LOS ANGELES – Starbucks Corp. (SBUX)Thursday reported a 21 percent rise in quarterly earnings, beating Wall Street analysts' average estimate thanks to strong sales of coffee drinks and a larger number of stores.
Net income for the fiscal fourth quarter ended Oct. 2 rose to $124 million, or 16 cents per share, from $103 million, or 12 cents per share, a year ago. Last year's results are adjusted for a two-for-one split of the coffee shop chain's common stock last month.
Starbucks had forecast earnings of 15 cents a share. Wall Street analysts were also expecting a profit of 15 cents a share, according to Reuters Estimates.
Net revenue rose 13 percent to $1.7 billion. Last year's fourth-quarter included an extra week. Excluding that week, sales were up 23 percent, the company said in a statement.
Starbucks expects to earn between 63 cents and 65 cents a share for the year, including stock-based compensation. Wall Street analysts are expecting net income of 65 cents a share, according to Reuters Estimates.
Last week, Starbucks adjusted its earnings outlook for the current year to account for a new regulation requiring companies to expense stock-based compensation.
The Seattle-based company said monthly sales at stores open at least a year, a key retail measure, would be up between 3 percent and 7 percent in fiscal 2006, with monthly anomalies.
Net sales are expected to rise about 20 percent for the year.
Starbucks shares are relatively unchanged from the beginning of this year after rising nearly 90 percent in 2004. That compares with a 1.7 percent rise in the Standard & Poor's restaurants index, of which it is a component.
The stock trades at about 41 times analysts' average 2007 earnings estimate, well above the industry average of nearly 18 times earnings.