Revenue Gain at Starbucks
The Seattle-based coffee company reported its fiscal first-quarter revenue grew 16% -- the largest quarterly gain since 2007. It attracted new customers by adding stores in China and Morocco, upgrading locations in the U.S. and rolling out single-serve coffee and other new items at grocery stores.
"Starbucks is firing on all cylinders and taking full advantage of the many global opportunities that lie ahead," CEO Howard Schultz said in a statement.
Profit rose 10% to $382.1 million for the quarter that ended January 1, up from $346.6 million in the same quarter last year. Revenue increased to $3.44 billion, with growth from all its business lines.
Starbucks said revenue from its stores open at least a year increased 9%, as more customers visited its cafes and spent more each trip. It was the company's most successful holiday season ever, with customers buying more peppermint mochas, gingerbread lattes and Starbucks gift cards.
Starbucks also benefited from the addition of 241 new stores during the quarter. It now operates 17,244 stores worldwide, with plans to open another 800 in the coming year.
Additionally, Starbucks delivered major gains in its consumer products business, which sells its new single-serve coffee products, Via instant coffee, Starbucks ice cream and other items for sale in grocery stores and other retailers. Revenue from this segment increased 72%, and Starbucks expects the business to continue to grow.
The solid quarterly performance was followed by a full-year forecast that was slightly below Wall Street expectations as Starbucks acknowledged that it continues to struggle with higher costs for coffee beans, dairy products and other ingredients it needs.
Starbucks said these costs were $105 million higher for the quarter than this time last year, sending its operating margins down from 17% to 16.2% for the quarter. Starbucks said commodity costs will add up to $230 million in costs for the full fiscal year, but it anticipates the pressure will lesson in the second-half of the year.
From the January 27, 2012, Prepared Foods' Daily News.