Starbucks Corporation 10-K Summary
Business Context and Reporting Period
This Annual Report on Form 10-K covers the fiscal year ended October 1, 2000. Starbucks Corporation operates as a leading retailer of high-quality coffee and related products, primarily through company-operated retail stores, supplemented by specialty operations including licensing, wholesale accounts, and joint ventures. The company's strategy focuses on rapid expansion of retail operations and brand leverage through new products and distribution channels.
Key Financial Metrics and Operational Data
Specific revenue, profit, cash flow, and margin figures are not provided in the text of this filing, as the "Selected Financial Data" and "Management's Discussion and Analysis" sections are incorporated by reference to the Fiscal 2000 Annual Report to Shareholders. However, the following operational and financial data points are disclosed:
- Store Count: 2,619 company-operated stores at fiscal year-end (up 490 from the prior year).
- Revenue Mix: Company-operated retail stores accounted for approximately 84% of net revenues; specialty operations accounted for 16%.
- Product Mix (Retail): 73% handcrafted beverages, 14% food items, 8% whole bean coffees, and 5% equipment/accessories.
- Market Capitalization: Aggregate market value of voting stock held by non-affiliates was approximately $7.7 billion as of December 15, 2000.
- Outstanding Shares: 188,187,571 shares of Common Stock as of December 15, 2000.
- Debt: Assumed loans totaling approximately $7.7 million in connection with the purchase of the York Plant roasting facility.
- Commitments: Approximately $84 million in fixed-price purchase commitments for green coffee as of October 1, 2000.
- R&D Spend: Approximately $4.0 million during fiscal 2000.
Material Changes and Operational Highlights
During fiscal 2000, Starbucks executed significant expansion and strategic shifts:
- Store Expansion: Opened 490 new company-operated stores and 184 new international licensed stores, entering new markets including Lebanon, the United Arab Emirates, Qatar, Hong Kong, and Shanghai.
- Leadership Transition: Howard Schultz transitioned from Chief Executive Officer to Chairman of the Board and Chief Global Strategist in June 2000. Orin C. Smith assumed the role of President and CEO.
- Asset Acquisition: Purchased the York Plant roasting and distribution facility in Pennsylvania, assuming $7.7 million in development loans.
- Investment Write-down: Filed a Form 8-K in August 2000 announcing the write-down of its entire investment in living.com Inc.
Outlook, Risks, and Management Commentary
Management anticipates continued rapid expansion of retail operations and growth in specialty channels. Key risks and contingencies identified include:
- Commodity Volatility: Significant exposure to fluctuations in green coffee prices, which trade at a premium to commodity prices and are subject to weather, political, and economic conditions in producing countries.
- Competition: Intense competition for retail sites and qualified personnel, as well as competition from supermarkets and other specialty coffee retailers.
- Seasonality: Significant portions of net revenues and profits are realized in the first fiscal quarter due to the December holiday season.
- Forward-Looking Statements: Future results depend on successful execution of expansion plans, raw material availability, and competitive dynamics.
Investor Verification Checklist
- Verify specific revenue, net income, and cash flow figures in the Fiscal 2000 Annual Report to Shareholders (incorporated by reference).
- Review the impact of the $84 million fixed-price coffee purchase commitments on future cost of goods sold.
- Assess the financial impact of the write-down of the investment in living.com Inc.
- Monitor the execution of the leadership transition and the new CEO's strategic priorities.
- Track the performance of new international markets entered during the fiscal year.