operation in fiscal 2017, refranchising, and an unfavorable currency exchange. Compared to 53 weeks of fiscal 2016, the segment saw 52 weeks in fiscal 2017, which lowered revenue from the segment by $324 million. The refranchising of company-owned restaurants decreased the segment’s revenue by $121 million while unfavorable foreign currency exchange lowered the company’s revenue by $70 million.
Franchised restaurants: The revenue from franchised restaurants rose 9.3% to $2.36 billion during the fiscal year. Revenue growth was driven by growth in the sale of products to franchised restaurants and resulting royalties. The addition of 1,552 new franchised restaurants and positive SSSG increased the sale of products to franchised restaurants and associated royalties. However, the absence of the 53rd week lowered the segment’s revenue by $41 million, while an unfavorable currency exchange reduced the company’s revenue by $27 million.
CPG, foodservice and other: During the fiscal year, the segment posted revenue of $2.38 billion, which represents growth of 2.7% from $2.32 billion in fiscal 2016. Sales from international channels contributed $35 million, while the increase in US packaged coffee sales contributed $23 million to the fiscal 2017 revenue. However, the absence of week 53 lowered the segment’s revenue by $47 million, and unfavorable revenue deduction adjustments lowered the revenue by $13 million.
Next, we’ll look at Starbucks’s fiscal 2017 same-store sales growth.