February 3, 2006 in Business

Starbucks shares reach all-time high

Associated Press The Spokesman-Review
 

SEATTLE —Starbucks Corp. shares steamed to an all-time high Thursday, a day after the world’s largest specialty coffee retailer reported strong quarterly earnings on brisk sales of its winter holiday drinks.

Starbucks shares rose $3.04, or 9.7 percent, to close at $34.40 Thursday on the Nasdaq Stock Market.

The Seattle retailer said customers’ appetites for holiday drinks such as peppermint mochas and gingerbread lattes helped push earnings up 20 percent for the quarter. The eggnog latte proved so popular a year ago, baristas started serving up a chai tea version of the wintertime treat this past holiday season, CEO Jim Donald said Wednesday.

For the 13 weeks ended Jan. 1, Starbucks said it earned $174 million, or 22 cents per share, up from $145 million, or 17 cents per share, in the comparable period a year earlier.

Revenue for the latest quarter increased 22 percent to $1.93 billion, up from $1.59 billion in the comparable period last year.

The consensus forecast of analysts surveyed by Thomson Financial was 20 cents per share on revenue of $1.93 billion.

Starbucks boosted its earnings targets for the year, saying it expects earnings will be 68 cents to 70 cents a share — 5 cents more than previously forecast.

Sales at Starbucks’ growing number of international stores posted a slightly bigger increase than sales at stores in the U.S.

Total international net revenue increased 25 percent to $314 million for the first fiscal quarter, compared with $251 million for the same period last year. In the United States, total net revenue rose 21 percent to $1.6 billion, compared with $1.3 billion last year.

Michael Casey, chief financial officer, said Starbucks sees enormous growth potential in China, where 50 new stores opened over the past year, bringing the country’s total to 221. Casey said he expects China could one day have several thousand stores.

As of Jan. 1, Starbucks had 7,661 stores in the United States and 3,140 international stores. Its biggest markets outside the U.S. are Canada, Great Britain and Japan, Casey said.

Starbucks said it opened about 560 new stores in the latest quarter.

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