Starbucks Corp (SBUX.O) posted quarterly profit that topped Wall Street's expectations on more visits from its relatively well-heeled customers, and raised its fiscal year forecast above analysts' estimates.
Sales at U.S. cafes open at least 13 months jumped 8 percent in the quarter, more than the 5.3 percent rise analysts expected.
The world's biggest coffee chain gets roughly 80 percent of its revenue from the United States, where traffic was up 6 percent and average spending per visit rose 2 percent.
Chief Financial Officer Troy Alstead on Thursday told Reuters that menu price increases accounted for the bigger part of the rise in spending, but also that customers were also buying more food.
Starbucks targets more affluent consumers than the typical U.S. fast-food chain.
Those customers have fared better than their lower-income counterparts as the U.S. economy sputters, and they have resumed spending on discretionary items like $4 lattes and organic foods -- as evidenced by strong same-store sales results from chains like Starbucks, Chipotle Mexican Grill (CMG.N) and Whole Foods Market Inc (WFM.O).
Same-restaurant sales rose 5 percent for Starbucks' international business during the quarter.
Starbucks shares, which also are benefiting from a massive restructuring that closed more than 900 cafes and slashed costs, are up 60 percent from a year ago.
NET INCOME JUMPS
The Seattle-based company said net income for its fiscal third-quarter ended July 3 rose 34 percent to $279.1 million, or 36 cents per share, beating analysts' average estimate by 2 cents per share, according to Thomson Reuters I/B/E/S.
Revenue rose 12 percent to $2.93 billion.
Starbucks boosted its fiscal year earnings forecast to $1.50-$1.51 per share from $1.46 to $1.48 a share, previously. Analysts, on average, were expecting a fiscal 2011 profit of $1.50 per share.
The company also forecast a 15 percent to 20 percent increase in earnings per share in 2012 and a 10 percent increase in revenue. The forecast is based on mid-single digit comparable store sales growth and the opening of net 800 new stores.
Alstead said Starbucks has locked in coffee prices for the coming fiscal year as the market for beans remains volatile.
The company still expects commodity costs, particularly coffee, to take a 22-cent per share bite out of fiscal 2011 earnings.
"Coffee prices in '12 will be higher than '11 to the tune of 21 cents a share," Alstead said.
Shares rose to $40.84 in after-hours trade from their Nasdaq close of $39.98.