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After McDonald’s (NYSE:MCD) posted its worst quarterly restaurant sales growth performance in nine years and Chipotle Mexican Grill (NYSE:CMG) forewarned its growth could slow in 2013, earnings disappointments appeared to be the norm for the sector this season. However, despite the weak economy and increasing competition in the industry, Starbucks (NASDAQ:SBUX) released better-than expected quarterly results on Thursday.
For the fourth quarter, Starbucks reported that overall revenue rose 11 percent to $3.36 billion, and net income increased by 0.1 percent to $359 million, or 46 cents per share, beating analysts’ expectations. In particular, the Seattle-based coffee chain showed strong results in same-store sales. International sales at stores open at least 13 months grew 6 percent, based on a 5 percent rise in traffic and a 1 percent rise in average spending per visit. In the U.S.-dominated Americas region, same-store sales rose 7 percent, topping analysts predictions of 5.1 percent.
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Following the earnings release, shares in Starbucks rose 7 percent to $49.90 in extended trading.
“Starbucks’ solid Q4 performance has ideally positioned us to go into the holiday with strong momentum,” chief executive Howard Schultz said during the company’s earnings conference call.
Following this positive earnings report, Starbucks raised its earnings forecast for the next fiscal year; the new estimate is set between $2.06 and $2.15 per share, up from its previous guidance of $2.04 to $2.14 per share. Starbucks is counting on new products like its Verismo single-serving brewer to increase sales and expand the company’s line of products. The coffee company is also anticipating that the holiday season, Starbuck’s most important quarter for sales, will boost results in the next quarter.
However, the company still faces the resolution of tax inquiries in the United Kingdom. Reuters reported in October that Starbucks has paid only 8.6 million pounds of income tax on 3.1 billion pounds of sales since 1998 by reporting losses for the region, even when investors were told that the UK was a profitable market.
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