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Starbucks’ 2Q profit climbs eight-fold

Starbucks Corp. says its second-quarter profit ballooned more than eight-fold as its revenue climbed 9 percent.
Image: A Starbucks drink is seen on a table in New York's Times Square
A Starbucks drink is seen on a table in New York's Times Square on April 21. Starbucks earned $217.3 million, or 28 cents per share, for the quarter that ended in March.SHANNON STAPLETON / Reuters
/ Source: The Associated Press

Starbucks Corp.'s second-quarter profit rose more than eight-fold, as more customers visited its U.S. cafes — and spent more when they did, company executives said Wednesday.

Meanwhile, the company's effort to shore up its international business, cut costs and boost sales in venues other than its own stores helped the Seattle company earn a better-than-expected $217.3 million, or 28 cents per share. That figure, for the three months that ended in late March, includes a one-time charge that amounted to a penny per share.

During the same period last year, Starbucks earned just $25 million, or 3 cents per share, weighed down by hefty charges. Its revenue rose 9 percent to $2.53 billion, up from $2.33 billion.

Both figures beat Wall Street forecasts. Analysts surveyed by Thomson Reuters, who typically exclude one-time charges from their estimates, expected Starbucks to earn 25 cents per share on revenue of $2.41 billion.

"I think the trends we're seeing in the business are real and sustainable," CFO Troy Alstead told The Associated Press.

Starbucks also boosted its forecast for the year's adjusted profit, saying it expects to earn between $1.19 per share and $1.22 per share. That's up from $1.05 per share to $1.08 per share. Analysts had forecast adjusted profit of $1.12 per share.

Starbucks said a key performance measure — sales in stores open at least a year — climbed 7 percent in the U.S. for the second quarter. That figure, considered key because it isn't skewed by results from stores that open or close during the year, slid 8 percent during the comparable quarter last year when Starbucks was in the throes of cutting costs and closing stores to shore up its business.

"Starbucks' second-quarter results demonstrate the impact of innovation and the success of our efforts to dramatically transform our business over the last two years," CEO Howard Schultz said in a statement. Schultz is also chairman and president of the chain.

It was the fourth consecutive quarter that Starbucks' profit rose and the second that its revenue did.

Starbucks shares climbed 33 cents, or 1.3 percent, to $25.72 in after-hours trading Wednesday. Shares closed at $25.39 in regular activity.