Starbucks Shares Rise On Strong Sales
NEW YORK (CNNMoney) — Starbucks served up some encouragement to investors Thursday with quarterly results that showed strong sales growth.
The Seattle-based chain posted earnings close to analyst estimates. More reassuring was news that same-store sales rose 6%, and that the company increased its dividend from 17 cents to 21 cents a share.
Shares jumped 7% in after-hours trading, a different story from three months ago, when the company reported lackluster results that it attributed in part to global economic challenges.
“I think the market overreacted last quarter to a mild slowdown in U.S. stores that obscured the long-term potential of this business,” said R.J. Hottovy, an analyst with Morningstar.
Starbucks is expanding aggressively internationally, with plans to open 600 new stores in the Asia-Pacific region during its 2013 fiscal year, including more than 300 in China. Last month, the company opened its first location in India as well.
In a conference call with analysts Thursday afternoon, Starbucks executives also touted expected holiday revenue from sales of the Verismo, the company’s single-cup home-brewing machine, which could eat into sales of Keurig machines from competitor Green Mountain Coffee Roasters.
By James O’Toole
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