(Adds context on industry performance, executive comment on new
products, coffee prices)
April 24 Starbucks Corp on Thursday
reported that quarterly sales at established stores in its
U.S.-dominated Americas region accelerated slightly as it
attracted more customers, who spent more during each visit.
The results from the world's biggest coffee chain came after
McDonald's Corp, Dunkin' Donuts parent Dunkin' Brands
and other major U.S. restaurant operators said last
quarter's severe winter storms chilled results.
Starbucks executives said the inclement weather also hit its
business, but did not quantify the impact.
The company's shares rose 1.9 percent to $72.47 in extended
Global sales at Starbucks cafes open at least 13 months were
up 6 percent for the second quarter, versus analysts' average
estimate of a 5.4 percent gain, according to Consensus Metrix.
That figure included a 6 percent increase for the Americas
region that contributes the majority of Starbucks' revenue.
Analysts also expected a 5.4 percent rise from the Americas.
Starbucks' Americas region sales were up 5 percent in the
Net earnings rose 9.4 percent to $427 million, or 56 cents
per share, for the fiscal second quarter ended March 30, in line
with analysts' average estimate complied by Thomson Reuters
Starbucks raised its fiscal 2014 earnings per share forecast
to a range of $2.62 to $2.68, up from a range of $2.59 to $2.67
previously, after first-quarter results beat internal
Looking ahead, the company said it would roll out new Fizzio
carbonated drinks this summer in the U.S. Sun Belt, as well as
in Singapore, Korea and several cities of China.
"I am convinced it will be a big hit with consumers and
drive traffic during the key afternoon day part, just as it did
in the test markets last summer," Chief Executive Howard Schultz
said on a conference call with analysts.
Oprah Chai, Starbucks' spiced tea partnership with media
mogul Oprah Winfrey, goes on sale in the United States and
Canada next week.
The chain also is beginning a program to add evening food
and beverages, such as beer and wine, in more than 1,000 cafes
in the coming years.
While Starbucks grapples with higher dairy costs, it has
locked in coffee prices for the rest of this fiscal year. Its
coffee contracts will insulate the company from the recent spike
in arabica coffee prices due to worries that the drought in
Brazil, the top arabica grower, will crimp supplies.
Starbucks already has 40 percent of its coffee for fiscal
2015 under contract, Chief Operating Officer Troy Alstead told
"We are all going to be in a waiting game until we see the
(Brazil) harvest come in," Alstead said.
(Reporting by Lisa Baertlein in Los Angeles; Additional
reporting by Marcy Nicholson in New York; Editing by Meredith
Mazzilli,Matthew Lewis and Dan Grebler)