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Starbucks brews up a strong profit

 Starbucks Corp. , the world's largest coffee shop chain, on Wednesday said its first-quarter profit rose 41 percent on strong sales growth, beating forecasts.
/ Source: Reuters

Starbucks Corp., the world’s largest coffee shop chain, on Wednesday said its first-quarter profit rose 41 percent on strong sales growth, beating forecasts.

The Seattle-based company posted profit of $110.8 million or 27 cents per share in the quarter ended Dec. 28, up from $78.4 million or 20 cents per share in the year-earlier period.

Starbucks had predicted a quarterly profit of 25 to 26 cents per share, driving Wall Street’s consensus forecast of 26 cents, as reported by Reuters research, a unit of Reuters Group Plc.

The company also modified its full-year 2004 profit forecast to a range of 86 to 87 cents per share, compared to a range of 84 to 87 cents previously.

Net revenues rose 27.7 percent in the quarter to $1.3 billion, boosted by strong December holiday sales and growing use of Starbucks’ stored-value purchase card, the company said.

Starbucks in 2004 plans to add 1,300 stores to its global chain of 7,567 cafes, with sales growth of 20 percent and earnings growth of 20 to 25 percent.

Before the announcement, Starbucks shares closed at $35, up 0.5 percent, extending a recent run to record highs.