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Starbucks posts strong fourth-quarter earnings

Starbucks Corp. reports on Wednesday its fourth-quarter  earnings rose 49 percent.
/ Source: The Associated Press

Starbucks Corp. said its earnings rose 49 percent in its fiscal fourth quarter as the coffee retailer benefited from aggressive expansion.

For the quarter ended Oct. 3, the Seattle coffee giant reported earnings Wednesday of $103.4 million, or 25 cents per share. That compares with $69.6 million, or 17 cents per share, in the comparable period last year. Starbucks also benefited from the fact that fourth-quarter 2004 had 14 weeks, one week longer than fourth-quarter 2003.

The extra week improved the quarterly results by about 3 cents per share.

Revenue for the quarter rose 34 percent to $1.45 billion, up from $1.08 billion a year ago. Without the extra week, the company said revenue would have risen 25 percent.

The results met expectations of analysts polled by Thomson Financial First Call, who predicted earnings of 25 cents per share on revenue of nearly $1.43 billion.

Chairman Howard Schultz said aggressive store expansion and innovation in food, beverages and other products helped Starbucks' performance.

In fiscal year 2005, the company said it expects to continue its brisk expansion, with plans to open 1,500 new stores worldwide.

Starbucks has announced long-term plans to open 30,000 stores worldwide, with about half of those in the United States. It now has about 8,500 stores globally.

Starbucks forecasted earnings per share of between $1.12 and $1.15 in the current fiscal year, excluding stock option expense. Revenue is expected to grow 20 percent over the fiscal 2004, excluding the impact of that fiscal year's 53rd week, and quarterly earnings are expected to grow 20 to 25 percent.

For fiscal 2004, earnings were $391.8 million, or 95 cents per share, compared with earning of $268.3 million, or 67 cents per share, a year earlier. Revenue was $5.29 billion, up from $4.08 billion.