Starbucks (SBUX) reported after Thursday’s closing bell that fiscal first-quarter profit rose 13 percent even amidst tough economic conditions, bolstered by expanding sales in China and the United States.
The Seattle, Washington-based coffee chain reported an 11 percent increase in total net revenue to $3.8 billion from $3.44 billion in the year prior quarter. The company said that earnings rose to $432.2 million, or 57 cents per share, from $382.1 million, or 50 cents per share, in the same period last year. The quarterly revenues and profits were the highest ever for Starbucks.
The financial report was basically in line with analysts, who predicted $3.84 billion in revenue and earnings per share of 57 cents.
Comparable sales in stores open at least 13 months jumped 7 percent in the Americas and 6 percent in 11 percent in China/Asia Pacific, a notable increase considering that competitors McDonald’s Corp. (MCD) and Yum Brands Inc. (YUM) both lost traction in the region during the October through December quarter. The China/Asia Pacific region is aligned to surpass Canada as Starbucks second biggest market within two years. The U.S. is still far and away the biggest market.
Globally, same-store-sales rose by 6 percent during the latest quarter, compared to the year prior period. Same-store-sales in Europe, the Middle East and Africa declined by 1 percent in the quarter, although operating profit in the region increased 18 percent.
Consolidated operating margins expanded 40 basis points to 16.6 percent.
Since bringing founder Howard Schultz back to the helm as CEO and launching a restructuring plan in 2008 that included closing underperforming stores in the States, the company has begun and aggressive plan of opening new locations in the Americas and overseas. The world’s largest coffee chain opened 212 new stores globally in the latest quarter, including its first three in India, and intends to open thousands more in the Americas and China in the coming years.
The plan has also included diversification, including buying Teavana Holdings Inc. for $620 million to give the company a solid position in the tea industry.
“Solid growth in our U.S. retail business, further expansion of our Channel Development initiatives and continued successful execution against our expansion plans throughout China and Asia Pacific all contributed to the record results we announced today,” said Schultz in Thursday’s corporate statement. “Starbucks has never been better positioned to achieve the goals we have set for ourselves around the world and I have never been more optimistic about our future.”
Schultz said that the company has been able to keep growing because consumers view Starbucks as an “affordable luxury.”
The Board of Directors declared a cash dividend of $0.21 per share, payable on February 22, 2013, to shareholders of record as of February 7, 2013.
Shares of SBUX closed Thursday’s session at $54.57. Since the start of 2012, shares have risen about 23 percent as of yesterday’s close.