This is a partial transcript from Your World with Neil Cavuto, April 26, 2002. Click here for complete access to all of Neil Cavuto's CEO interviews.

BRENDA BUTTNER, GUEST HOST: Coffee giant Starbucks (SBUX) posted flat earnings for the quarter, but investors not quite liking what they heard, the stock dropped on Friday. But it's still way up for the year. Where does this fast-growing company see things headed?

Let's ask chairman Howard Schultz who joins us now from Seattle. Howard, thanks so much for joining us.

HOWARD SCHULTZ, CHAIRMAN, STARBUCKS: Thank you.

BUTTNER: So, you posted eight cents a share. If you add $5, I can buy a cup of your coffee, huh?

SCHULTZ: Well, actually, it was not exactly eight cents a share. We took a charge for a lawsuit that we settled, but we actually beat the quarter and the consensus estimate by a penny at 11 cents.

But more importantly than that, we had seven percent comps for the quarter and raised revenue targets and comp targets for the balance of the year. And I think given the fact that we are going to open up 1,200 stores this year and the worldwide acceptance of Starbucks now in over 25 countries, we are really establishing the fact that Starbucks is building a global business, and the equity of the brand and the Starbucks experience is as relevant in Spain, where we just opened, as it is in New York City.

BUTTNER: Well, clearly, you had a really good quarter, and congratulations for that, but you really do have to keep expanding at a very breakneck pace to keep up those growth rates.

SCHULTZ: Well, that's true. But I think what you need to realize is despite the fact that we have been so successful in the U.S., as an example, we have less than seven-percent market share of total coffee consumption. There lies a huge opportunity alone in North America.

BUTTNER: There is a Starbucks on every corner, it seems like. Two on every street, no?

SCHULTZ: Well, we are serving about 20 million customers a week. And given the traffic numbers that we are putting up in the comps, we clearly believe that we are not even halfway through the U.S. expansion. And internationally where we just have over 1.300 stores in 25 countries, these are the infant days. So I said publicly that we will have more than 20,000 stores when all is said and done. And with 5,400 today, Starbucks growth days are in front of us.

BUTTNER: Those Europeans are pretty snobby about their coffee. Are you a little concerned about taking American -- what they would call just water over there?

SCHULTZ: Well, I think the cynics have really come around. I mean, given the success we have now had in the U.K., Austria, Switzerland and then two weeks ago when we opened and I was there in Spain, we are demonstrating now that the continent in Europe is going to be as successful for us as Asia as has, where Starbucks has done so well.

BUTTNER: You know, what started, it seems, as a whim has really proven to be quite a revenue generator for you. Those little Starbucks cards that you started, I guess, during the holiday season...

SCHULTZ: Yes, well...

BUTTNER: They've been very popular.

SCHULTZ: Well, that card I think -- of all of the things that I have seen us do over the last 20 years is probably one of the most dynamic marketing tools that we have introduced. And I say tool because it's allowed our customers to get through the line faster. It's given our company an opportunity to really reward our customers. And that card, we have issued over 5 million cards today, is another example of the power of the Starbucks brand.

BUTTNER: Now, you say you are going the own the summer drinks business. You're going beyond frappuccinos, cappuccinos, mochacchinos, whatever. What is the deal there?

SCHULTZ: Well, I think over the last few years, frappuccino, it is the seventh anniversary of frappuccino. We've demonstrated that Starbucks and our coffee products is not a winter phenomenon, and that summer is a very important part of our business.

And I think we now believe that through the introduction of these summer beverages as we have in of every year, that we will have a very, very strong summer supported by a national ad campaign and a new joint venture product with Pepsi Cola called Double Shot, which will be in a can, and probably distributed ubiquitously throughout the country.

So I think we are demonstrating that the lifestyle of the Starbucks brand is not only a warm coffee phenomenon, but we are going to be able to participate in the lives of our customers where they live, where they work and where they play in all kinds of beverages.

BUTTNER: All right. Thank you so much, sir. The CEO of Starbucks, Howard Schultz, appreciate it.

SCHULTZ: Thank you very much, Brenda.

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