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| Starbucks Corp. on January 26, 2005 reported a
31 percent increase in first-quarter net income, on strong sales of
holiday products like Christmas Blend coffee beans, and raised its
earnings forecast for the year.
(Reuters) |
Starbucks Corp. said strong sales of holiday
drinks, gift cards and music helped boost quarterly earnings by 31 percent, and the coffee retailer raised its earnings forecast slightly
for its current fiscal year.
The Seattle-based retailer on Wednesday reported earnings of $144.9
million, or 35 cents per share, up from $110.4 million, or 27 cents per
share, in the same period last year.
Revenue for the 13 weeks ended Jan. 2 was $1.59 billion, up 24 percent
from $1.28 billion in the comparable year-ago period.
Analysts polled by Thomson First Call were expecting earnings of 34
cents per share on revenue of $1.59 billion.
Michael Casey, Starbucks' chief financial officer,
said the company's quarterly growth showed that Starbucks is able to draw
loyal customers despite an October price increase in its
lattes
, cappuccinos and other
specialty coffee drinks.
Starbucks said it now expects earnings per share for its current fiscal
year to be between $1.15 and $1.17, excluding stock option expenses.
That's up slightly from a previous estimate of between $1.12 and $1.15.
The company expects the increase to come from its fiscal fourth quarter.
Starbucks, which currently has nearly 9,000 coffee stores worldwide,
reiterated its plans to open about 1,500 stores worldwide during the
current fiscal year.
Its shares rose $1.34 or 2.5 percent to $55.34 in regular trading
Wednesday on the Nasdaq Stock Market, but fell 99 cents, or 1.8 percent,
in the after-hours session. The company announced earnings after the
markets closed.
The company's stock reached a 52-week high of $64.26 on Dec. 30, but
shares have fallen since.
Analyst Dan Geiman with McAdams Wright Ragen said investors may have
thought that the company's results, while strong, didn't beat Wall Street
expectations by enough.
"Starbucks is obviously a company where expectations are high, and
maybe even a little higher than they should be," Geiman said. "But there's
really nothing at all amiss."
Starbucks Chairman Howard Schultz said some
analysts and investors may have grown complacent
because the company normally posts strong results,
and have started looking for signs of weakness he argues are not there.
"I think we've had such a long history of continuing to grow the
company in such a unique way that people get bored with our success," he
said in an interview with The Associated Press.
But he said the company was extremely pleased with its results, which
exceeded its own expectations, and very comfortable with its long-term
growth plan.
"No company should be put
in a position to manage the business for the street or the stock
price," he said.
(Agencies) | 
Updated: 2005-01-27 13:42