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.
DIVIDED VIEWS: Although the Fed agreed on holding rates steady, some officials see no rate cuts for this year, while 10 policymakers foresee two or more cuts There are a lot of unknowns about the outlook for the economy and interest rates, but US Federal Reserve Chair Jerome Powell signaled at least one thing seems certain: Higher prices are coming. Fed policymakers voted unanimously to hold interest rates steady at a range of 4.25 percent to 4.50 percent for a fourth straight meeting on Wednesday, as they await clarity on whether tariffs would leave a one-time or more lasting mark on inflation. Powell said it is still unclear how much of the bill would fall on the shoulders of consumers, but he expects to learn more about tariffs
NOT JUSTIFIED: The bank’s governor said there would only be a rate cut if inflation falls below 1.5% and economic conditions deteriorate, which have not been detected The central bank yesterday kept its key interest rates unchanged for a fifth consecutive quarter, aligning with market expectations, while slightly lowering its inflation outlook amid signs of cooling price pressures. The move came after the US Federal Reserve held rates steady overnight, despite pressure from US President Donald Trump to cut borrowing costs. Central bank board members unanimously voted to maintain the discount rate at 2 percent, the secured loan rate at 2.375 percent and the overnight lending rate at 4.25 percent. “We consider the policy decision appropriate, although it suggests tightening leaning after factoring in slackening inflation and stable GDP growth,”
Meta Platforms Inc offered US$100 million bonuses to OpenAI employees in an unsuccessful bid to poach the ChatGPT maker’s talent and strengthen its own generative artificial intelligence (AI) teams, OpenAI CEO Sam Altman has said. Facebook’s parent company — a competitor of OpenAI — also offered “giant” annual salaries exceeding US$100 million to OpenAI staffers, Altman said in an interview on the Uncapped with Jack Altman podcast released on Tuesday. “It is crazy,” Sam Altman told his brother Jack in the interview. “I’m really happy that at least so far none of our best people have decided to take them
PLANS: MSI is also planning to upgrade its service center in the Netherlands Micro-Star International Co (MSI, 微星) yesterday said it plans to set up a server assembly line at its Poland service center this year at the earliest. The computer and peripherals manufacturer expects that the new server assembly line would shorten transportation times in shipments to European countries, a company spokesperson told the Taipei Times by telephone. MSI manufactures motherboards, graphics cards, notebook computers, servers, optical storage devices and communication devices. The company operates plants in Taiwan and China, and runs a global network of service centers. The company is also considering upgrading its service center in the Netherlands into a
RSS