Starbucks Corp.'s chief financial officer said on Thursday the high end of the coffee shop chain's 2007 earnings forecast will be very challenging due to current market conditions, including higher dairy costs.
CFO Michael Casey also said the company would maintain the number of U.S. store openings at about 1,700 annually for the next few years.
Shares of Starbucks were down 3.4 percent to their lowest level since October 2005 and were the second-biggest drag on the Nasdaq 100.
Starbucks has forecast 2007 earnings of 87 cents to 89 cents per share, while analysts, on average, expect 89 cents per share, according to Reuters Estimates.
We recognize that the upper end of that range will be very challenging in the current environment, Casey said during a presentation at the William Blair Growth Stock Conference, which was broadcast over the Internet.
Dairy has risen at an extremely rapid rate in recent months, he added.
Casey said the Seattle-based company still plans to open 2,400 stores this year, including 1,700 in the United States. The number of U.S. store openings will likely not increase next year, he said.
Going forward, maintaining the number of U.S. openings at the current level over the next several years will allow us to be more selective in choosing locations and will reduce the pressure new stores put on existing stores, he said.
Starbucks plans to increase the number of international stores by 20 percent annually over the next few years, Casey said.
He repeated a previous company forecast that same-store sales will rise 3 percent to 7 percent in 2007.
Shares of Starbucks were down 93 cents to $26.39 in morning Nasdaq trade.
(Reporting by Nichola Groom)