Starbucks Profit Climbs 34% as Customer Traffic Increases at U.S. Stores
Starbucks Corp. (SBUX), the world’s largest coffee-shop operator, said third-quarter profit rose 34 percent as customer traffic increased in the U.S.
Net income in the period ended July 3 climbed to $279.1 million, or 36 cents a share, from $207.9 million, or 27 cents, a year earlier, the Seattle-based company said today in a statement. The average estimate of analysts surveyed by Bloomberg was for profit of 34 cents a share.
Chief Executive Officer Howard Schultz has sought to boost sales with single-serve beverages that customers can brew at home. This year, the company began selling Via instant-coffee packets in China and partnered with Green Mountain Coffee Roasters Inc. to make Starbucks brand capsules for Green Mountain’s Keurig brewer.
“ We continue to be on a very, very strong path to Via being a billion dollar business some years in the future,” Chief Financial Officer Troy Alstead said in a telephone interview today. Food, including petite desserts and “Bistro Boxes” also are “working very well,” he said.
Starbucks said earnings excluding some items in its fiscal 2011 will be as much as $1.51 a share, up from a previous forecast of as much as $1.48. Analysts predict $1.50.
Starbucks rose 81 cents, or 2 percent, to $40.79 at 4:46 p.m. New York time in trading after the close of the Nasdaq Stock Market. The shares had gained 24 percent this year through the close of regular trading today.
Starbucks, along with other restaurant operators, has faced higher ingredient costs during the past year. Higher coffee costs will reduce fiscal 2012 profit by 21 cents a share, the company said.
Sales at U.S. stores open at least 13 months advanced 8 percent in the quarter, while international same-store sales rose 5 percent. Analysts surveyed by Bloomberg expected gains of 5.3 percent in the U.S. and 4.9 percent abroad.
Revenue advanced 12 percent to $2.93 billion. Analysts had estimated $2.84 billion.
Starbucks, which gets more than 20 percent of its sales from outside the U.S., has sought to benefit from China’s growing middle class by accelerating store openings. The coffee brewer plans to more than triple its store count in mainland China to 1,500 locations by 2015, Schultz said in April.
The company will open 800 net new stores globally in fiscal 2012, of which about 150 will be in China, Alstead said. Starbucks has almost 17,000 cafes worldwide, including 10,900 in the U.S.
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