Starbucks' profit climbs as customers spend more

NEW YORK (AP) Starbucks says its profit rose 34 percent in the quarter, as the coffee chain used its loyalty program to get customers to visit more often and spend more on revamped sandwiches and other food.

The Seattle-based company said global sales rose 7 percent at cafes open at least a year, including an 8 percent rise in both the U.S. and Asia. In the region encompassing Europe, the Middle East and Africa, where the company has struggled, the figure rose 2 percent.

The sales performance is somewhat of a standout in the restaurant industry. Chains including McDonald's and Burger King have blamed the weak economy as they fight to drive up sales. But others are faring relatively better, with Chipotle reporting a 6.2 percent sales increase at stores open at least a year and Dunkin' Donuts reporting a 4.2 percent increase for the latest quarter.

Starbucks Corp. has managed to keep growing through a mix of measures. It's adding items such as Evolution juices, which can cost as much as $6 a bottle, and has rolled out new sandwiches and salads to get people to spend more when they stop in for a drink. Prices on several beverages were also hiked over the summer.

Troy Alstead, Starbucks' chief financial officer, said the increase in the average receipt for the quarter was mostly because of food. "As they're adding those purchases, that's giving us a lift," he said.

Still, Alstead said only about a third of purchases overall include food. But he said the trends are improving, and should continue to do so as the company finishes the rollout of new La Boulange baked goods.

The company has also been benefiting from lower costs for coffee beans.

For the quarter, Starbucks said it earned $481.1 million, or 63 cents per share. Analysts expected 59 cents per share. A year ago, the company earned $359 million, or 46 cents per share.

Revenue rose to $3.8 billion, but was shy of the $3.81 billion analysts expected, and the company's stock fell 2 percent to $79.20. Over the past year, the stock is up more than 73 percent.

Starbucks also stood by its forecast to earn between $2.55 and $2.65 per share in 2014. That was short of the $2.67 per share analysts expected, according to FactSet.

The company forecast revenue growth of "10 percent or greater" for 2014, which Alstead said represented "zero change" in the company's expectations. In the previous quarter, Starbucks had specified a forecast of 10 percent to 13 percent growth.

The company raised its dividend by 24 percent to 26 cents per share.

Starbucks has about 20,000 locations around the world, with about 12,000 of those in the U.S.

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