Starbucks Corp. said Thursday that second-quarter profit rose 18 percent on demand for new latte and Frappuccino flavors and the addition of more cafes.
The Seattle-based coffee retailer reported net income of $150.1 million, or 19 cents a share, up from $127.3 million, or 16 cents a share, a year earlier. The latest result met estimates.
Sales increased 20 percent, to $2.26 billion. Same-store sales, or sales at stores open at least a year, rose 4 percent. Same-store sales are considered the best indicator of a retailer’s health. A year earlier, Starbucks posted a same-store sales gain of 10 percent.
This was the “toughest quarter probably in the history of the company” for same-store comparisons, said Chief Executive Jim Donald.
Starbucks added Latin-inspired dulce de leche drinks and expanded its breakfast menu to more stores to keep customers from going to McDonald’s Corp., which has marketed new coffees. Starbucks has added cafes at a pace of seven per day in countries such as Egypt and China as it seeks to triple its store count to 40,000 locations worldwide.
“Starbucks customers go to the stores for the ambiance and the experience,” said Reed Bender, a money manager at Robert Bender & Associates in Pasadena, Calif. “The opportunity for the company long-term really exists overseas.”
The company reiterated its full-year profit forecast of 87 to 89 cents a share. Analysts surveyed by Bloomberg News are forecasting 89 cents a share.
The report came out after the close of trading.
In other earnings news:
-CBS Corp. said first-quarter earnings fell 6 percent, hurt by the sale of radio stations and lower syndicated TV income.
The New York-based company, which also operates outdoor advertising and publishing units, said net income fell to $213.5 million, or 28 cents a share, from $226.9 million, or 30 cents a share, in the year-ago period. Excluding items, CBS would have earned 33 cents a share, beating estimates by 1 cent a share.
Revenue rose 2 percent, to $3.66 billion. Television paced the gain, as the broadcast of the Super Bowl pushed ad revenue up 9 percent. But the TV unit’s operating income fell 31 percent on lower syndication earnings. Revenue at radio, long the sick man of the company as listeners migrate to MP3 players and commercial-free satellite radio, plunged 9 percent.
CBS has been the top-rated network for four consecutive years, but prime-time advertising revenue fell 5 percent in the first quarter, the company said. Goldman Sachs analyst Anthony Noto said TV revenue growth will likely continue to slow as ratings slip.
But Chief Executive Leslie Moonves said he thinks CBS and other networks will get credited in the ratings for viewers who tape shows with digital video recorders. They are not counted by the Nielsen system.
CBS stock added 25 cents, to $32.06, Thursday on the New York Stock Exchange.
