SEATTLE (dpa-AFX) - Starbucks Corp. (SBUX) Thursday reported a 26 percent jump in second-quarter profit, mostly on growth in the Americas and China & Asia Pacific markets as the specialty coffee retailer embarked on a store opening spree, a trend which it intends to vigorously pursue.
Results also reflect strong operating margins in the Americas, partly offset by a decline in China & Asia Pacific due to increased investment spend. Quarterly earnings were in line with Wall Street estimates, while revenues fell shy of expectations.
Starbucks also raised its earnings outlook for fiscal year 2013, but kept its revenue expectations unchanged.
'Innovation and an enhanced customer experience drove strong comp sales and revenue growth, while a laser focus on improving efficiency and controlling costs enabled us to deliver record margins and earnings,' said Chief Executive Howard Schultz.
The world's largest specialty coffee retailer reported quarterly net income of $390 million or $0.51 per share, compared to $310 million or $0.40 per share last year. On average, 30 analysts polled by Thomson Reuters estimated earnings of $0.48 per share for the quarter. Analysts' estimates typically exclude special items.
Results for the quarter included a $0.03 per share gain on the sale of its equity in the joint venture that operates Starbucks stores in Mexico.
The Seattle, Washington-based company said quarterly revenues rose 11 percent to $3.56 billion from $3.20 billion a year ago. Twenty-six analysts had a consensus revenue estimate of $3.59 billion for the quarter.
Comparable-store sales in the Americas were up 6 percent, and climbed 8 percent in China and Asia-Pacific. Europe, Middle East and Africa edged down 2 percent.
Revenues in the Americas were up 10 percent from last year and accounted for most of the business. Operating margin expanded 220 basis points.
China & Asia Pacific sales jumped 22 percent, but was offset by a 710 basis points decrease in operating margin. The growth in China comes even as rival McDonald's Corp. (MCD) reported weakness in that region, as did restaurant chain Yum! Brands Inc. (YUM).
EMEA sales were flat, even as operating margin increased 450 basis points.
Channel Development net revenue rose 7 percent, led by sales of Starbucks- and Tazo-branded K-Cup packs.
Other revenues more than doubled to $122 million, including contribution from Teavana, Seattle's Best Coffee, Evolution Fresh, Tazo Retail and Digital Ventures.
Consolidated operating margin for the quarter expanded 180 basis points to 15.3 percent in the quarter, on lower coffee costs and sales leverage.
For fiscal year 2013, Starbucks now expects earnings of $2.12 to $2.18 per share, up from prior guidance of $2.06 to $2.15 per share, with revenues expected to grow 10 to 13 percent.
Analysts currently expect earnings of $2.16 per share on revenues of $14.89 billion for the year.
Starbucks added 590 net new stores globally during the second quarter, including 337 Teavana stores. The company plans to open about 1,650 net new stores globally in fiscal 2013, reiterating the previous target of 1,300 Starbucks stores and including 350 Teavana stores acquired and to be opened in the year.
Starbucks stock closed Thursday's regular trade at $60.50, up 1.12%, on a volume of over 7 million shares. In after hours, the stock dropped $1.34 or 2.21%. In the past year, the stock has traded in a range of $43.04 - $61.15.
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