Starbucks Corp. on 31 January posted a nearly 18% jump in fiscal first-quarter profit, helped by record store openings and strength internationally, and backed its targets for the year.
Net income rose to $205 million, or 26 cents a share, from $174.2 million, or 22 cents a share, in the year-ago period.
Same-store sales rose 6%, helped by a 4% increase in the number of customer transactions and a 2% increase in the average value per transaction. Internationally, same-store sales rose 8%.
Starbucks has been building its business beyond coffee and beverages to merchandise including such items as mugs, books, prepared food, and music that have lower margins than coffee, but also have lower labor costs.
In the first quarter, it opened 728 stores, and said for 2007, the company said it plans to open at least 2,400 new stores globally.
"Looking forward, we continue to believe we have a long runway for future growth. This growth opportunity is largely due to the hard work, dedication and support of all of our partners throughout the organization," Chief Executive Jim Donald said. "The work environment and benefits Starbucks provides its partners are very important to us, and it appears that those efforts have been recognized and are appreciated by our partners."
Starting on Oct. 3, the prices on lattes, cappuccinos, drip coffee, and other drinks will go up 5 cents at company-operated stores in North America. Starbucks is also jacking up the price of its coffee beans by roughly 50 cents per pound, or an average of 3.9%. This is the first price hike on drinks in two years, and the first on beans since 1997.