Revenue Analysis:
Over the past three years, SBUX has displayed a fluctuating trend in total revenue, ranging from $8.566 billion in Q1 2024 to $9.169 billion in Q2 2023. The operating revenue has also experienced similar fluctuations, reflecting ongoing adjustments in the company’s operational strategies. The gross profit margin has seen a general decrease from $2.75 billion in Q3 2023 to $2.19 billion by Q1 2024, indicating some compression in profitability or increased cost of sales.
Cost Management:
Cost of revenue has increased over time, from $6.42 billion in Q1 2023 to $6.348 billion by Q1 2024, a sign of rising production or procurement costs. The operating expenses and total expenses have generally tracked closely with revenue increases, suggesting that the company is scaling its expenses in line with revenue changes but might be facing challenges in streamlining costs more effectively.
Profitability Analysis:
The EBITDA has seen swings, with a high of $2.113 billion in Q3 2023 and reducing significantly to $1.532 billion by Q1 2024. Operating Income and Pretax Income exhibit similar trends and fluctuations. Net income peaked at $1.219 billion in Q3 2023, then dropped to $772 million by Q1 2024, reflecting potential issues in maintaining profitability levels despite revenue scale.
Cash Flow Indicators:
Reconciled Depreciation values have shown incremental increases, from $366.8 million in Q1 2023 to $399.2 million by Q1 2024, suggesting ongoing investment in physical and intangible assets. Interest expense has also shown slight variability with a general upward trend, indicative of an increasing debt load or higher financing costs.
Taxation:
The tax rate has varied from 22.1584% in Q1 2024 to a previous high of about 25.7% in Q4 2023, with tax provisions aligning accordingly from $219.9 million in Q1 2024 to $354.7 million in Q4 2023. This variation in tax rates and provisions reflects differing profitability and operational adjustments made by the company during these periods.
Shareholder Metrics:
Both Diluted and Basic EPS peaked at $1.06 and $1.064519 respectively by Q3 2023, then decreased to $0.68 by Q1 2024. This reduction in EPS might concern investors as it indicates reduced profitability per share. Diluted and Basic Average Shares outstanding were relatively stable during this period with only minor fluctuations, showing a consistent shareholder base.
Conclusion:
SBUX’s financial performance has demonstrated significant volatility in revenue and profitability metrics over the past three years, with notable downward pressure on profits and EPS in the most recent quarters. The management should potentially focus on cost optimization strategies and explore avenues to boost operational efficiency to sustain and improve profitability. Maintaining a close watch on debt levels and the associated costs will also be crucial in the upcoming periods.