This week, Starbucks reported a fourth-quarter profit of $359 million, or 46 cents a share, less than one percent more than it earned for the same quarter a year ago. It beat analysts' estimates by a penny.
Revenue grew 11 percent to $3.4 billion, but so did the Seattle-based coffee chain's expenses. It opened 415 new cafes in the quarter that ended Sept. 30, compared with closing 15 stores during the same period last year.
Total operating expenses rose 9 percent to $2.9 billion.
Most of the new stores -- 250 of the 415 openings for the quarter -- are in Starbucks' Americas region, which includes the United States.
After years of sluggish store growth, Starbucks introduced 1,063 new cafes in fiscal 2012 and plans to open about 1,300 in fiscal 2013.
About 600 of those will be in Asia.
In the past few weeks, Starbucks opened its long-awaited first store in India. The Mumbai location is reported to have so much traffic that at times a security guard has had to implemented a one-in, one-out policy.
The chain has not said how many stores it expects to open in India, which has a well-established cafe scene, but CEO Howard Schultz said Thursday on a conference call with analysts that he expects it eventually to become one of the company's top five markets.
In China -- which has 1.3 billion people, compared with 1.2 billion in India ? the green mermaid wants 1,500 locations by mid-2015, making it its largest market outside the U.S. It recently passed the 700-store mark in China.
Starbucks' U.S. business continues to be its largest by far, with about 11,000 of its 17,000 stores and accounting for the bulk of its total revenue.
Revenue for the Americas segment, which is mostly U.S. business, grew 9 percent to $2.5 billion in the fourth quarter, and operating income gained 21 percent to $536.3 million.
In Asia, Starbucks' revenues rose 23 percent to $198 million for the quarter, and operating income climbed 11 percent to $65.2 million.
Starbucks' business in Europe, the Middle East and Africa ? which is weighted heavily toward Europe ? continues to suffer, with a 2 percent drop in revenue to $284 million and a $6.5 million operating loss.
Same-store sales suffered there as well, largely because of continued softness in Germany, said Michelle Gass, Starbucks' president for that region.
The biggest gain came in Starbucks' channel development business, which includes grocery sales of whole-bean coffee and single-serve coffee and tea pods. Its revenue rocketed by 32 percent to $318.5 million, and operating income rose 26 percent to $100.8 million.
For the year, Starbucks' revenue gained 14 percent to $13.3 billion, and earnings rose 11 percent to $1.38 billion, or $1.79 a share.
The chain is targeting earnings per share of $2.06 to $2.15 a share for fiscal 2013.
(c)2012 The Seattle Times
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