Starbucks profit climbs 24% in '09

by Eric Schroeder
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SEATTLE — Broad-based improvement across its global business helped to generate a 24% gain in earnings at Starbucks Corp. in fiscal 2009. Net income in the year ended Sept. 27 totaled $390.8 million, equal to 52c per share on the common stock, up from $315.5 million, or 43c per share, in fiscal 2008.

Net sales for the year, meanwhile, fell 6% to $9,774.6 million from $10,383 million. The decline reflected a 6% drop in comparable store sales and the effects of a stronger U.S. dollar relative to the British pound and Canadian dollar.

For the fourth quarter, net income was $150 million, or 20c per share, up from $5.4 million, or 1c per share, in the same period a year ago. Net sales totaled $2,422.2 million, down 4% from $2,515.5 million in the fourth quarter of fiscal 2008.

Fourth-quarter restructuring charges totaled $53.2 million, down from $99.2 million in the same period last year. For the full year, charges totaled $332.4 million, up 25% from $266.9 million in charges during fiscal 2008. Starbucks said it has closed nearly 800 U.S. stores, 61 stores in Australia and 40 stores in other international markets as part of its plan to rationalize its global store portfolio.

“Starbucks’ strong performance in Q4 and fiscal 2009 overall is the result of our successful efforts to improve our customer and partner experiences, the initiatives and innovations we have introduced over the past 18 months and the significant, permanent changes we have made to our cost structure,” said Howard Schultz, chairman, president and chief executive officer.

Looking to fiscal 2010, Starbucks raised its projected earnings growth to 15% to 20%, up from 13% to 18% in an earlier forecast. In addition, the company said it expects revenue growth in the low- to mid-single digit and plans to open 100 new stores in the United States and 200 stores in international markets.

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