Tags: US | Earns | Starbucks

Starbucks' Profit Soars, Revenue Climbs

Thursday, 22 April 2010 07:21 AM EDT

Cost-cutting and an influx of U.S. customers helped Starbucks Corp. post an eight-fold increase in its second-quarter profit.

The increase in customers — Starbucks' first in 13 quarters — helped boost a key performance measure to a four-year high. And its shares rose in after-hours trading Wednesday as investors became increasingly confident that the company's effort to turn around its results was taking hold.

"It was a pretty encouraging quarter almost across the board," said Morningstar restaurant analyst R.J. Hottovy.

Late Wednesday, Starbucks posted a better-than-expected profit of $217.3 million, or 28 cents per share. That figure, for the three months that ended in late March, includes a one-time charge that amounted to a penny per share.

During the same period last year, the coffee chain earned just $25 million, or 3 cents per share, weighed down by hefty charges. Its revenue rose 9 percent to $2.53 billion, up from $2.33 billion.

Both figures beat Wall Street forecasts. Analysts surveyed by Thomson Reuters, who typically exclude one-time charges from their estimates, expected Starbucks to earn 25 cents per share on revenue of $2.41 billion.

"I think the trends we're seeing in the business are real and sustainable," CFO Troy Alstead told The Associated Press.

Starbucks also boosted its forecast for the year's adjusted profit, saying it expects to earn between $1.19 per share and $1.22 per share. That's up from $1.05 per share to $1.08 per share. Analysts had forecast adjusted profit of $1.12 per share.

Starbucks said a key performance measure — sales in stores open at least a year — climbed 7 percent in the U.S. for the second quarter. That figure, considered key because it isn't skewed by results from stores that open or close during the year, slid 8 percent during the comparable quarter last year when Starbucks was in the throes of cutting costs and closing stores to shore up its business.

The 7 percent increase was a four-year high.

"Starbucks' second-quarter results demonstrate the impact of innovation and the success of our efforts to dramatically transform our business over the last two years," CEO Howard Schultz said in a statement. Schultz is also chairman and president of the chain.

It was the fourth consecutive quarter that Starbucks' profit rose and the second that its revenue did.

Starbucks shares climbed 42 cents, or 1.7 percent, to $25.81 in after-hours trading Wednesday. Shares closed at $25.39 in regular activity.

© Copyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Headline
Cost-cutting and an influx of U.S. customers helped Starbucks Corp. post an eight-fold increase in its second-quarter profit.The increase in customers Starbucks' first in 13 quarters helped boost a key performance measure to a four-year high. And its shares rose in...
US,Earns,Starbucks
399
2010-21-22
Thursday, 22 April 2010 07:21 AM
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