U.S. comp sales help drive gain at Starbucks

by Eric Schroeder
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SEATTLE — Stepped-up traffic at U.S. stores along with consistent growth at international locations contributed to a sharp second-quarter earnings gain at Starbucks Corp. Net income at Starbucks in the second quarter ended March 28 totaled $217.3 million, equal to 28c per share on the common stock, up from $25 million, or 3c per share, in the same period of fiscal 2009. This year’s results included $7.9 million in restructuring charges, which compared with $152.1 million in restructuring charges in 2009, including $102.7 million related to the closing of 123 company-owned stores.

Revenue for the quarter was $2,534.7 million, up 9% from $2,333.3 million a year ago. Starbucks said U.S. comparable store sales increased 7%, driven by a 3% increase in traffic and a 5% increase in average ticket, while international comparable store sales also rose 7%, driven by a 6% gain in traffic and 1% increase in average ticket.

During the second quarter Starbucks undertook several initiatives that are expected to drive growth throughout 2010, including the February incorporation of Seattle’s Best Coffee into approximately 7,250 Burger King restaurants throughout the United States and the March launch of Starbucks Via in company-operated stores in the United Kingdom.

“Starbucks second-quarter results demonstrate the impact of innovation and the success of our efforts to dramatically transform our business over the last two years,” said Howard Schultz, chairman, president and chief executive officer. “Much credit goes to our partners all around the world who continue to deliver an improved experience to our customers. In addition, new products like Starbucks Via, the opening of exciting new stores in Asia, Europe and the U.S., and expanded distribution outside our retail stores all represent opportunities for future growth as we fulfill our pledge to bring the highest quality coffee to our customers.”

For the first six months of fiscal 2010, Starbucks had net income of $458.8 million, or 60c per share, up from $89.3 million, or 12c per share, in the same period a year ago. Sales were $5,257.4 million, up 6% from $4,948.5 million.

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