Starbucks Profit Meets Estimates on Americas Sales GainLeslie Patton
Starbucks Corp., the world’s largest coffee-shop operator, said profit rose 13 percent in its fiscal first quarter, meeting analysts’ estimates, as sales increased in the Americas and fell in Europe, the Middle East and Africa.
Net income increased to $432.2 million, or 57 cents a share, from $382.1 million, or 50 cents, a year earlier, the Seattle-based company said yesterday in a statement. Analysts estimated 57 cents, the average of 27 estimates compiled by Bloomberg.
Chief Executive Officer Howard Schultz has attempted to boost sales in the U.S. by expanding beyond coffee with the company’s own juice, baked goods and tea. Schultz is also closing stores in Europe, mostly in the U.K., as he attempts to turn around the business there. Sales at stores open at least 13 months in the Americas rose 7 percent in the quarter, while dropping 1 percent in Europe, the Middle East and Africa.
Analysts estimated an increase of 5.9 percent and a decline of 0.3 percent, respectively, according to the average of 24 projections from Consensus Metrix.
While Starbucks quarterly revenue was the highest ever for the company, the consumer environment in the U.S. and Europe is still shaky, Chief Financial Officer Troy Alstead said in an interview.
“As we go through the next few quarters, we’re likely to have some additional closures to a moderate degree in the U.K. and perhaps in some other markets across the region,” Alstead said.
The shares rose 4.1 percent to $56.81 at the close in New York. Starbucks gained 17 percent last year, compared with a 2.6 percent drop for the Standard & Poor’s 500 Restaurants Index.
Starbucks repeated its forecast for fiscal 2013 earnings, excluding some items, of as much as $2.15 a share. Analysts project $2.16.
Global same-store sales rose 6 percent, compared with analysts’ 5.5 percent average estimate, according to Consensus Metrix, a researcher owned by Wayne, New Jersey-based Kaul Advisory Group. Same-store sales rose 11 percent in China and Asia Pacific.
Comparable-store sales are considered an indicator of a retailer’s growth and performance because they exclude the effect of recent store openings and closings.
Starbucks, which gets about 75 percent of revenue from its Americas segment, also has tried to boost sales by accelerating growth overseas. Last year, it began opening stores in India and earlier this month announced it will open a cafe in Vietnam in February. Asia is the largest and most immediate retail growth opportunity for Starbucks, John Culver, president of the company’s China and Asia Pacific region, said at a conference in December.
Revenue advanced 11 percent to $3.8 billion. Analysts estimated $3.84 billion, on average.
Starbucks, which has about 18,200 cafes worldwide, plans to open 1,300 net new stores during its fiscal 2013, which ends Sept. 29.