Starbucks is one of the best-known coffee shop brands in the world, buying and roasting whole bean coffees and selling them, along with fresh, rich-brewed, Italian style espresso beverages, a variety of pastries and confections, and coffee-related accessories and equipment.
Starbucks brews up 18% jump in Q2 profits
Starbucks (NASDAQ:SBUX) late Thursday posted an 18 percent jump in its fiscal second-quarter earnings as more customers visited its outlets in most parts of the world.
The coffee giant also raised its forecast for the year on the better-than-expected results.
For the three months ended April 1, the company said it earned $309.9 million, or 40 cents per share compared with a profit of
$261.6 million, or 34 cents per share, in the year-ago quarter.
Revenue for the latest quarter rose to $3.2 billion, up from $2.79 billion a year ago. Analysts on average expected a profit of 39 cents per share on revenue of $3.18 billion, according to FactSet.
"Starbucks record Q2 performance demonstrates the strength of our business, the increasing power and global relevance of our brand and the success of our unique Blueprint for Profitable Growth business strategy," said Starbucks' chairman, president and CEO Howard Schultz.
Starbucks' CFO Troy Alstead added: "Starbucks delivered strong growth in the fiscal second quarter, again demonstrating the value of our evolving diversified business model. Revenue growth was driven by continued strong global same store sales and an increasing contribution from our Channel Development segment.
"On the strength of our business and recent trends, we are accelerating new store growth in fiscal 2012 to approximately 1,000 net new stores globally, and raising our earnings targets for the year.
"With coffee cost pressures easing in the second half of the year and momentum building from investments in our growth initiatives, we are well positioned to deliver on our aggressive targets."
Contributing to the jump in earnings was the company's expanding mix of consumer products, such as its ice cream and Tazo-branded K-Cup portion packs. Revenue from that division rose to $321.5 million, up 57 percent.
In early March, Starbucks also announced plans to sell a single-cup coffee machine called Verismo. A new energy drink line, called "Refreshers," with green coffee extract was also announced.
Starbucks is looking to move beyond its cafes in other ways as well as last month it announced plans to open its first Evolution Fresh juice bar.
For the fiscal second quarter, Starbucks said global revenue at cafes open at least a year increased by 7 percent, as a result of more customers and higher spending per visit. The figure is a key metric because it excludes the impact of newly opened or closed stores.
The gains were strongest in China and Asia Pacific, where the figure rose 18 percent. The region is a critical expansion area for
Starbucks; by 2014, the company says China will become its second largest market behind the U.S.
Revenue at cafes open at least a year rose 8 percent in the Americas but slipped 1 percent in the region encompassing Europe, Middle East, Russia and Africa.
Starbucks late that same-store sales in the second quarter rose 7%, falling below Wall Street’s target of 7.7%. The company said profit rose 18% to $309.8 million, while revenue rose 15% to $3.2 billion.
For the full year, Starbucks now expects earnings per share to be in the range of $1.81 and $1.84. Analysts were expecting earnings of $1.86 per share.
The company expects the increase to be driven by a mix of increased revenue at cafes, new store openings and gains in the packaged goods that it sells in supermarkets and other retailers.