More people are visiting Starbucks Corp. coffee shops this year than last, and they're spending more money when they do, an executive said Thursday.
But it was the company's hefty cost-cutting that boosted its profit in its fiscal fourth quarter. It had fewer stores than a year earlier, and its revenue fell slightly.
Chief Financial Officer Troy Alstead said the average amount customers spent in each visit to Starbucks rose in the period. And he said sales at shops open at least a year, which dipped 1 percent, were better than the third quarter and the fourth quarter last year.
"We are seeing consumers coming in and spending and we're seeing the improvement across all parts of our day," he told The Associated Press. "We're very encouraged by what we saw in the second half of the (fiscal) year. It gives us some encouragement for the quarter coming up."
Starbucks expects its sales to rise next fiscal year. It says its sales in stores open at least a year, considered a key restaurant and retail measure, also will rise after two years of declines. The company plans to open about 300 new locations, about one-third in the United States.
It also boosted its profit forecast, saying its earnings per share excluding one-time items would climb between 15 percent and 20 percent for the next full fiscal year. It previously expected earnings per share to grow 13 percent to 18 percent.
This year was hard: The company cut costs, laid off workers and reinvented much of the food sold in its shops. It shut roughly 800 locations and tweaked prices for some drinks.
"There's no one at Starbucks doing a victory lap," CEO Howard Schultz said during a conference call with investors.
The gourmet coffee chain earned $150 million, or 20 cents per share, during the three-month period that ended in late September. Excluding one-time items, that amounted to 24 cents per share. Last year, it earned $5.4 million, or a penny per share.
But the Seattle company's revenue dipped almost 4 percent to $2.42 billion.
Analysts polled by Thomson Reuters predict a profit of 21 cents per share on revenue of $2.39 billion for the quarter. Those estimates typically exclude one-time items.
Morningstar analyst R.J. Hottovy said Starbucks may be among the few retailers starting to benefit from some consumers feeling comfortable splurging again on small indulgences, like the company's foamy lattes.
"The sales trends are improving, and things are getting better," he said. "They look solid."
For the full year, Starbucks earned $390.8 million, or 52 cents per share. That's up nearly 24 percent from last year. Revenue for the year slipped 6 percent to $9.77 billion. Excluding restructuring costs, the company's full-year profit was 80 cents per share.
Starbucks shares climbed $1, or 5.1 percent, to $20.70 in after-hours trading Thursday after closing at $19.70.
Take the first steps to building your portfolio.View Course »