Starbucks Corp. perked up its net income by 18 percent in its fiscal second quarter, as more customers visited its cafes in most parts of the world. The Seattle-based company also raised its forecast for the year on the better-than-expected results.
But its stock slid 5 percent in after-market trading as sales showed weakness in parts of Europe
The coffee giant said Thursday that it earned $309.9 million, or 40 cents per share, for the three months ended April 1. That’s compared with a profit of $261.6 million, or 34 cents per share, in the year-ago quarter.
Revenue for the latest quarter rose to $3.2 billion, up from $2.79 billion a year ago. Analysts on average expected a profit of 39 cents per share on revenue of $3.18 billion, according to FactSet.
Starbucks said it expects earnings per share to be in the range of $1.81 and $1.84, representing 19 percent to 21 percent growth from a year ago. Analysts were expecting earnings of $1.86 per share.
The company expects the increase to be driven by a mix of increased revenue at cafes, new store openings and gains in the packaged goods that it sells in supermarkets and other retailers.
For the quarter, Starbucks said global revenue at stores open at least a year increased by 7 percent, as a result of more customers and higher spending per visit. The figure is a key metric because it excludes the impact of newly opened or closed stores.
The gains were strongest in the China Asia Pacific region, where the figure rose 18 percent payday loan. The region is a critical expansion area for Starbucks; by 2014, the company says China will become its second largest market behind the U.S.
Revenue at cafes open at least a year rose 8 percent in the Americas but slipped 1 percent in the region encompassing Europe, Middle East, Russia and Africa.
Chief Financial Officer Troy Alstead said the dip was largely the result of select regions of Europe that were hard hit by economic turmoil.
“It’s not unlike what we experiences in the U.S. a few years ago,” he said.
Alstead said the company is taking similar measures in those markets as it did at home, such as introducing loyalty programs and improving service to boost sales. The coffee giant is also focusing on adapting its offerings to local tastes. In France, for example, Alstead noted that the company added a second espresso option in response to consumer demand.
Also contributing to the company’s strong quarterly performance was its expanding mix of consumer products, such as its ice cream and Tazo-branded K-Cup portion packs. Revenue from that division rose to $321.5 million, up 57 percent from a year ago.
Starbucks said it will accelerate new store growth this year to about 1,000 net new stores globally.