Item 2. Management’s Discussion and Analysis
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
CAUTIONARY STATEMENT PURSUANT TO THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Certain statements contained herein are “forward-looking” statements within the meaning of applicable securities laws and regulations. Generally, these statements can be identified by the use of words such as “aim,” “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “feel,” “forecast,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “will,” “would,” and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. By their nature, forward-looking statements involve risks, uncertainties, and other factors (many beyond our control) that could cause our actual results to differ materially from our historical experience or from our current expectations or projections. Our forward-looking statements, and the risks and uncertainties related thereto, include, but are not limited to, those described under the “Risk Factors” and “Management ’ s Discussion and Analysis of Financial Condition and Results of Operations” sections of our most recently filed 10-K and 10-Q and in other filings with the SEC, as well as:
• our ability to preserve, grow, and leverage our brands, including the risk of negative responses by consumers (such as boycotts or negative publicity campaigns) or governmental actors (such as retaliatory legislative treatment) who object to certain actions taken or not taken by the Company, which responses could adversely affect our brand value;
• the acceptance of the Company’s products and changes in consumer preferences, consumption, or spending behavior and our ability to anticipate or react to them; shifts in demographic or health and wellness trends; or unfavorable consumer reaction to new products, platforms, reformulations, or other innovations;
• our anticipated operating expenses, including our anticipated total capital expenditures;
• the costs associated with, and the successful execution and effects of, our existing and any future business opportunities, expansions, initiatives, strategies, investments, and plans, including our Triple Shot Reinvention with Two Pumps Plan (“Reinvention”);
• the impacts of partner investments and changes in the availability and cost of labor including any union organizing efforts and our responses to such efforts;
• the ability of our business partners, suppliers, and third-party providers to fulfill their responsibilities and commitments;
• higher costs, lower quality, or unavailability of coffee, dairy, energy, water, raw materials, or product ingredients;
• the impact of significant increases in logistics costs;
• a worsening in the terms and conditions upon which we engage with our manufacturers and source suppliers, whether resulting from broader local or global conditions, or dynamics specific to our relationships with such parties;
• unfavorable global or regional economic conditions and related economic slowdowns or recessions, low consumer confidence, high unemployment, weak credit or capital markets, budget deficits, burdensome government debt, austerity measures, higher interest rates, higher taxes, political instability, higher inflation, or deflation;
• inherent risks of operating a global business including geopolitical instability;
• failure to attract or retain key executive or partner talent or successfully transition executives;
• the potential negative effects of incidents involving food or beverage-borne illnesses, tampering, adulteration, contamination, or mislabeling;
• negative publicity related to our Company, products, brands, marketing, executive leadership, partners, Board of Directors, founder, operations, business performance, or prospects;
• potential negative effects of a material breach, failure, or corruption of our information technology systems or those of our direct and indirect business partners, suppliers, or third-party providers, or failure to comply with personal data protection laws;
• our environmental, social, and governance (“ESG”) efforts and any reaction related thereto, such as the rise in opposition to ESG and inclusion and diversity efforts;
• risks associated with acquisitions, dispositions, business partnerships, or investments – such as acquisition integration, termination difficulties or costs, or impairment in recorded value;
• the impact of foreign currency translation, particularly a stronger U.S. dollar;
• the impact of substantial competition from new entrants, consolidations by competitors, and other competitive activities, such as pricing actions (including price reductions, promotions, discounting, couponing, or free goods), marketing, category expansion, product introductions, or entry or expansion in our geographic markets;
• the impact of changes in U.S. tax law and related guidance and regulations that may be implemented, including on tax rates;
• the impact of health epidemics, pandemics, or other public health events on our business and financial results, and the risk of negative economic impacts and related regulatory measures or voluntary actions that may be put in place, including restrictions on business operations or social distancing requirements, and the duration and efficacy of such restrictions;
• failure to comply with anti-corruption laws, trade sanctions, and restrictions or similar laws or regulations; and
• the impact of significant legal disputes and proceedings, or government investigations.
In addition, many of the foregoing risks and uncertainties are, or could be, exacerbated by any worsening of the global business and economic environment. A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances, and those future events or circumstances may not occur. You should not place undue reliance on the forward-
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looking statements, which speak only as of the date of this report. We are under no obligation to update or alter any forward-looking statements, whether as a result of new information, future events, or otherwise.
This information should be read in conjunction with the unaudited consolidated financial statements and the notes included in Item 1 of Part I of this 10-Q and the audited consolidated financial statements and notes, and Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), contained in the 10-K filed with the SEC on November 17, 2023.
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Introduction and Overview
Starbucks is the premier roaster, marketer, and retailer of specialty coffee in the world, operating in 86 markets. As of December 31, 2023, Starbucks had more than 38,500 company-operated and licensed stores, an increase of 7% from the prior year. Additionally, we sell a variety of consumer-packaged goods, primarily through the Global Coffee Alliance established with Nestlé and other partnerships and joint ventures.
We have three reportable operating segments: 1) North America, which is inclusive of the U.S. and Canada; 2) International, which is inclusive of China, Japan, Asia Pacific, Europe, Middle East, Africa, Latin America, and the Caribbean; and 3) Channel Development. Unallocated corporate expenses are reported within Corporate and Other.
We believe our financial results and long-term growth model will continue to be driven by new store openings, comparable store sales growth, and operating margin management, underpinned by disciplined capital allocation. We believe these key operating metrics are useful to investors because management uses these metrics to assess the growth of our business and the effectiveness of our marketing and operational strategies. Throughout this MD&A, we commonly discuss the following key operating metrics:
• New store openings and store count
• Comparable store sales growth
• Operating margin
Comparable store sales growth represents the percentage change in sales in one period from the same prior year period for company-operated stores open for 13 months or longer and excludes the impact of foreign currency translation. We analyze comparable store sales growth on a constant currency basis as this helps identify underlying business trends, without distortion from the effects of currency movements. Stores that are temporarily closed or operating at reduced hours remain in comparable store sales while stores identified for permanent closure have been removed.
Our fiscal year ends on the Sunday closest to September 30. Fiscal 2024 and 2023 include 52 weeks. All references to store counts, including data for new store openings, are reported net of store closures, unless otherwise noted.
Starbucks results for the first quarter of fiscal 2024 continue to demonstrate the overall strength of our brand and efficiencies realized from Reinvention, despite certain headwinds. Consolidated net revenues increased 8% to $9.4 billion in the first quarter of fiscal 2024 compared to $8.7 billion in the first quarter of fiscal 2023, primarily driven by growth in our North America business and our International segment, largely related to lapping prior year COVID-19 pandemic-related business disruptions in China. During the quarter ended December 31, 2023, our global comparable store sales grew 5%, primarily driven by 5% growth in the U.S. market and 7% growth internationally, demonstrating the endurance of the Starbucks brand globally. Consolidated operating margin increased 140 basis points from the prior year to 15.8%, primarily driven by sales leverage and in-store operational efficiencies. These increases were partially offset by increased investments in store partner wages and benefits, as well as higher general and administrative expenses, primarily in support of Reinvention.
We anticipate these headwinds experienced in the first quarter of fiscal 2024, although transitory, may continue to impact the balance of our fiscal year. Despite these transitory headwinds, we remain confident in our long-term growth and durable business model, as our Triple Shot Reinvention is unlocking multiple levers to drive balanced earnings growth, as evidenced in our first quarter of fiscal 2024 results.
Results of Operations (in millions)
Revenues
Quarter Ended
Dec 31,
2023 Jan 1,
2023 $
Change %
Change
Company-operated stores $ 7,755.2 $ 7,083.5 $ 671.7 9.5 %
Licensed stores 1,192.1 1,119.5 72.6 6.5
Other 478.0 510.9 (32.9) (6.4)
Total net revenues $ 9,425.3 $ 8,713.9 $ 711.4 8.2 %
For the quarter ended December 31, 2023 compared with the quarter ended January 1, 2023
Total net revenues for the first quarter of fiscal 2024 increased $711 million, primarily due to higher revenues from company-operated stores ($672 million). The growth of company-operated stores revenue was driven by a 5% increase in comparable store sales ($369 million), attributable to a 3% increase in comparable transactions and a 2% increase in average ticket. Also contributing to company-operated stores revenue were incremental revenues from 1,475 net new Starbucks company-operated
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stores, or an 8% increase, over the past 12 months ($326 million). Partially offsetting these increases was unfavorable foreign currency translation ($30 million).
Licensed stores revenue increased $73 million contributing to the increase in total net revenues, driven by higher product and equipment sales to and royalty revenues from our licensees ($64 million), primarily driven by revenues from 942 net new licensed store openings, or a 5% increase, over the past 12 months.
Other revenues decreased $33 million, primarily due to a decline in revenue in the Global Coffee Alliance following the sale of our Seattle’s Best Coffee brand to Nestlé in the second quarter of fiscal 2023 ($19 million) and lower revenue in our global ready-to-drink business ($11 million).
Operating Expenses
Quarter Ended
Dec 31,
2023 Jan 1,
2023 $
Change
Dec 31,
2023 Jan 1,
2023
As a % of
Total Net Revenues
Product and distribution costs $ 2,980.6 $ 2,810.2 $ 170.4 31.6 % 32.2 %
Store operating expenses 3,851.5 3,665.3 186.2 40.9 42.1
Other operating expenses 150.4 129.3 21.1 1.6 1.5
Depreciation and amortization expenses 365.3 327.1 38.2 3.9 3.8
General and administrative expenses 648.0 580.9 67.1 6.9 6.7
Restructuring and impairments — 5.8 (5.8) — 0.1
Total operating expenses 7,995.8 7,518.6 477.2 84.8 86.3
Income from equity investees 55.9 57.8 (1.9) 0.6 0.7
Operating income $ 1,485.4 $ 1,253.1 $ 232.3 15.8 % 14.4 %
Store operating expenses as a % of company-operated stores revenue 49.7 % 51.7 %
For the quarter ended December 31, 2023 compared with the quarter ended January 1, 2023
Product and distribution costs as a percentage of total net revenues decreased 60 basis points for the first quarter of fiscal 2024, primarily due to the impact of increased sales from pricing.
Store operating expenses as a percentage of total net revenues decreased 120 basis points for the first quarter of fiscal 2024. Store operating expenses as a percentage of company-operated stores revenue decreased 200 basis points, primarily due to in-store operational efficiencies (approximately 210 basis points), and sales leverage (approximately 160 basis points). These were partially offset by increased investments in store partner wages and benefits (approximately 130 basis points).
Other operating expenses increased $21 million, primarily due to support costs in wages and benefits and marketing for our growing licensed markets.
Depreciation and amortization expenses as a percentage of total net revenues increased 10 basis points, primarily due to higher capital investments in support of our retail stores.
General and administrative expenses increased $67 million, primarily due to investments in partner wages and benefits ($33 million) and incremental investments in technology in support of our Reinvention ($32 million).
The combination of these changes resulted in an overall increase in operating margin of 140 basis points for the first quarter of fiscal 2024.
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Other Income and Expenses
Quarter Ended
Dec 31,
2023 Jan 1,
2023 $
Change
Dec 31,
2023 Jan 1,
2023
As a % of Total
Net Revenues
Operating income $ 1,485.4 $ 1,253.1 $ 232.3 15.8 % 14.4 %
Interest income and other, net 33.8 11.6 22.2 0.4 0.1
Interest expense (140.1) (129.7) (10.4) (1.5) (1.5)
Earnings before income taxes 1,379.1 1,135.0 244.1 14.6 13.0
Income tax expense 354.7 279.8 74.9 3.8 3.2
Net earnings including noncontrolling interests 1,024.4 855.2 169.2 10.9 9.8
Net earnings attributable to noncontrolling interests 0.0 0.0 0.0 0.0 0.0
Net earnings attributable to Starbucks $ 1,024.4 $ 855.2 $ 169.2 10.9 % 9.8 %
Effective tax rate including noncontrolling interests 25.7 % 24.6 %
For the quarter ended December 31, 2023 compared with the quarter ended January 1, 2023
Interest income and other, net increased $22 million and interest expense increased $10 million, both primarily due to higher interest rates in the current year.
The effective tax rate for the quarter ended December 31, 2023 was 25.7% compared to 24.6% for the same period in fiscal 2023. The increase was primarily due to the accrual of foreign withholding taxes related to the current-year earnings of certain foreign subsidiaries (approximately 80 basis points).
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Segment Information
Results of operations by segment (in millions) :
North America
Quarter Ended
Dec 31,
2023 Jan 1,
2023 $
Change
Dec 31,
2023 Jan 1,
2023
As a % of North America
Total Net Revenues
Net revenues:
Company-operated stores $ 6,381.1 $ 5,870.6 $ 510.5 89.6 % 89.6 %
Licensed stores 737.9 680.0 57.9 10.4 10.4
Other 1.7 0.7 1.0 0.0 0.0
Total net revenues 7,120.7 6,551.3 569.4 100.0 100.0
Product and distribution costs 2,023.9 1,917.6 106.3 28.4 29.3
Store operating expenses 3,147.7 3,031.4 116.3 44.2 46.3
Other operating expenses 77.4 65.6 11.8 1.1 1.0
Depreciation and amortization expenses 250.4 216.9 33.5 3.5 3.3
General and administrative expenses 100.5 102.3 (1.8) 1.4 1.6
Restructuring and impairments — 5.1 (5.1) — 0.1
Total operating expenses 5,599.9 5,338.9 261.0 78.6 81.5
Operating income $ 1,520.8 $ 1,212.4 $ 308.4 21.4 % 18.5 %
Store operating expenses as a % of company-operated stores revenue 49.3 % 51.6 %
For the quarter ended December 31, 2023 compared with the quarter ended January 1, 2023
Revenues
North America total net revenues for the first quarter of fiscal 2024 increased $569 million, or 9%, primarily due to a 5% increase in comparable store sales ($288 million) driven by a 4% increase in average ticket, primarily due to annualization of pricing, and a 1% increase in comparable transactions. Also contributing to revenue growth were the performance of net new company-operated store openings over the past 12 months ($222 million) and higher product and equipment sales to and royalty revenues from our licensees ($49 million).
Operating Margin
North America operating income for the first quarter of fiscal 2024 increased 25% to $1.5 billion, compared to $1.2 billion in the first quarter of fiscal 2023. Operating margin increased 290 basis points to 21.4%, primarily due to in-store operational efficiencies (approximately 240 basis points) and sales leverage (approximately 180 basis points), partially offset by increased investments in store partner wages and benefits (approximately 120 basis points).
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International
Quarter Ended
Dec 31,
2023 Jan 1,
2023 $
Change
Dec 31,
2023 Jan 1,
2023
As a % of International
Total Net Revenues
Net revenues:
Company-operated stores $ 1,374.1 $ 1,212.9 $ 161.2 74.4 % 72.2 %
Licensed stores 454.2 439.5 14.7 24.6 26.2
Other 18.0 27.7 (9.7) 1.0 1.6
Total net revenues 1,846.3 1,680.1 166.2 100.0 100.0
Product and distribution costs 666.5 593.6 72.9 36.1 35.3
Store operating expenses 703.8 633.9 69.9 38.1 37.7
Other operating expenses 60.1 50.7 9.4 3.3 3.0
Depreciation and amortization expenses 84.1 81.5 2.6 4.6 4.9
General and administrative expenses 90.5 80.5 10.0 4.9 4.8
Total operating expenses 1,605.0 1,440.2 164.8 86.9 85.7
Income from equity investees 0.2 0.5 (0.3) 0.0 0.0
Operating income $ 241.5 $ 240.4 $ 1.1 13.1 % 14.3 %
Store operating expenses as a % of company-operated stores revenue 51.2 % 52.3 %
For the quarter ended December 31, 2023 compared with the quarter ended January 1, 2023
Revenues
International total net revenues for the first quarter of fiscal 2024 increased $166 million, or 10%, primarily due to 1,016 net new Starbucks company-operated stores, or a 12% increase over the past 12 months ($104 million), as well as a 7% increase in comparable store sales ($81 million) driven by an 11% increase in customer transactions, primarily attributable to lapping prior-year impacts from COVID-19 pandemic related disruptions in China. These increases were partially offset by unfavorable foreign currency translation ($30 million). Also contributing to the increase in revenue was growth related to 851 net new licensed store openings, an 8% increase over the past 12 months, partially offset by unfavorable impacts related to certain headwinds.
Operating Margin
International operating income for the first quarter of fiscal 2024 increased to $242 million, compared to $240 million in the first quarter of fiscal 2023. Operating margin decreased 120 basis points to 13.1%, primarily due to investments in store partner wages and benefits (approximately 130 basis points), business mix shift toward company-operated stores (approximately 120 basis points), and strategic investments (approximately 100 basis points). These decreases were partially offset by sales leverage (approximately 300 basis points).
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Channel Development
Quarter Ended
Dec 31,
2023 Jan 1,
2023 $
Change
Dec 31,
2023 Jan 1,
2023
As a % of Channel Development
Total Net Revenues
Net revenues $ 448.0 $ 478.2 $ (30.2)
Product and distribution costs 279.0 294.2 (15.2) 62.3 % 61.5 %
Other operating expenses 12.8 13.0 (0.2) 2.9 2.7
General and administrative expenses 2.2 2.0 0.2 0.5 0.4
Total operating expenses 294.0 309.2 (15.2) 65.6 64.7
Income from equity investees 55.7 57.3 (1.6) 12.4 12.0
Operating income $ 209.7 $ 226.3 $ (16.6) 46.8 % 47.3 %
For the quarter ended December 31, 2023 compared with the quarter ended January 1, 2023
Revenues
Channel Development total net revenues for the first quarter of fiscal 2024 decreased $30 million, or 6%, primarily due to a decline in revenue in the Global Coffee Alliance following the sale of our Seattle’s Best Coffee brand to Nestlé in the second quarter of fiscal 2023 ($19 million) and lower revenue in our global ready-to-drink business ($11 million).
Operating Margin
Channel Development operating income for the first quarter of fiscal 2024 decreased 7% to $210 million, compared to $226 million in the first quarter of fiscal 2023. Operating margin decreased 50 basis points to 46.8%, primarily driven by product costs related to the Global Coffee Alliance (approximately 430 basis points), partially offset by business mix shift (approximately 370 basis points).
Corporate and Other
Quarter Ended
Dec 31,
2023 Jan 1,
2023 $
Change
%
Change
Net revenues:
Other $ 10.3 $ 4.3 $ 6.0 139.5 %
Total net revenues 10.3 4.3 6.0 139.5
Product and distribution costs 11.2 4.8 6.4 133.3
Other operating expenses 0.1 — 0.1 nm
Depreciation and amortization expenses 30.8 28.7 2.1 7.3
General and administrative expenses 454.8 396.1 58.7 14.8
Restructuring and impairments — 0.7 (0.7) nm
Total operating expenses 496.9 430.3 66.6 15.5
Operating loss $ (486.6) $ (426.0) $ (60.6) 14.2 %
Corporate and Other primarily consists of our unallocated corporate expenses. Unallocated corporate expenses include corporate administrative functions that support the operating segments but are not specifically attributable to or managed by any segment and are not included in the reported financial results of the operating segments.
For the quarter ended December 31, 2023 compared with the quarter ended January 1, 2023
Corporate and Other operating loss increased by 14% to $487 million for the first quarter of fiscal 2024 compared to $426 million for the first quarter of fiscal 2023. This increase was primarily driven by incremental investments in technology in support of our Reinvention ($30 million) and higher partner wages and benefits ($17 million).
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Quarterly Store Data
Our store data for the periods presented is as follows:
Net stores opened/(closed) and transferred during the period
Quarter Ended Stores open as of
Dec 31,
2023 Jan 1,
2023 Dec 31,
2023 Jan 1,
2023
North America
Company-operated stores 87 40 10,715 10,256
Licensed stores 34 46 7,216 7,125
Total North America 121 86 17,931 17,381
International
Company-operated stores 186 97 9,150 8,134
Licensed stores 242 276 11,506 10,655
Total International 428 373 20,656 18,789
Total Company 549 459 38,587 36,170
Financial Condition, Liquidity and Capital Resources
Cash and Investment Overview
Our cash and investments were $3.6 billion as of December 31, 2023 and $4.2 billion as of October 1, 2023. We actively manage our cash and investments in order to internally fund operating needs, make scheduled interest and principal payments on our borrowings, fund acquisitions, and return cash to shareholders through common stock cash dividend payments and share repurchases. Our investment portfolio primarily includes highly liquid available-for-sale securities, including corporate debt securities, government treasury securities (domestic and foreign), and commercial paper, as well as principal-protected structured deposits. As of December 31, 2023, approximately $2.4 billion of cash and short-term investments were held in foreign subsidiaries.
Borrowing Capacity
Revolving Credit Facility
Our $3.0 billion unsecured five-year revolving credit facility (the “2021 credit facility”), of which $150.0 million may be used for issuances of letters of credit, is currently set to mature on September 16, 2026. The 2021 credit facility is available for working capital, capital expenditures, and other corporate purposes, including acquisitions and share repurchases. We have the option, subject to negotiation and agreement with the related banks, to increase the maximum commitment amount by an additional $1.0 billion.
Borrowings under the 2021 credit facility, which was most recently amended in April 2023, will bear interest at a variable rate based on Term SOFR, and, for U.S. dollar-denominated loans under certain circumstances, a Base Rate (as defined in the 2021 credit facility), in each case plus an applicable margin. The applicable margin is based on the Company’s long-term credit ratings assigned by the Moody’s and Standard & Poor’s rating agencies. The “Base Rate” is the highest of (i) the Federal Funds Rate (as defined in the 2021 credit facility) plus 0.500%, (ii) Bank of America’s prime rate, and (iii) Term SOFR plus 1.000%. Term SOFR means the forward-looking SOFR term rate administrated by the Chicago Mercantile Exchange plus a SOFR Adjustment of 0.100%.
The 2021 credit facility contains provisions requiring us to maintain compliance with certain covenants, including a minimum fixed charge coverage ratio, which measures our ability to cover financing expenses. As of December 31, 2023, we were in compliance with all applicable covenants. No amounts were outstanding under our 2021 credit facility as of December 31, 2023 or October 1, 2023.
Commercial Paper
Under our commercial paper program, we may issue unsecured commercial paper notes up to a maximum aggregate amount outstanding at any time of $3.0 billion, with individual maturities that may vary but not exceed 397 days from the date of issue. Amounts outstanding under the commercial paper program are required to be backstopped by available commitments under our 2021 credit facility. The proceeds from borrowings under our commercial paper program may be used for working capital needs, capital expenditures, and other corporate purposes, including, but not limited to, business expansion, payment of cash dividends on our common stock, and share repurchases. As of December 31, 2023, we had $300.0 million in borrowings
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outstanding under our commercial paper program. As of October 1, 2023, we had no borrowings outstanding under this program. Our total available contractual borrowing capacity for general corporate purposes was $2.7 billion as of the end of our first quarter of fiscal 2024.
Credit Facilities in Japan
Additionally, we hold the following Japanese yen-denominated credit facilities that are available for working capital needs and capital expenditures within our Japanese market.
• A ¥5.0 billion, or $35.4 million, credit facility is currently set to mature on December 30, 2024. Borrowings under this credit facility are subject to terms defined within the facility and will bear interest at a variable rate based on TIBOR plus an applicable margin of 0.400%.
• A ¥10.0 billion, or $70.7 million, credit facility is currently set to mature on March 27, 2024. Borrowings under this credit facility are subject to terms defined within the facility and will bear interest at a variable rate based on TIBOR plus an applicable margin of 0.300%.
As of December 31, 2023, we had ¥7.0 billion, or $49.5 million, of borrowings outstanding under these credit facilities. As of October 1, 2023, we had ¥5.0 billion, or $33.5 million, of borrowings outstanding under these credit facilities.
See Note 7, Debt, to the consolidated financial statements included in Item 1 of Part I of this 10-Q for details of the components of our long-term debt.
Our ability to incur new liens and conduct sale and leaseback transactions on certain material properties is subject to compliance with terms of the indentures under which the long-term notes were issued. As of December 31, 2023, we were in compliance with all applicable covenants.
Use of Cash
We expect to use our available cash and investments, including, but not limited to, additional potential future borrowings under the credit facilities, commercial paper program, and the issuance of debt to support and invest in our core businesses, including investing in new ways to serve our customers and supporting our store partners, repaying maturing debts, returning cash to shareholders through common stock cash dividend payments and discretionary share repurchases, and investing in new business opportunities related to our core and developing businesses. Furthermore, we may use our available cash resources to make proportionate capital contributions to our investees. We may also seek strategic acquisitions to leverage existing capabilities and further build our business. Acquisitions may include increasing our ownership interests in our investees. Any decisions to increase such ownership interests will be driven by valuation and fit with our ownership strategy.
We believe that net future cash flows generated from operations and existing cash and investments both domestically and internationally, combined with our ability to leverage our balance sheet through the issuance of debt, will be sufficient to finance capital requirements for our core businesses as well as shareholder distributions for at least the next 12 months. We are currently not aware of any trends or demands, commitments, events, or uncertainties that will result in, or that are reasonably likely to result in, our liquidity increasing or decreasing in any material way that will impact our capital needs during or beyond the next 12 months. We have borrowed funds and continue to believe we have the ability to do so at reasonable interest rates; however, additional borrowings would result in increased interest expense in the future. In this regard, we may incur additional debt, within targeted levels, as part of our plans to fund our capital programs, including cash returns to shareholders through future dividends and discretionary share repurchases, refinancing debt maturities, as well as investing in new business opportunities. If necessary, we may pursue additional sources of financing, including both short-term and long-term borrowings and debt issuances.
We regularly review our cash positions and our determination of partial indefinite reinvestment of foreign earnings. In the event we determine that all or another portion of such foreign earnings are no longer indefinitely reinvested, we may be subject to additional foreign withholding taxes, which could be material. Any foreign earnings that are not indefinitely reinvested may be repatriated at management’s discretion. In anticipation of repatriation of current-year earnings of certain foreign subsidiaries, we accrued approximately $10 million for foreign withholding taxes during the first quarter of fiscal year 2024.
During the first quarter of fiscal 2024, our Board of Directors approved a quarterly cash dividend to shareholders of $0.57 per share to be paid on February 23, 2024 to shareholders of record as of the close of business on February 9, 2024.
During the quarter ended December 31, 2023, we repurchased 12.8 million shares of common stock for $1,250.1 million on the open market. As of December 31, 2023, 29.8 million shares remained available for repurchase under current authorizations.
Other than normal operating expenses, cash requirements for the remainder of fiscal 2024 are expected to consist primarily of capital expenditures for investments in our new and existing stores, our supply chain, and corporate facilities. Total capital expenditures for fiscal 2024 are expected to be approximately $3.0 billion.
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In the MD&A included in the 10-K, we disclosed that we had $33.9 billion of current and long-term material cash requirements as of October 1, 2023. There have been no material changes to our material cash requirements during the period covered by this 10-Q outside of the normal course of our business.
Cash Flows
Net cash provided by operating activities was $2.4 billion for the first quarter of fiscal 2024, compared to $1.6 billion for the same period in fiscal 2023. The change was primarily due to an increase in net cash provided by changes in operating assets and liabilities and higher net earnings during the period.
Net cash used in investing activities totaled $568.8 million for the first quarter of fiscal 2024, compared to $279.3 million for the same period in fiscal 2023. The change was primarily due to an increase in purchases of investments and higher capital expenditures.
Net cash used in financing activities for the first quarter of fiscal 2024 totaled $2.4 billion, compared to $1.0 billion for the same period in fiscal 2023. The change was primarily due to an increase in share repurchase activities and repayments of debt, partially offset by proceeds from issuance of commercial paper.
Commodity Prices, Availability and General Risk Conditions
Commodity price risk represents our primary market risk, generated by our purchases of green coffee and dairy products, among other items. We purchase, roast, and sell high-quality arabica coffee and related products, and risk arises from the price volatility of green coffee. In addition to coffee, we also purchase significant amounts of dairy products to support the needs of our company-operated stores. The price and availability of these commodities directly impact our results of operations, and we expect commodity prices, particularly coffee, to impact future results of operations. For additional details, see Product Supply in Item 1 of the 10-K, as well as Risk Factors in Part I, Item 1A of the 10-K.
Seasonality and Quarterly Results
Our business is subject to moderate seasonal fluctuations, of which our fiscal second quarter typically experiences lower revenues and operating income. Additionally, as Starbucks Cards are issued to and loaded by customers during the holiday season, we tend to have higher cash flows from operations during the first quarter of the fiscal year. However, since revenues from Starbucks Cards are recognized upon redemption and not when cash is loaded onto the Starbucks Card, the impact of seasonal fluctuations on the consolidated statements of earnings is much less pronounced. As a result of moderate seasonal fluctuations, results for any quarter are not necessarily indicative of the results that may be achieved for the full fiscal year.
Critical Accounting Estimates
The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions, and estimates that affect the amounts reported. Note 1 , Summary of Significant Accounting Policies and Estimates, to the consolidated financial statements included in Item 1 of Part I of this 10-Q and in the Notes to Consolidated Financial Statements in Part II, Item 8 of the 10-K describe the significant accounting policies and methods used in the preparation of the Company’s consolidated financial statements. There have been no material changes to the Company’s critical accounting estimates since the 10-K.
RECENT ACCOUNTING PRONOUNCEMENTS
See Note 1 , Summary of Significant Accounting Policies and Estimates, to the consolidated financial statements included in Item 1 of Part I of this 10-Q, for a detailed description of recent accounting pronouncements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There has been no material change in the commodity price risk, foreign currency exchange risk, equity security price risk, or interest rate risk discussed in Item 7A of the 10-K.
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