Starbucks profit up 44%; shares dip on outlook
Despite higher costs to purchase coffee beans, Starbucks maintained the top end of its profit outlook for fiscal 2011 and same-store sales growth. But the company did issue earnings targets for the next three quarters that are slightly lower than the consensus analyst forecast. Starbucks shares fell 2% in after-hours trade.
“This is a top-line story,” said Edward Jones analyst Jack Russo, who rates Starbucks shares a hold. Despite the push from McDonald’s and other fast-food chains to sell premium coffee, he said the competition “has not put a dent in Starbucks.”
Victim of commodity price:Starbucks last fall raised some drink prices to offset lofty price increases for green arabica coffee. In Wednesday’s conference call, Chief Financial Officer Troy Alstead said the company had locked in all its coffee costs for 2011. Cocoa and sugar prices have surged too.
The company also changed its corporate logo, dropping the words “Starbucks” and “coffee” from its cups.
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