Starbucks Plans Major Expansion in China

Starbucks (SBUX) said Wednesday that it will boost worldwide sales by expanding its store count more than sixfold in China over the next five years, boosting U.S. stores' sales capacity and broadening its consumer-products line.

At its biennial investor conference, the world's largest coffee shop operator said it plans to expand to at least 1,500 stores in mainland China by 2015, up from only 220 stores as of Oct. 3, and also plans to grow in Brazil, Russia and India. In addition, Starbucks hopes to encourage customers to buy food and beverages at more times of the day by expanding its menu items.

The company's fiscal fourth-quarter earnings earlier this month foreshadowed this latest announcement. CEO Howard Schultz described same-store sales growth in China as "fantastic," and the company said it was in discussions with potential partners to open stores in India.

Starbuck's posted a fiscal fourth-quarter profit that surged 86% from a year earlier, both because of more customers and a higher average bill per customer, while overseas revenue grew 21%, or 12% when an extra week in the quarter is factored out.

Shares rose 3.6% to close at $31.70 Wednesday.

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