Starbucks Net Rises on Packaged Coffee, Seasonal Sales
Starbucks Profit Rises on Packaged Coffee
David Paul Morris/Bloomberg
Customers work on laptops at a Starbucks Corp. coffee shop in San Francisco.
Customers work on laptops at a Starbucks Corp. coffee shop in San Francisco. Photographer: David Paul Morris/Bloomberg
Starbucks Corp., the world’s biggest coffee-shop operator, said first-quarter profit surged 44 percent on higher sales of packaged coffee and specialty holiday beverages.
Net income in the three months ended Jan. 2 advanced to $346.6 million, or 45 cents a share, from $241.5 million, or 32 cents, a year earlier, the Seattle-based company said today in a statement. The average of analysts’ estimates compiled by Bloomberg was 39 cents. Revenue increased 8.4 percent to $2.95 billion.
The company, led by Howard Schultz, has sought to take control of grocery items such as Via instant and Seattle’s Best coffee brands to boost sales. In November, Starbucks kicked off a legal spat with Kraft Foods Inc. by attempting to get out of its distribution agreement with the Northfield, Illinois-based food maker. Kraft has said that if the partnership, which began in 1998, is allowed to dissolve, it may face “irreparable harm.”
Starbucks said second-quarter earnings will be as much as 33 cents a share, compared with analysts’ average estimate of 35 cents. The company reiterated that 2011 earnings will be as much as $1.47 a share and raised the lower end of the range to $1.44 from $1.41. The average estimate is $1.49.
Starbucks dropped 58 cents to $33.07 as of 4 p.m. New York time in Nasdaq Stock Market trading before the announcement. The shares have climbed 47 percent in the past 12 months. The coffee brewer operates about 16,800 stores in more than 50 countries, with more than one-fifth of its sales coming from non-U.S. locations.
Earlier this month, Starbucks and Bangalore, India-based Tata Coffee Ltd. signed an agreement in which the companies would explore opening stores and Tata agreed to source beans for Starbucks. The first Starbucks store in India will open in about seven months, Tata Coffee Chairman R.K. Krishna Kumar said in an interview with Bloomberg UTV at the time.
To contact the reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net
To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net.
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