("=Starbucks Swings To 3Q Profit; Shares Rise On Higher
Targets," at 2036 GMT, incorrectly reported Starbucks' net revenue
rose in the sixth paragraph. The correct version follows:)
DOW JONES NEWSWIRES
Starbucks Corp. (SBUX) swung to a fiscal third-quarter profit on
smaller restructuring charges, and the company raised its
cost-cutting target for the fiscal year.
That news, along with the company's strong earnings guidance,
sent shares up 8.5% to $15.94 in after-hours trading. The shares
have more than doubled since late November and are less than 10%
below their 52-week high.
"The transformation of Starbucks business - including the
success of our consumer-facing initiatives and the permanent
changes to our cost structure - is delivering improvements in
comparable store sales trends and is beginning to be reflected in
our financial performance," said Howard Schultz, chairman,
president and chief executive.
The coffee purveyor has been in retrenchment mode after years of
rapid growth. The company has said its efforts - closing stores and
cutting costs - are beginning to bear fruit despite the recession
and an aggressive challenge from McDonald's Corp. (MCD). Starbucks
has also started experimenting with branding and formats to draw
customers turned off by the Starbucks name.
For the quarter ended June 28, the coffee giant reported
earnings of $151.5 million, or 20 cents a share, compared with a
loss of $6.7 million, or 1 cent a share, a year ago. Excluding
restructuring charges, earnings rose to 24 cents a share from 16
cents.
Net revenue declined 6.6%, to $2.4 billion, as overall
same-store sales fell 5%.
Analysts polled by Thomson Reuters were looking for per-share
earnings of 19 cents on revenue of $2.38 billion.
Starbucks said U.S. comparable-store sales fell 5%, the seventh
straight quarterly decline. Traffic fell 4%, and average
transaction totals 2%.
International revenue dropped 11%, while U.S. revenue fell
6.5%.
After topping its third-quarter cost-cutting target, the company
also noted that it now expects $550 million of cost savings for
fiscal 2009, topping the $500 million target.
For fiscal 2009, Starbucks expects adjusted earnings of 74 cents
to 75 cents a share. Wall Street expects 70 cents.
The company also sounded an encouraging note on the fiscal year,
saying it expects growth of 13% to 18% in adjusted earnings per
share.
-By Jay Miller, Dow Jones Newswires; 212-416-2355;
jay.miller@dowjones.com