http://www.morningstar.com/earnings/38139446-starbucks-corp-sbux-q2-2012.aspx

Starbucks Corp SBUX
Q2 2012 Earnings Call Transcript

Transcript Call Date 04/26/2012

Operator: Good afternoon. My name is Mike, and I will be your conference operator today. At this time, I would like to welcome everyone to the Starbucks Coffee Company's Second Quarter Fiscal Year 2012 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session.

Thank you. Ms. DeGrande, you may begin your conference.

JoAnn DeGrande - IR: Thank you, Mike. Good afternoon. This is JoAnn DeGrande, Director of Investor Relations for Starbucks Coffee Company. Joining me on the call today is Howard Schultz, Chairman, President and CEO, and Troy Alstead, CFO.

Before we get started I would like to remind you that this conference call will include forward-looking statements, which are subject to various risks and uncertainties that could cause our actual results to differ materially from these statements. Any such statements should be considered in conjunction with cautionary statements in our earnings release and risk factor discussions in our filings with the SEC, including our last Annual Report on Form 10-K. Starbucks assumes no obligation to update any of these forward-looking statements or information.

Please refer to the financial statements accompanying the earnings release to find disclosures and reconciliations of non-GAAP financial measures mentioned on today's call with their corresponding GAAP measures. This conference call is being webcast and an archive of the webcast will be available on our website at www.starbucks.com under Investor Relations.

With that, let me turn the call over to Howard Schultz. Howard?

Howard Schultz - Chairman, President and CEO: Thank you, JoAnn, and welcome to everyone on today's call. I am very pleased to report the record second quarter fiscal 2012 results that Starbucks announced today. As we see here today Starbucks has 17,420 stores in 58 countries serving nearly 60 million customers each week. Our record Q2 revenues and earnings were driven by strong overall global comparable store sales growth, a significant increase in our CPG, what we refer to as Channel Development segment revenues and operational excellence.

A strong top line combined with increased efficiencies and continued discipline around controlling costs enabled us to deliver second quarter EPS of $0.40 to our shareholders. I am particularly pleased that we were able to accomplish these results despite the challenges posed by high legacy commodity costs in a particularly difficult consumer environment in Western Europe, further highlighted by the recessionary news out of England just this morning.

I would not ordinarily begin a call with discussion of one particular market, but we had such a memorable trip to China last week that I wanted to share a few of the details with you upfront.

Starbucks' business in China is strong and poised for significant disciplined profitable growth. We have seen a tremendous increase in momentum in China since my last trip, as more and more Chinese consumers frequent our stores and connect with the Starbucks brand and store experience.

Read our Earnings Call Transcript disclaimer.
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