Starbucks Corp. reported an 18.5 percent rise in quarterly earnings on Thursday, helped by hundreds of new stores and demand for new products including hot breakfast sandwiches and a sugar-free version of its popular Cinnamon Dolce latte.
The company also reported improved operating margins and backed its 2007 earnings forecast, sending shares up 1.4 percent in extended trading.
Second-quarter net income was $150.8 million, or 19 cents per share, in-line with Wall Street analysts’ average estimate, according to Reuters Estimates. In the same period last year, Starbucks earned $127.3 million, or 16 cents per share.
“Starbucks reported a solid, in-line quarter and reaffirmed guidance which should be reassuring to investors,” said Mike Koskuba, analyst with Victory Capital Management.
“In the recent past, operating margins were lower than some investors had anticipated due to higher labor costs, commodity costs and costs associated with store openings. Now, it appears that there should be improvement in margins as we move through the year,” he said.
Revenue rose 19.6 percent to $2.26 billion. Analysts were expecting about $2.3 billion, according to Reuters Estimates.
Same-store sales, a key retail measure that tracks sales at coffee shops open at least 13 months, rose 4 percent, in-line with the company’s long-term goal.
Read: Starbucks earnings rise sharply
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