Starbucks Corp. (SBUX) said Thursday after the markets closed that its first quarter profit rose 10% from last year, as a very successful holiday season drove strong global same-store sales. The company's quarterly earnings per share also came in above analysts' expectations as did its quarterly revenue. Based on strong first quarter results, Starbucks raised the low end of its fiscal year 2012 earnings outlook range, the high end of which is below analysts' current consensus estimate.
The world's largest specialty coffee retailer reported net income for the first quarter of $382.1 million or $0.50 per share, compared to $346.6 million or $0.45 per share for the year-ago quarter.
On average, 27 analysts polled by Thomson Reuters expected the company to earn $0.49 per share for the first quarter.
Operating margin for the first quarter contracted to 16.2% from 17.0% in the prior year quarter, due to higher commodity costs.
Total net revenues for the first quarter rose 16% to $3.44 billion from $2.95 billion in the same quarter last year. Twenty-three analysts had a consensus revenue estimate of $3.29 billion for the first quarter.
The company's same-store sales for the first quarter increased 9%, driven by a 7% increase in traffic and a 2% increase in average ticket.
"Starbucks continues to expand our global footprint and accelerate the innovation and momentum in our CPG business," said Howard Schultz, Starbucks chairman, president and CEO. "Our first quarter performance represents the highest quarterly earnings in the history of the company."
Americas segment revenues grew 11% to $2.6 billion in the first quarter, mainly due to a 9% increase in same-store sales, driven by strong sales performance in the U.S. The 9% same-store sales growth in the U.S. was store sales growth was comprised of an 8% increase in the number of transactions and a 2% increase in average ticket.
First quarter revenues for the EMEA segment rose 17% to $303.0 million, due to an increase in company-operated store revenues, mainly driven by incremental revenues from the consolidation of the Switzerland and Austria markets.
China/Asia-Pacific segment revenue jumped 38% to $166.9 million in the first quarter, due to incremental revenues from 85 net new company-operated store openings over the last 12 months, and a 20% increase in same-store sales. The 20% increase in same-stores sales was the result of a 15% increase in the number of transactions and a 5% increase in average ticket.
Starbucks opened 241 net new stores in the first quarter globally, reaching 500 stores in both mainland China and Latin America.
Global Consumer Products Group revenue jumped 72% to $335.8 million, mainly due to sales of Starbucks- and Tazo-branded K-Cup portion packs, and the benefit of recognizing the full revenue from packaged coffee and tea sales under the direct distribution model. More than 100 million Starbucks- and Tazo-branded K-Cup packs were shipped in the first quarter following the November 1 launch.
Starbucks also declared a cash dividend of $0.17 per share, payable on February 24 to shareholders of record as of February 8.
Looking forward to fiscal year 2012, the company continues to target about 10% revenue growth, driven by mid-single-digit same-store sales growth, 800 net new store openings, and strong growth in the CPG business. Analysts currently target a revenue growth o 11.40%.
The company said it now expects fiscal 2012 earnings of $1.78 to $1.82 per share, compared to its prior outlook of $1.75 to $1.82 per share. Analysts currently expect the company to earn $1.83 per share for the fiscal year 2012.
Starbucks shares, which have traded in a range of $30.75 to $48.39 over the past year, closed Thursday's regular trading session at $48.34, up 57 cents. The stock is currently losing 89 or 1.84% in after hours trading.
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