US coffee retailer Starbucks has reported a 53% increase in second-quarter net earnings, and also raised its full-year earnings outlook.
The company posted net earnings of US$79m, or 19 cents per share, for the second quarter to 28 March, compared to $52m, or 13 cents per share, in the year-ago period. Consolidated net revenues rose 30% to $1.2bn from $954m a year earlier.
“During the second quarter, all areas of our business, from our retail operations both domestically and internationally, to our specialty businesses delivered strong financial performance,” said CEO Orin Smith.
The company attributed the increase in revenue to the opening of 671 new company-operated retail stores in the last 12 months and comparable store sales growth of 12% for the quarter. The increase in comparable store sales was due to an 11% increase in the number of customer transactions and a 1% increase in the average dollar value per transaction.
A shift in sales mix toward lower margin products and higher green coffee and dairy commodity costs were offset by efficiencies in supply chain distribution operations.
The company said it plans to open approximately 1,300 new stores on a global basis for fiscal 2004. In the US the company plans to open approximately 525 new company-operated locations and 350 licensed locations.
Based on the above-target year-to-date revenue growth of 28.8%, as well as the extra week of sales that will be recorded in the fourth quarter, the company now expects full year fiscal 2004 revenue growth in the range of 25-30%.
Starbucks said it is raising its full-year earnings per share target range to 90-91 cents per share. This range is an increase from the previous target of 86-87 cents per share.
“Starbucks believes it is well-positioned to aggressively pursue its goals of approximately 20% revenue growth and 20 to 25% earnings per share growth over the next three to five years,” the company said.