Starbucks Corp on Thursday reported that its fiscal fourth-quarter profit jumped nearly 29 percent and beat Wall Street estimates on strong sales around the globe.
The coffee company has been a standout among its peers in the tough global economy because consumers have started indulging in more small luxuries like lattes. It has also expanded overseas, increased the number of products it offers and upped its presence in grocery stores and other retailers to help drive growth.
“Starbucks Coffee Company has never been stronger or better positioned for sustained, profitable growth than it is today,” Starbucks CEO Howard Schultz said on Thursday. “I have never in my career been more excited or more optimistic about where Starbucks is and where we are going as a company, or felt more strongly that we have the tools in the right places to get us there.”
The company reported after the market closed that it earned US$358.5 million, or US$0.47 per share. That’s up from US$278.9 million, or US$0.37 per share, a year ago. After adjusting for one-time gains and an extra week in the prior quarter, it earned US$0.37 compared with US$0.32 last year.
Revenue rose 7 percent to US$3 billion, with some benefit from foreign exchange rates. That jumped 15 percent after adjusting for the extra week last year. The results beat expectations of US$0.36 per share on revenue of US$2.95 billion, according to FactSet.
Starbucks is facing a number of challenges, from the drag of a weak economy on its customers to higher costs it is paying for commodities such as coffee and milk, but these were offset by strong sales.
The company said revenue was bolstered by new drinks and food products and an expanded loyalty program.
Revenue in its stores open at least a year, which is considered a key financial indicator as it strips away the impact of recently opened or closed stores, increased 9 percent during the period. This measure jumped 10 percent in the US, where consumers bought up more pumpkin spice lattes and bistro boxes.
It increased 6 percent for its international business, with strong gains in China and some softness in the UK and Europe, where consumers have been hit the hardest by economic problems.
The company’s full fiscal year net income jumped nearly 32 percent to US$1.25 billion, or US$1.62 per share. That’s up from US$945.6 million, or US$1.24 per share, in the prior year. Starbucks earned US$1.52 on an adjusted basis, versus US$1.23 in the prior year.
Revenue increased 7 percent to US$11.7 billion for the year.
Starbucks says it expects to earn US$1.75 to US$1.82 for the coming fiscal year on an adjusted basis, with the bulk of the growth coming in the second half of the year as the pressure from higher costs for coffee and other commodities is expected to ease. Analysts expect Starbucks to earn US$1.82 per share.