Rachel Ruggeri
Executive Vice President , Chief Financial Officer & Principal Accounting Officer at Starbucks
Thank you, Laxman, and good morning, everyone. I'm very pleased to discuss our strong Q4 and full fiscal year 2023 performance, which delivered on our full year guidance shared at the 2022 Investor Day. Our fiscal year 2023 double-digit earnings growth was a direct result of both double-digit revenue growth and margin expansion, as our focus and disciplined execution of our reinvention delivered tangible financial results. Our Q4 consolidated revenue reached a record $9.4 billion, up 9% from the prior year or up 12% when excluding a 1% impact of foreign currency translation.
As Laxman mentioned, the U.S. business delivered strong performance with record breaking average weekly sales from an overwhelmingly successful fall launch, and our International business was also strong, with China performing in line with our expectations. Combined, this resulted in our consolidated comparable store sales growth of 8% and net new company-operated store growth of 7% globally over the prior year, as well as sustained momentum in our global licensed markets.
Q4 consolidated operating margin expanded 310 basis points from the prior year to 18.2%, exceeding our expectations, primarily driven by increased efficiency throughout our U.S. stores as our strong execution on reinvention amplified results even greater than we anticipated, coupled with sales leverage and pricing. Margin expansion continued to be partially offset by our investments in store partners as well as higher G&A costs and support of reinvention. Q4 EPS was $1.06, up 31% from the prior year, driven by strong performance across our segments, especially the U.S., as its results were bolstered by the amplified success of our reinvention.
For fiscal year 2023, our consolidated revenue reached a record $36 billion, up 12% from the prior year or up 14% when excluding approximately two percentage impact of foreign currency translation. Consistent with our guidance, our revenue growth included 8% comparable store growth and 7% net new company-operated store growth over prior year, as well as ongoing contributions from our global licensed store businesses. Our fiscal year 2023 consolidated operating margin was 16.1%, up 100 basis points versus prior year, And EPS of $3.54, was up 20% over prior year. above our recent guidance of 16% to 17%. I'll now provide segment highlights for Q4.
North America delivered another quarter of record revenue with $6.9 billion in Q4, up 12% from the prior year, driven by a combination of an 8% increase in comparable store sales, consisting of 6% and 2% growth in average ticket and transactions, respectively, as well as net new company-operated store growth of 4% over the prior year and contributions from our licensed store business, which continues to benefit from increased travel. When considering growth from all stores, comp, new and licensed, we were pleased to see more than 2/3 of our growth came from transactions, mix, attach and customization, which we collectively call demand.
Our U.S. business delivered 8% comparable store sales growth in Q4, primarily driven by strong ticket performance with 6% comp growth, which benefited from volume, mix, attach, customization and pricing. Our customers continue to favor more premium beverages, creating a new normal as it relates to mix and customization. To fuel this, we continue to lean in with innovation, offering our Iced Pumpkin Cream Chai Tea Latte, which boosted tea sales; as well as Pumpkin Cream Cold Foam, which become a customization favorite with our customers. In addition to our beverage success, we also had another record quarter of food attach driven by both our core breakfast sandwiches and promotional items, such as our Baked Apple Croissant.
The success we're having in driving incremental spend gives us confidence that we're delivering meaningful value and a differentiated experience to our customers. Transaction comparable sales growth in the quarter was 2%, which, combined with another quarter of a record ticket, drove multiple record average weekly sales, including delivering our six highest sales weeks ever, driven by our successful fall launch. Demand continued outside of our promotion windows, which translates to future opportunity as we leverage targeted offers to our most loyal customers, increasing efficiency as we create a more personalized experience.
As it relates to demand, it was another record-breaking quarter for key aspects of our Starbucks Rewards program, active members, spend per member and total member spend, which all surpassed previous highs. To further illustrate the strength of demand, we saw total customer growth among our occasional customers as well. Collectively, this demand speaks to the stickiness of our business. That, coupled with increased customer connection scores and growth across transactions, mix, customization and attach, all leads to a durable and growing business.
U.S. licensed store revenue remained strong in Q4, up 18% from the prior year, benefiting from consumers adopting pre-COVID routines of summer and business travel and expanded digital offerings, such as MOP in airports and curbside at select retailers, enabling us with more ways to meet our customers where they are, supporting increasing demand. North America's operating margin was 23.2% in Q4, expanding 420 basis points from the prior year, driven by increased efficiency in our stores, largely from reinvention, sales leverage and favorable impacts of pricing, partially offset by continued investment in our partners. Moving on to International.
In the quarter, the segment delivered $2 billion in revenue, up 11% from the prior year or up 15% when excluding approximately 3% impact from foreign currency translation. Our revenue growth momentum continues off of a remarkable prior quarter and stems from double-digit growth in the majority of our international regions demonstrating global strength. The segment delivered a 5% increase in comparable store sales driven by a 6% transaction growth, as store traffic increased and digital engagement continued with an increasing Starbucks Rewards member base.
In addition, the International segment delivered 12% net new company-operated store growth year-over-year, with China contributing a significant portion of store growth as they had their highest store openings this year, equating to almost four new store openings daily in Q4, exceeding our expectations. Collectively, the segment surpassed the 20,000 store mark with ample headroom for growth across markets in the years to come. Shifting to China. As Laxman shared, China's revenue in the quarter and on a full year basis grew by double digits driven by strength in our new stores and comparable store sales growth of 5%.
Importantly, China's average weekly sales grew quarter-over-quarter, in line with our guidance of low to mid-single-digit growth. Comparable store sales growth of 5% was driven by strong transaction growth of 8% over the prior year, reflecting the strong brand affinity we create with locally relevant food and beverage and the consistent experience our partners deliver with every visit, differentiating us in the market. We continue to see long-term growth in China with significant opportunities in dayparts, digital offerings and store format, and accordingly, continue to make investments for the future of our partners, stores and local community.
Notably, in the quarter, as Laxman shared, we opened the Coffee Innovation Park, our largest roasting plant outside of the U.S., demonstrating our unwavering commitment to our business in China. Operating margin for the International segment was 15.2% in Q4, expanding 70 basis points over the prior year, driven by sales leverage partially offset by digital investments. We are pleased with our margin, reflecting the strength of business and enabling us to unlock capital to reinvest back in the business to fuel growth. Shifting to channel development.
The segment's revenue was $486 million in Q4, essentially flat over the prior year, in line with our expectations. This was driven largely by at-home coffee. While probably holding the number one share position in the category at 16.1% as well as the number one position in ready-to-drink achieving our highest share in two years. Our fall launch in conjunction with our North America coffee partnership drove our performance resulting in the segment growing better than overall category. The segment's operating margin was 55.8% in Q4, up an impressive 520 basis points from prior year and exceeding our expectations, driven by ongoing strong performance in the North America coffee partnership.
This segment continues to be highly margin accretive to our business and we're excited by the significant profit growth we're seeing in this channel. Shifting to our fiscal year 2024 guidance. Our guidance accounts for the macroeconomic and geopolitical environment as we see it today. Additionally, our guidance does not include any impact from foreign currency translation. First, let me start with the foundation of our growth, comparable sales growth. We expect fiscal year 2024 global comp growth to be 5% to 7%.
While this is a change from our prior year global comp guidance of 7% to 9%, our comp range, coupled with our strong new store performance and momentum in our licensed business, drives a broader and more durable growth narrative supporting our attractive consolidated revenue growth. For color, our fiscal year 2024 U.S. comparable store sales are expected to grow in the range of 5% to 7% as our business continues to have substantial headroom spurred by our leading innovation and technology, increasing customer loyalty and strong digital engagement as evidenced by the U.S. finishing fiscal year 2023 with strong performance of 9% comp growth.
Another positive driver of our fiscal year 2024 5% to 7% global comp growth is the performance in China, with comp expected to be in the range of 4% to 6% in Q2 through Q4, with a higher comp in Q1 as we lap prior year mobility restrictions. Such growth is fueled by our increasing digital capability, coupled with the local opportunity we see stemming from our relevant product innovation and purpose-designed stores, which are resonating with customers and driving engagement.
Our new store performance, combined with our strong China comp guidance, will give another year of double-digit revenue growth in the market, delivering on our momentum. Next, in thinking of our global new store growth, we expect global new store growth of approximately 7%, with approximately 75% of the growth still coming from outside of the U.S. as we continue to focus on our strategic global expansion, reaching nearly 41,000 stores globally by the end of fiscal year 2024. Of the approximate 7% growth, we expect our U.S. store count to grow by approximately 4% in fiscal year 2024, driven by our dynamic portfolio format, expanding our white space opportunity.
We anticipate China will continue its rapid growth of approximately 13% in fiscal year 2024, given the attractive unit economics of our new stores. We expect the remainder of our growth will be driven by the robust development in our other markets around the world that are leveraging the strength of our brand internationally and becoming more global. The combination of our global comp growth that I discussed a few minutes ago and our global store growth as well as continued growth in our licensed business, sets the foundation of our consolidated revenue growth.
For fiscal year 2024, we expect our consolidated revenue growth to continue in the range of 10% to 12%, albeit at the low end of the range. This does not include any impact from foreign currency translation. We expect the foundational elements of our growth will be partially offset by an expected high single-digit revenue decline in our Channel Development segment largely related to the sale of Seattle's Best Coffee and broader SKU optimization. Absent those impacts, Channel Development revenue is expected to be flat year-over-year.
We're proud to reinforce yet another year of double-digit revenue growth at the low end of a 10% to 12% range, building on a very strong fiscal year 2023 performance, all of which reinforces the confidence we have in our business and opportunities we see ahead. Shifting to operating margin. We expect progressive margin expansion in fiscal year 2024 as we continue to deliver efficiency both in and out of our stores, inclusive of approximately $1 billion in incremental high-return, growth-oriented investments balanced across our partners, stores and customers across wages, new store equipment and enhancements, digital and product innovation and supply chain modernization.
We will also continue our focus and discipline in unlocking strategic efficiencies across our business and have multiple work streams underway to support approximately $1 billion in incremental leverage opportunity. These efficiencies, coupled with sales leverage and strategic pricing, support our continued investment in our business even as we expand margin and grow earnings over the long term.
We will provide greater detail around our efficiency work streams in our strategy meeting later today. In addition, we expect our Channel Development segment to continue to be accretive to our overall operating margin, with operating margin expanding to the high 40% to low 50% range from the favorable portfolio mix. Moving on to capital allocation. Through a very disciplined approach to capital allocation, our return on invested capital in fiscal year 2023 approach 25%, a meaningful improvement from prior year. Equally important, we expect this upward trajectory to continue in fiscal year 2024.
We expect our capex in fiscal year 2024 to be approximately $3 billion, with over 85% of our capex directly invested in our global store portfolio. We also expect to continue our stable dividend approach and remain committed to targeting an approximate 50% dividend payout ratio, displaying our confidence in our long-term growth and attracting a broad investor base, which benefits all stakeholders.
As one of the highest dividend payers among high-growth companies, we are proud to have recently commemorated our 13th consecutive annual dividend increase with a CAGR of 20% over such period. Our capital allocation strategy has positioned us well to be able to continue significant business investments while retaining financial flexibility and maintaining our BBB+ investment grade credit rating. Regarding tax rates in fiscal year 2024, we expect our effective GAAP and non-GAAP tax rates to be in the mid-20% range. This is higher than our fiscal year 2023 GAAP and non-GAAP tax rates of 23.6%, which benefited from certain discrete tax items that are not expected to reoccur in fiscal year 2024.
In closing my guidance comments, we continue to expect fiscal year 2024 GAAP and non-GAAP EPS growth to be in the 15% to 20% range. Proudly, we expect our double-digit EPS growth will be a result of a balanced plan, compromised of both revenue growth and margin expansion. Overall, we are pleased with the durability of our business and strong foundation fiscal 2023 has set for fiscal year 2024, and our guidance is a product of our confidence in our continued long-term growth.
We look forward to telling you more about our limitless opportunities in our afternoon strategy meeting. Before I close and turn it over to Tiffany, I want to thank the more than 450,000 partners who wear the green apron across the globe for their tireless contributions to create the experience that makes Starbucks such a meaningful place for all of our customers. It's because of all of you that I have such great confidence in the opportunity ahead. Tiffany?
