A Lukewarm Cup O' Starbucks: Fool by Numbers (SBUX)

A Lukewarm Cup O' Starbucks: Fool by Numbers

On Jan. 30, Starbucks (Nasdaq: SBUX ) released first-quarter 2008 earnings for the period ended Dec. 30, 2007.

Starbucks opened 484 net new stores domestically this quarter, and 261 abroad. With revised store opening plans aiming for 1,175 U.S. openings and 975 internationals this year, you should expect fewer new locations at home while international expansion continues apace.
If not for a generous share buyback program, financed by a combination of fresh cash and not-too-stale debt, the earnings-per-share growth would have stalled entirely.
On the bright side, a slower build-out schedule will mean swifter cash flow growth over the next few quarters. You have to take the bad with the good sometimes.

(Figures in millions, except per-share data)

Income Statement Highlights

	Q1 2008	Q1 2007	Change
Sales	$2,768	$2,356	17.5%
Net Profit	$208	$205	1.5%
EPS	$0.28	$0.26	7.7%
Diluted Shares	744.9	782.8	(4.8%)

Get back to basics with the income statement.

Margin Checkup

	Q1 2008	Q1 2007	Change*
Gross Margin	57.2%	58.2%	(1.0)
Operating Margin	12.0%	13.6%	(1.5)
Net Margin	7.5%	8.7%	(1.2)

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets	Q1 2008	Q1 2007	Change
Cash + ST Invest.	$463	$374	23.6%
Accounts Rec.	$316	$228	38.8%
Inventory	$581	$547	6.1%

Liabilities	Q1 2008	Q1 2007	Change
Accounts Payable	$341	$276	23.6%
Long-Term Debt	$550	$2	Big %

The balance sheet reflects the company's health.

Cash Flow Highlights

	Q1 2008	Q1 2007	Change
Cash From Ops.	$808	$678	19.0%
Capital Expenditures	$264	$271	(2.6%)
Free Cash Flow	$544	$408	33.4%
Owner Earnings	$84	$51	67.0%

Free cash flow is a Fool's best friend.

Competitive Context

	Market Cap	Trailing P/E Ratio	CAPS Rating (out of 5)
McDonald's (NYSE: MCD )	$60,660	26.53	****
Starbucks	$13,340	20.86	***
Panera Bread (Nasdaq: PNRA )	$1,150	19.9	***
Peet's Coffee & Tea (Nasdaq: PEET )	$304	42.03	***
Krispy Kreme Doughnuts (NYSE: KKD )	$180	N/A	*

Using the latest reported numbers from Yahoo!. Keep your partners close and the competition in your vest pocket.

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updated 16 minutes ago Sponsored by:
	DOW	15,335.28	-19.12	-0.12%
	S&P 500	1,666.29	-1.18	-0.07%
	NASD	3,496.43	-2.54	-0.07%

SBUX	$63.83		-0.30	-0.47%
Starbucks		CAPS Rating:

PEET	$0.00		+0.00	+0.00%
Peet's Coffee & Te…		CAPS Rating:

PNRA	$190.34		+3.74	+2.00%
Panera Bread		CAPS Rating:

KKD	$13.05		-0.04	-0.31%
Krispy Kreme Dough…		CAPS Rating:

3

A Lukewarm Cup O' Starbucks: Fool by Numbers

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