Starbucks Beats Expectations, Raises Outlook for Year
Starbucks beat quarterly profit expectations and raised its 2010 earnings forecast, as consumers splurging again on affordable luxuries helped the company post its first rise in sales at established U.S. restaurants in more than two years.
Sales at U.S. restaurants open at least 12 months rose 4 percent during the fiscal first quarter ended Dec 27. The last time Starbucks posted a gain in U.S. same store sales was the fiscal fourth quarter ended September 2007.
The Seattle-based chain, which slashed costs and shuttered more than 900 outlets in a broad-based restructuring, raised its forecast to call for earnings per share in the range of $1.05 to $1.08, excluding about 3 cents per share in restructuring charges, an increase of more than 30 percent from the previous year.
That exceeded Wall Street’s expectation for $1.02, according to Thomson Reuters.
The results from Starbucks and bakery cafe operator Panera , which said Wednesday that comparable store sales leaped more than 9 percent in December, suggested consumers are again willing to indulge in small, daily luxuries after many months of frugality.
Net income was $241.5 million, or 32 cents per share, for the fiscal first quarter. A year earlier, Starbucks’ net income was $64.3 million, or 9 cents per share, in the quarter that covers the U.S. holidays.
Excluding items, Starbucks earned 33 cents a share in the latest quarter, topping analysts’ average forecast of 28 cents per share.
Total net revenue was rose to $2.7 billion compared with $2.6 billion a year earlier.
Shares of Starbucks rose more than 2 percent in extended trading Wednesday.