More traffic, higher receipts buoy Starbucks
The coffee giant beats analyst expectations on quarterly revenue and profit.
The coffee king beat expectations on revenue and profit in its fourth quarter, propelled by a double whammy of good news. Same-store sales rose 10% -- higher than the 7.5% analysts were expecting -- and customers spent more money per transaction than before.
Starbucks said it will raise its quarterly dividend 31% to 17 cents a share. It also approved the repurchase of as many as 20 million shares. Starbucks shares are already up 29% this year.
The company reported profit of $358.5 million, or 47 cents a share, up from $278.9 million, or 37 cents, a year earlier. Analysts expected to see 36 cents a share.
The revenue side was also bright for the quarter ended Oct. 2, with a 6.8% gain to $3.03 billion. Analysts were looking for $2.95 billion.
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The company's profit is impressive, considering how much Starbucks spent on expanding and developing business in the quarter. The company recently introduced its own line of K-Cups for the Keurig single-cup brewing systems. Starbucks is also aggressively expanding overseas, with plans to open 800 stores in the next year.
Starbucks' earnings stand out as others in the industry stumble. Dunkin' Brands (DNKN) saw its recent quarterly profit fall 61% on costs related to its initial public offering earlier this year. The stock hasn't performed well since its debut. And shares of Green Mountain Coffee Roasters (GMCR) have plunged from $110 in September to Thursday's $66.90 close.
For the year that just started Oct. 3, Starbucks said it expects profit of between $1.75 and $1.82 a share. Analysts had been expecting $1.82. Revenue should grow about 10%, the company added.
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