NEW YORK – As more people visited Starbucks cafes and spent more at the end of summer, the company's fourth-quarter net income nearly doubled, handily beating estimates, and the company raised its target Thursday for fiscal 2011 profit.
The world's largest cafe chain earned $278.9 million, or 37 cents per share, in the quarter that ended Oct. 3. That compares with $150 million, or 20 cents per share, a year earlier.
Revenue rose 17.2 percent to $2.84 billion.
Analysts on average expected the Seattle company to earn 32 cents per share on revenue of $2.77 billion, according to Thomson Reuters.
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The traffic increase was particularly strong in U.S. Starbucks stores, where 6 percent more people came in and each spent 2 percent more, on average, than a year earlier. Abroad, 4 percent more people came in and spent an average of 3 percent more.
Revenue at stores open at least a year rose 8 percent in the U.S. and around the world during the quarter, Starbucks said. The figure is key for retailers because it excludes stores that opened or closed during the year.
Starbucks shares soared on the news. After setting a new 52-week high of $30 during regular trading Thursday and closing at $29.75, up 2.2 percent, they rose to $30.52 in aftermarket trading. That's another 77 cents, or 2.6 percent.
For the full year, the company earned $945.6 million, or $1.24 per share, more than double the $390.8 million, or 52 cents per share, it earned in fiscal 2009. This year's fiscal calendar included an extra week. Revenue rose 9.5 percent to $10.71 billion.
Analysts expected earnings per share of $1.24 on revenue of $10.63 billion.
The company now expects earnings per share of $1.41 to $1.47 for next year, up from $1.36 to $1.41 per share. Analysts expect $1.43 per share, according to Thomson.
Starbucks announced Thursday that it has informed Kraft Foods Inc. that it is ending their decade-old agreement for distributing Starbucks' coffee to grocery stores. Starbucks did not say what the deal was worth, or if it or another company would take over distribution.
Sales at grocery stores and other retailers are increasingly important to Starbucks, which now also sells Via instant coffee. They are another way to reach shoppers who may avoid cafes as they limit spending in the down economy.
CEO Howard Schultz told investors the company plans to have more products available in stores in the future, after first introducing them in its cafes.
Speaking during a conference call Thursday to discuss Kraft's earnings, Kraft CFO Tim McLevish said Starbucks hadn't given formal notice of its decision, but he said Starbucks "has expressed their desire to control their strategic brands."
McLevish said Kraft's distribution of Starbucks' Seattle's Best brand coffee has grown from $50 million in sales to $500 million, and he said the Northfield, Ill., company respects Starbucks' decision.