Starbucks enjoys a bumper Christmas

Marion Dakers
STARBUCKS last night reported a quarterly profit that topped Wall Street’s forecasts, after global economic worries failed to weaken demand for drinks and snacks from the world’s biggest coffee chain.

The firm continued its global expansion in the quarter, opening a net 241 new outlets and moving into two new countries, helping to push its revenues up 16 per cent on last year to $3.43bn (£2.19bn).

The popularity of Starbucks’ Christmas range of drinks contributed to a 10 per cent jump in net income to $382.1m for the last quarter of 2011.

“A very successful holiday season drove strong global same store sales, which, combined with continued operational efficiencies, delivered record results despite continued commodity cost pressures,” said Troy Alstead, chief financial officer.

Sales grew by two per cent in Europe, the Middle East and Africa, compared with nine per cent in the Americas and a whopping 20 per cent in China and Asia Pacific.

And operating margins are much higher in Asia, where the firm currently makes nine per cent of its income. Margins are 35 per cent in the region, compared with 22 per cent in America and a relatively paltry 6.5 per cent in EMEA.

But its overall margin has dipped 80 basis points on last year to 16.2 per cent.

Cost of sales, including rent, soared 25.5 per cent on last year to hit $1.5bn in the quarter. Starbucks expects rising commodity prices to add around $230m in costs this year, with most of the hit coming in the first half of the year.

The group hopes to open 400 new stores in the Americas this year, as well as 100 new outlets in the EMEA region.

Starbucks shares slipped two per cent in after hours trading, however, after its full-year outlook was not as bullish as some traders were expecting.