By Tess Stynes
Starbucks Corp. reported its revenue rose 10% in the final
quarter of the coffee company's business year but slightly missed
Wall Street estimates.
The company also gave a weaker-than-expected outlook for its
current quarter, pushing shares down 5% after hours.
For the quarter ending in December, the company forecast
per-share earnings of 79 cents to 81 cents a share. Analysts polled
by Thomson Reuters expected 83 cents.
Starbucks has been diversifying in recent years from its
traditional coffee business by adding more packaged products and
food.
The company more recently unveiled efforts to attract consumers
seeking more upscale brews. A new line of single-origin coffees
that will be sold in supermarkets aims to woo a growing niche of
coffee aficionados who are as interested in where their coffee is
grown. Starbucks also plans to open 100 specialty Starbucks stores
selling only its small-batch "reserve" coffees.
Starbucks raised prices earlier this year on some packaged
coffee and in-store beverages in response to a jump in coffee
costs, but that hasn't appeared to hurt sales.
The Seattle-based coffeehouse chain said sales at company-owned
stores open at least 13 months rose 5%. By region, sales rose 5% in
the Americas, China and the Asia, and Europe, Middle East and
Africa regions as well.
Overall, Starbucks reported a profit for the period ended Sept.
28 of $587.9 illion, or 77 cents a share, compared with a
year-earlier loss of $1.23 billion, or $1.64 a share, when the
company posted a $2.8 billion litigation charge tied to its dispute
with Kraft Foods.
Excluding items, earnings came in at 74 cents in the latest
period. The company expected per-share earnings of 73 cents to 75
cents.
Revenue increased to $4.18 billion, below with analysts'
estimates of $4.23 billion.
The company opened 503 net new stores globally, ending the
quarter with 21,366 stores across 65 countries.
Late last year an arbitrator handed Starbucks a bitter defeat in
its three-year fight with Kraft, saying the coffee giant must pay
nearly $2.8 billion for ending a failed partnership. The dispute
centered on an agreement Starbucks entered with Kraft in 1998 to
distribute and market Starbucks brand coffee in U.S. grocery
stores--and, later, in overseas markets.
For the recently started year, Starbucks raised its revenue
guidance, partly tied to its plan to take full ownership of its
Japanese operations , now guiding for 16% to 18% growth, versus its
previous call for at least a 10% increase.
As for the bottom line, Starbucks narrowed its outlook,
projected earnings of $3.08 to $3.13 a share, an increase of 16% to
18%. The company had previously guided for a 15% to 20%
increase.
Last month, Starbucks also unveiled plans to take full ownership
of its Japanese operations for more than $900 million, part of a
two-step effort that would strengthen the coffee chain's control of
its second-largest market.
Write to Tess Stynes at tess.stynes@wsj.com
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