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Business Description
Starbucks Corporation purchases and roasts whole bean coffees and sells them along with brewed coffees, Italian-style espresso beverages, cold blended beverages, a variety of food items, coffee-related accessories and equipment, a selection of teas and a line of compact discs, primarily through Company-operated retail stores. Starbucks also sells coffee and tea products through other channels. Through certain of its equity investees, Starbucks produces and sells bottled Frappuccino and Starbucks DoubleShot coffee drinks and a line of ice creams. The Company has two operating segments: United States and International, each of which includes Company-operated retail stores and Specialty operations. During the fiscal year ended October 10, 2004 (fiscal 2004), the Company had approximately 700 Company-operated, drive-thru locations. In fiscal 2004, the Company introduced the Starbucks Hear Music Coffeehouse, a music store in Santa Monica, California.

Financial Information
For the 13 weeks ended 1/2/05, net sales rose 24% to $1.59 billion. Net income rose 31% to $144.8 million. Revenues reflect the opening of new stores and a growth in comparable store sales. Net income also reflects leverage gained on fixed occupancy costs.