LOS ANGELES - Starbucks reported higher quarterly earnings today, helped by a larger number of stores, and it repeated its full-year profit outlook, sending shares up nearly 6 per cent.
Net income for the fiscal third quarter was US$158 million ($209.9 million), or 21 cents per share, compared
with $145 million, or 18 cents per share, a year ago.
Wall Street analysts, on average, had been expecting earnings of 21 cents per share, according to Reuters Estimates.
Starbucks warned in June it would be "very challenging" for the company to meet the high end of its 2007 earnings forecast due to rising dairy prices and slowing sales growth in its US business. It repeated that warning today.
To help offset those increased costs, the company earlier this week raised prices on coffee and other drinks by an average of 9 cents a cup.
Starbucks shares closed at US$27.20 on Nasdaq. The stock is down about 23 per cent in 2007, compared with a 1.6 per cent decline in the Dow Jones US restaurants and bars index.
Revenue rose 20 per cent to US$2.4 billion. Analysts had been expecting revenue of US$2.39 billion, according to Reuters Estimates.
Sales at coffee shops open at least 13 months, a key retail measure known as same-store sales, rose 4 per cent. Customer transactions increased 1 per cent, while the average value per transaction was up 3 per cent.
For the full year, Starbucks said it still expects to earn between 87 cents per share and 89 cents per share. Wall Street analysts, on average, are expecting earnings of 88 cents a share, according to Reuters Estimates.
For fiscal 2008, Starbucks said it expected same store sales growth of 3 per cent to 7 per cent and earnings per share growth of 20 per cent to 22 per cent.
The coffee chain also set a fiscal 2008 net revenue growth target of 18 per cent, shy of the company's goal in recent years of about 20 per cent.
Starbucks' shares have been battered this year due to investor concerns about slowing US growth, higher costs and increased competition from fast-food rivals such as McDonald's Corp and Dunkin' Donuts.
Its shares rose to US$28.80 in after hours trade from a close of US$27.20 on Nasdaq.
- REUTERS
