|
 |
| Frappuccinos got more expensive in October,
boosting margins |
US coffee chain Starbucks saw its profits for the three months to 3
April rise on the popularity of a new chocolate drink and more cafe
openings.
Its profits soared 27% to $100.5m (￡52.8m), up from $78.9m a year ago.
Sales beat expectations, helped by 669 new store openings in the past
12 months. Second-quarter sales rose 22% to $1.52bn from the year-ago
quarter.
The company raised its forecast for the year and Starbucks shares rose
$1.29, or 2.8%, to $48 in after-hours trading.
Excluding an extra week in 2004, analysts expect revenue for the year
to grow about 20% to $6.38bn, from last year's $5.29bn
The company plans to open about 1,500 new stores
in its 2005 financial year, with 550 new cafes and 525 licensed
cafes opening in the US alone.
It also plans to expand in China where it already has 300 cafes.
Starbucks, not known for low prices, increased its operating margins by
raising prices on speciality drinks like cappuccinos and frappuccinos in
October.
It added new caramel drinks and deserts as well as its Chantico
chocolate drink.
The company said it was not worried about high futures prices for
coffee, implying that coffee bean costs will go up.
"We take a long-term view on coffee. We probably have inventory for 20
months," said James Donald, chief executive officer of Starbucks.
He told Bloomberg TV he was "mindful of the competition" from companies
like McDonald's, which are trying to improve their coffee.
(BBC) | 
Updated: 2005-04-28 08:52
