Published: Friday, November 6, 2009
Starbucks reports an upswing in profits
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Associated Press
Starbucks executives say the chain has attracted more customers so far this year than last.
CHICAGO — More people are visiting Starbucks Corp. coffee shops this year than last, and they’re spending more money when they do, an executive said Thursday.
But it was the company’s cost-cutting that boosted its profit in its fiscal fourth quarter. It had fewer stores than a year earlier, and its revenue fell slightly.
Chief Financial Officer Troy Alstead said the average amount customers spent in each visit to Starbucks rose in the period. And he said sales at shops open at least a year recovered from the third quarter and from last year.
“We are seeing consumers coming in and spending and we’re seeing the improvement across all parts of our day,” he told The Associated Press. “We’re very encouraged by what we saw in the second half of the (fiscal) year. It gives us some encouragement for the quarter coming up.”
Starbucks expects its sales to rise next fiscal year. It says its sales in stores open at least a year, considered a key restaurant and retail measure, also will rise after two years of declines. The company plans to open about 300 new locations, about one-third in the United States.
But the past year has been hard: The company cut costs, laid off workers and reinvented much of the food sold in its shops. It shut roughly 800 locations and tweaked prices for some drinks.
“There’s no one at Starbucks doing a victory lap,” CEO Howard Schultz said during a conference call with investors.
The gourmet coffee chain earned $150 million, or 20 cents per share, during the three-month period that ended in late September. Excluding one-time items, that amounted to 24 cents per share. Last year, it earned $5.4 million, or a penny per share.
But the Seattle company’s revenue dipped almost 4 percent to $2.42 billion.
Analysts polled by Thomson Reuters predict a profit of 21 cents per share on revenue of $2.39 billion for the quarter. Those estimates typically exclude one-time items.
But it was the company’s cost-cutting that boosted its profit in its fiscal fourth quarter. It had fewer stores than a year earlier, and its revenue fell slightly.
Chief Financial Officer Troy Alstead said the average amount customers spent in each visit to Starbucks rose in the period. And he said sales at shops open at least a year recovered from the third quarter and from last year.
“We are seeing consumers coming in and spending and we’re seeing the improvement across all parts of our day,” he told The Associated Press. “We’re very encouraged by what we saw in the second half of the (fiscal) year. It gives us some encouragement for the quarter coming up.”
Starbucks expects its sales to rise next fiscal year. It says its sales in stores open at least a year, considered a key restaurant and retail measure, also will rise after two years of declines. The company plans to open about 300 new locations, about one-third in the United States.
But the past year has been hard: The company cut costs, laid off workers and reinvented much of the food sold in its shops. It shut roughly 800 locations and tweaked prices for some drinks.
“There’s no one at Starbucks doing a victory lap,” CEO Howard Schultz said during a conference call with investors.
The gourmet coffee chain earned $150 million, or 20 cents per share, during the three-month period that ended in late September. Excluding one-time items, that amounted to 24 cents per share. Last year, it earned $5.4 million, or a penny per share.
But the Seattle company’s revenue dipped almost 4 percent to $2.42 billion.
Analysts polled by Thomson Reuters predict a profit of 21 cents per share on revenue of $2.39 billion for the quarter. Those estimates typically exclude one-time items.
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