Starbucks has raised its forecast for profit in 2010, after its fourth-quarter profit jumped on cost cutting benefits. For the quarter ending 27 September, the coffee chain saw its net profit surge to $150m (20 cents a share), from just $5.4m (1 cent) last year. Sales however, remained down, declining by 3.7% to $2.42bn, and same-store sales were down 1%.
Profit figures benefitted from the $580m that Starbucks has saved this year by shutting down hundreds of outlets, cutting jobs and reducing leftover food and coffee. The group also announced a new tie-up, which should boost sales. Starting next month, the Subway chain will start serving Starbucks’ ‘Seattle’s Best Coffee’ brand as part of its breakfast menu. Around 9,000 Subway restaurants will offer the brand by the end of this year, and more outlets are likely to offer it in 2010.
The positive performance caused Starbucks to raise its forecast for the ongoing fiscal year, saying earnings per share will rise by as much as 20%, compared to its earlier forecast of an 18% rise. Revenue is expected to grow by the “low to mid- single digits” on a percentage basis.
Namnews - Friday 6th November 2009
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