Starbucks income grows on strength of core business

by Staff
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SEATTLE — Success for its core beverages, along with a strong holiday promotion drove results at Starbucks in the first quarter, prompting the company to a raise its earnings per share target range for 2006.

For the first quarter ended Jan. 1, net income totaled $174,190,000, equal to 22c per share on the common stock, up 20% from $144,710,000, or 17c per share, in the same period last year.

Net sales for the quarter rose 22% to $1,934,092,000 on the strength of solid sales of the company’s core beverages.

Comparable store sales for the quarter grew 10%. The company also opened 161 company-operated stores in the U.S. in the first quarter, an increase of 60% from the same period last year.

Based upon the strength of the first-quarter results, the company has raised its full-year earnings per share target range by 5c per share to 68c to 70c per share.

"Building on the success of our first quarter, we are proud that revenue results for the month of January were just as impressive," said Jim Donald, president and chief executive officer. "Due to the strength of the Starbucks brand and the exemplary execution of our holiday promotion, a record number of Starbucks Cards were activated during the holiday season and are bringing valued customers, both existing and new, into Starbucks stores in record numbers.

"We are very pleased with 10% comparable store sales growth in January, but we also recognize that same-store sales growth at this level is not sustainable. We remain comfortable with our 3% to 7% target range for the remainder of the fiscal year."

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