STARBUCKS CORPORATION 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. These statements include statements relating to trends in or expectations relating to the effects of our existing and any future initiatives, strategies, investments and plans, including our Reinvention Plan, as well as trends in or expectations regarding our financial results and long-term growth model and drivers; our operations in theU.S. andChina ; our environmental, social and governance efforts; our partners; economic and consumer trends, including the impact of inflationary pressures; impact of foreign currency translation; strategic pricing actions; the conversion of certain market operations to fully licensed models; our plans for streamlining our operations, including store openings, closures and changes in store formats and models; the success of our licensing relationship with Nestlé, of our consumer packaged goods and foodservice business and its effects on our Channel Development segment results; tax rates; business opportunities, expansions and new initiatives, includingStarbucks Odyssey; strategic acquisitions; our dividends programs; commodity costs and our mitigation strategies; our liquidity, cash flow from operations, investments, borrowing capacity and use of proceeds; continuing compliance with our covenants under our credit facilities and commercial paper program; repatriation of cash to theU.S. ; the likelihood of the issuance of additional debt and the applicable interest rate; the continuing impact of the COVID-19 pandemic on our financial results and future availability of governmental subsidies for COVID-19 or other public health events; our ceo transition; our share repurchase program; our use of cash and cash requirements; the expected effects of new accounting pronouncements and the estimated impact of changes inU.S. tax law, including on tax rates, investments funded by these changes and potential outcomes; and effects of legal proceedings. Such statements are based on currently available operating, financial and competitive information and are subject to various risks and uncertainties. Actual future results and trends may differ materially depending on a variety of factors, including, but not limited to: the continuing impact of COVID-19 on our business; regulatory measures or voluntary actions that may be put in place to limit the spread of COVID-19, including restrictions on business operations or social distancing requirements, and the duration and efficacy of such restrictions; the resurgence of COVID-19 infections and the circulation of novel variants of COVID-19; fluctuations inU.S. and international economies and currencies; our ability to preserve, grow and leverage our brands; the ability of our business partners and third-party providers to fulfill their responsibilities and commitments; potential negative effects of incidents involving food or beverage-borne illnesses, tampering, adulteration, contamination or mislabeling; potential negative effects of material breaches of our information technology systems to the extent we experience a material breach; material failures of our information technology systems; costs associated with, and the successful execution of, the Company's initiatives and plans; new initiatives and plans or revisions to existing initiatives or plans; our ability to obtain financing on acceptable terms; the acceptance of the Company's products by our customers, evolving consumer preferences and tastes and changes in consumer spending behavior; partner investments, changes in the availability and cost of labor including any union organizing efforts and our responses to such efforts; failure to attract or retain key executive or employee talent or successfully transition executives; significant increased logistics costs; inflationary pressures; the impact of competition; inherent risks of operating a global business including any potential negative effects stemming from the Russian invasion ofUkraine ; the prices and availability of coffee, dairy and other raw materials; the effect of legal proceedings; and the effects of changes in tax laws and related guidance and regulations that may be implemented, including the Inflation Reduction Act of 2022 and other risks detailed in our filings with theSEC , including in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the company's most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings. 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-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 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 theSEC onNovember 18, 2022 .
Introduction and Overview
Starbucks is the premier roaster, marketer and retailer of specialty coffee in the world, operating in 84 markets. As ofJanuary 1, 2023 ,Starbucks had more than 36,100 company-operated and licensed stores, an increase of 5% from the prior year. Additionally, we sell a variety of consumer-packaged goods, primarily through theGlobal Coffee Alliance established with Nestlé and other partnerships and joint ventures. During the quarter endedJanuary 1, 2023 , our global comparable store sales 25
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grew 5%, primarily driven by 10% growth in the U.S. market, partially offset by
COVID-19 pandemic-related business conditions in
We have three reportable operating segments: 1)North America , which is inclusive of theU.S. andCanada , 2) International, which is inclusive ofChina ,Japan ,Asia Pacific ,Europe ,Middle East ,Africa ,Latin America and theCaribbean ; and 3) Channel Development. Non-reportable operating segments and 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 exclude 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 due to the COVID-19 pandemic remain in comparable store sales while stores identified for permanent closure have been removed. Our fiscal year ends on the Sunday closest toSeptember 30 . Fiscal 2023 and 2022 included 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 2023 demonstrate the overall strength and resilience of our brand, despite continued COVID-19 pandemic related disruptions in ourChina market and continued inflationary pressures. Consolidated net revenues increased 8% to$8.7 billion in the first quarter of fiscal 2023 compared to$8.1 billion in the first quarter of fiscal 2022, primarily driven by strength in ourU.S. business and growth in our International segment excludingChina , partially offset by COVID-19 pandemic related disruptions inChina and unfavorable foreign currency translation. Consolidated operating margin decreased 20 basis points from the prior year to 14.4%, primarily driven by previously committed investments in labor including enhanced store partner wages and benefits, inflationary pressures and sales deleverage inChina , partially offset by strategic pricing inNorth America and sales leverage across markets outside ofChina . For both theNorth America segment and our U.S. market, comparable store sales increased 10% for the first quarter of fiscal 2023 compared to an increase of 18% in the first quarter of fiscal 2022. Average ticket for both theNorth America segment and the U.S. market grew 9%, primarily driven by strategic pricing. The segment also experienced higher costs, primarily related to enhancements in retail store partner wages and benefits, as well as increased supply chain costs due to inflationary pressures. For the International segment, comparable store sales declined 13% for the first quarter of fiscal 2023, driven by comparable store sales decline of 29% in ourChina market, which experienced suppressed customer mobility and store closures due to pandemic-related restrictions and a spike in infections. These contributed to a decline in both revenue and operating margin for the segment. The unfavorable impacts were partially offset by strong growth in our major international markets outside ofChina . Net revenues for our Channel Development segment increased$61 million , or 15%, when compared with the first quarter of fiscal 2022. This was due to higher product sales to and royalty revenue from theGlobal Coffee Alliance and growth in our ready-to-drink business. Despite COVID-19 induced business interruptions in ourChina market, we have seen the strength and resilience of our brand as well as strong customer demand across our portfolio. While we anticipate continued inflationary pressure, albeit to a lesser extent than in fiscal 2022, and COVID-related interruptions in theChina market, we expect improved financial performance in the second half of fiscal 2023, driven by sales leverage, pricing, productivity gains from Reinvention, as well as recovery inChina . Absent significant and prolonged COVID-19 relapses or global economic disruptions, we believe our strategy will result in sustainable and profitable growth over the long-term. 26
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Results of Operations (in millions)
Revenues
Quarter Ended
Jan 1, Jan 2, $ %
2023 2022 Change Change
Company-operated stores $ 7,083.5 $ 6,722.4 $ 361.1 5.4 %
Licensed stores 1,119.5 850.8 268.7 31.6
Other 510.9 477.2 33.7 7.1
Total net revenues $ 8,713.9 $ 8,050.4 $ 663.5 8.2 %
For the quarter ended
Total net revenues for the first quarter of fiscal 2023 increased$664 million , primarily due to higher revenues from company-operated stores ($361 million ). The growth of company-operated stores revenue was driven by a 5% increase in comparable store sales ($328 million ), attributable to a 7% increase in average ticket offset by a 2% decrease in comparable transactions. Also contributing was incremental revenues from 1,005 net new Starbucks® company-operated stores, or a 6% increase, over the past 12 months ($259 million ). Partially offsetting these increases was unfavorable foreign currency translation ($225 million ). Licensed stores revenue increased$269 million contributing to the increase in total net revenues, driven by higher product and equipment sales to and royalty revenues from our licensees ($299 million ). Partially offsetting this increase was unfavorable foreign currency translation ($35 million ).
Other revenues increased
Operating Expenses
Quarter Ended
Jan 1, Jan 2, $ Jan 1, Jan 2,
2023 2022 Change 2023 2022
As a % of Total
Net Revenues
Product and distribution costs $ 2,810.2 $ 2,526.9 $ 283.3 32.2 % 31.4 %
Store operating expenses 3,665.3 3,400.0 265.3 42.1 42.2
Other operating expenses 129.3 101.7 27.6 1.5 1.3
Depreciation and amortization expenses 327.1 366.0 (38.9) 3.8 4.5
General and administrative expenses 580.9 525.8 55.1 6.7 6.5
Restructuring and impairments 5.8 (7.5) 13.3 0.1 (0.1)
Total operating expenses 7,518.6 6,912.9 605.7 86.3 85.9
Income from equity investees 57.8 40.3 17.5 0.7 0.5
Operating income $ 1,253.1 $ 1,177.8 $ 75.3 14.4 % 14.6 %
Store operating expenses as a % of company-operated stores revenue
51.7 % 50.6 %
For the quarter ended
Product and distribution costs as a percentage of total net revenues increased 80 basis points for the first quarter of fiscal 2023, primarily due to higher supply chain costs driven by inflationary pressures. Store operating expenses as a percentage of total net revenues decreased 10 basis points for the first quarter of fiscal 2023. Store operating expenses as a percentage of company-operated stores revenue increased 110 basis points, primarily due to enhancements in retail store partner wages and benefits (approximately 350 basis points) and increased spend on new partner training (approximately 60 basis points), partially offset by sales leverage. Other operating expenses increased$28 million for the first quarter of fiscal 2023, primarily due to higher support costs for our growing licensed markets ($8 million ) and strategic investments in technology and other initiatives ($8 million ). Depreciation and amortization expenses as a percentage of total net revenues decreased 70 basis points, primarily due to lapping amortization expenses of acquisition-related intangibles assets. 27
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General and administrative expenses increased
Income from equity investees increased
The combination of these changes resulted in an overall decrease in operating margin of 20 basis points for the first quarter of fiscal 2023.
Other Income and Expenses
Quarter Ended
Jan 1, Jan 2, $ Jan 1, Jan 2,
2023 2022 Change 2023 2022
As a % of Total
Net Revenues
Operating income $ 1,253.1 $ 1,177.8 $ 75.3 14.4 % 14.6 %
Interest income and other, net 11.6 (0.1) 11.7 0.1 -
Interest expense (129.7) (115.3) (14.4) (1.5) (1.4)
Earnings before income taxes 1,135.0 1,062.4 72.6 13.0 13.2
Income tax expense 279.8 246.3 33.5 3.2 3.1
Net earnings including noncontrolling interests 855.2 816.1 39.1 9.8 10.1
Net earnings attributable to noncontrolling
interests - 0.2 (0.2) - -
Net earnings attributable to Starbucks $ 855.2 $ 815.9 $ 39.3 9.8 % 10.1 %
Effective tax rate including noncontrolling
interests 24.6 % 23.2 %
For the quarter ended
Interest income and other, net increased
Interest expense increased$14 million , primarily due to rising interest rates on floating rate debt and additional interest incurred on long-term debt issued inFebruary 2022 . The effective tax rate for the quarter endedJanuary 1, 2023 was 24.6% compared to 23.2% for the same period in fiscal 2022. The increase was primarily due to a decrease in stock-based compensation excess tax benefits (approximately 150 basis points). 28
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Table of Contents Segment Information
Results of operations by segment (in millions):
North America Quarter Ended Jan 1, Jan 2, $ Jan 1, Jan 2, 2023 2022 Change 2023 2022 As a % of North America Total Net Revenues Net revenues: Company-operated stores$ 5,870.6 $ 5,214.1 $ 656.5 89.6 % 91.0 % Licensed stores 680.0 515.9 164.1 10.4 9.0 Other 0.7 2.3 (1.6) - - Total net revenues 6,551.3 5,732.3 819.0 100.0 100.0 Product and distribution costs 1,917.6 1,629.4 288.2 29.3 28.4 Store operating expenses 3,031.4 2,702.4 329.0 46.3 47.1 Other operating expenses 65.6 48.2 17.4 1.0 0.8 Depreciation and amortization expenses 216.9 200.0 16.9 3.3 3.5 General and administrative expenses 102.3 76.7 25.6 1.6 1.3 Restructuring and impairments 5.1 (7.5) 12.6 0.1 (0.1) Total operating expenses 5,338.9 4,649.2 689.7 81.5 81.1 Operating income$ 1,212.4 $ 1,083.1 $ 129.3 18.5 % 18.9 %
Store operating expenses as a % of company-operated stores revenue
51.6 % 51.8 %
For the quarter ended
RevenuesNorth America total net revenues for the first quarter of fiscal 2023 increased$819 million , or 14%, primarily due to a 10% increase in comparable store sales ($498 million ) driven by a 9% increase in average ticket and a 1% increase in transactions. Also contributing to these increases were the performance of net new company-operated store openings over the past 12 months ($183 million ) and higher product and equipment sales to and royalty revenues from our licensees ($160 million ). Operating MarginNorth America operating income for the first quarter of fiscal 2023 increased 12% to$1.2 billion , compared to$1.1 billion in the first quarter of fiscal 2022. Operating margin decreased 40 basis points to 18.5%, primarily due to investments in labor, including enhancements in retail store partner wages and benefits (approximately 390 basis points), inflationary pressures on commodities and our supply chain (approximately 210 basis points), as well as increased spend on new partner training (approximately 70 basis points). These were partially offset by strategic pricing (approximately 510 basis points) and sales leverage. 29
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International
Quarter Ended
Jan 1, Jan 2, $ Jan 1, Jan 2,
2023 2022 Change 2023 2022
As a % of International
Total Net Revenues
Net revenues:
Company-operated stores $ 1,212.9 $ 1,508.3 $ (295.4) 72.2 % 80.4 %
Licensed stores 439.5 334.9 104.6 26.2 17.9
Other 27.7 32.7 (5.0) 1.6 1.7
Total net revenues 1,680.1 1,875.9 (195.8) 100.0 100.0
Product and distribution costs 593.6 615.8 (22.2) 35.3 32.8
Store operating expenses 633.9 697.6 (63.7) 37.7 37.2
Other operating expenses 50.7 39.2 11.5 3.0 2.1
Depreciation and amortization expenses 81.5 133.1 (51.6) 4.9 7.1
General and administrative expenses 80.5 91.3 (10.8) 4.8 4.9
Total operating expenses 1,440.2 1,577.0 (136.8) 85.7 84.1
Income from equity investees 0.5 0.7 (0.2) - -
Operating income $ 240.4 $ 299.6 $ (59.2) 14.3 % 16.0 %
Store operating expenses as a % of company-operated stores revenue
52.3 % 46.3 %
For the quarter ended
Revenues International total net revenues for the first quarter of fiscal 2023 decreased$196 million , or 10%, primarily due to unfavorable foreign currency translation ($236 million ), as well as a 13% decline in comparable store sales ($170 million ), driven by a 12% decrease in customer transactions and a 1% decrease in average ticket, primarily attributable to COVID-19 pandemic related disruptions inChina . These decreases were partially offset by higher product and equipment sales to and royalty revenues from our licensees ($139 million ), as well as 649 net new company-operated store openings, or 9% increase, over the past 12 months ($76 million ). Operating Margin International operating income for the first quarter of fiscal 2023 decreased 20% to$240 million , compared to$300 million in the first quarter of fiscal 2022. Operating margin decreased 170 basis points to 14.3%, primarily due to sales deleverage related to COVID-19 pandemic related impacts in ourChina market (approximately 650 basis points) and higher commodity and supply chain costs due to inflationary pressures (approximately 70 basis points). These decreases were partially offset by sales leverage across markets outside ofChina (approximately 240 basis points) the resulting business mix (approximately 140 basis points), as well as lapping amortization expenses of acquisition-related intangibles assets that are now fully amortized (approximately 230 basis points). 30
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Channel Development
Quarter Ended
Jan 1, Jan 2, $ Jan 1, Jan 2,
2023 2022 Change 2023 2022
As a % of Channel Development
Total Net Revenues
Net revenues $ 478.2 $ 417.1 $ 61.1
Product and distribution costs 294.2 258.8 35.4 61.5 % 62.0 %
Other operating expenses 13.0 11.4 1.6 2.7 2.7
General and administrative expenses 2.0 3.3 (1.3) 0.4 0.8
Total operating expenses 309.2 273.5 35.7 64.7 65.6
Income from equity investees 57.3 39.6 17.7 12.0 9.5
Operating income $ 226.3 $ 183.2 $ 43.1 47.3 % 43.9 %
For the quarter ended
Revenues Channel Development total net revenues for the first quarter of fiscal 2023 increased$61 million , or 15%, primarily due to higherGlobal Coffee Alliance product sales and royalty revenue ($43 million ) and growth in our ready-to-drink business ($26 million ). Operating Margin Channel Development operating income for the first quarter of fiscal 2023 increased 24% to$226 million , compared to$183 million in the first quarter of fiscal 2022. Operating margin increased 340 basis points to 47.3%, primarily due to growth in ourNorth American Coffee Partnership joint venture income. 31
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Corporate and Other
Quarter Ended
Jan 1, Jan 2, $ %
2023 2022 Change Change
Net revenues:
Other $ 4.3 $ 25.1 $ (20.8) (82.9) %
Total net revenues 4.3 25.1 (20.8) (82.9)
Product and distribution costs 4.8 22.9 (18.1) (79.0)
Other operating expenses - 2.9 (2.9) nm Depreciation and amortization expenses 28.7 32.9 (4.2) (12.8) General and administrative expenses 396.1 354.5 41.6 11.7 Restructuring and impairments 0.7 - 0.7 nm Total operating expenses 430.3 413.2 17.1 4.1 Operating loss$ (426.0) $ (388.1) $ (37.9) 9.8 % Corporate and Other primarily consists of our unallocated corporate expenses and Evolution Fresh, prior to its sale in the fourth quarter of fiscal 2022. 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
Corporate and Other operating loss increased to$426 million for the first quarter of fiscal 2023, or 10%, compared to$388 million for the first quarter of fiscal 2022. This increase was primarily driven by incremental investments in technology ($28 million ) and increased support costs to address labor market conditions ($9 million ). These increases were partially offset by lower performance based compensation ($12 million ). 32
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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
Jan 1, Jan 2, Jan 1, Jan 2,
2023 2022 2023 2022
North America
Company-operated stores 40 39 10,256 9,900
Licensed stores 46 23 7,125 6,988
Total North America 86 62 17,381 16,888
International
Company-operated stores 97 213 8,134 7,485 Licensed stores 276 209 10,655 9,944Total International 373 422 18,789 17,429Total Company 459 484 36,170 34,317
Financial Condition, Liquidity and Capital Resources
Cash and Investment Overview
Our cash and investments totaled$3.6 billion as ofJanuary 1, 2023 and$3.5 billion as ofOctober 2, 2022 . We actively manage our cash and investments in order to internally fund operating needs, make scheduled interest and principal payments on our borrowings, make 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 (foreign and domestic) and commercial paper as well as principal-protected structured deposits. As ofJanuary 1, 2023 , approximately$2.7 billion of cash and short-term investment 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 million may be used for issuances of letters of credit, is currently set to mature onSeptember 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 will bear interest at a variable rate based on LIBOR, and, forU.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 andStandard & Poor's rating agencies. The 2021 credit facility contains alternative interest rate provisions specifying rate calculations to be used at such time LIBOR ceases to be available as a benchmark due to reference rate reform. 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) the Eurocurrency Rate (as defined in the 2021 credit facility) plus 1.000%. 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 ofJanuary 1, 2023 , we were in compliance with all applicable covenants. No amounts were outstanding under our 2021 credit facility as ofJanuary 1, 2023 orOctober 2, 2022 .
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 the 2021 credit facility discussed above. 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 ofJanuary 1, 2023 , we had no borrowings outstanding under our commercial paper program. As ofOctober 2, 2022 , we had$175.0 million in borrowings outstanding 33
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under this program. Our total contractual borrowing capacity for general
corporate purposes was
Credit facilities inJapan Additionally, we hold Japanese yen-denominated credit facilities for the use of ourJapan subsidiary. These are available for working capital needs and capital expenditures within our Japanese market. •A ¥5 billion, or$37.6 million , credit facility is currently set to mature onJanuary 4, 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 billion, or$75.2 million , credit facility is currently set to mature onMarch 27, 2023 . 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 0.350%.
As of
See Note 8, 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 ofJanuary 1, 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, as well as 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 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 indefinite reinvestment of foreign earnings. In the event we determine that all or a portion of such foreign earnings are no longer indefinitely reinvested, we may be subject to additional foreign withholding taxes andU.S. state income taxes, which could be material. While we do not anticipate the need for repatriated funds to theU.S. to satisfy domestic liquidity requirements, any foreign earnings which are not indefinitely reinvested may be repatriated at management's discretion.
During the first quarter of fiscal 2023, our Board of Directors approved a
quarterly cash dividend to shareholders of
During the first quarter of fiscal 2023, we resumed our share repurchase program which was temporarily suspended inApril 2022 . During the quarter endedJanuary 1, 2023 , we repurchased 1.9 million shares of common stock for$191.4 million . As ofJanuary 1, 2023 , 50.6 million shares remained available for repurchase under current authorizations.
Other than normal operating expenses, cash requirements for the remainder of
fiscal 2023 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 2023 are expected to be
approximately
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In the MD&A included in the 10-K, we disclosed that we had
Cash Flows
Cash provided by operating activities was$1.6 billion for the first quarter of fiscal 2023, compared to$1.9 billion for the same period in fiscal 2022. The change was primarily due to the timing of payments, lower non-cash depreciation and amortization expenses in current year, and net cash used by changes in other operating assets and liabilities. Cash used in investing activities for the first quarter of fiscal 2023 totaled$279 million , compared to cash used in investing activities of$401 million for the same period in fiscal 2022. The change was primarily due to an increase in maturities and calls of investments, partially offset by higher spend on capital expenditures. Cash used in financing activities for the first quarter of fiscal 2023 totaled$1.0 billion compared to cash used in financing activities of$4.0 billion for the same period in fiscal 2022. The change is primarily due to a decrease in share repurchase activities.
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 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. However, the COVID-19 pandemic may have an impact on consumer behaviors and customer traffic that result in changes in the seasonal fluctuations of our business. Additionally, as our stored value 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 our stored value cards are recognized upon redemption and not when cash is loaded, 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 withU.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.
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