Competitor Dunkin' Donuts made headlines Wednesday with its successful IPO but Starbucks, the world's largest coffee-shop operator, said Thursday after the market close its profit rose 34 percent due to increased traffic at its stores in the U.S.
On Wednesday, Dunkin' Donuts IPO raise more than 40 percent on its first trading day.
Thursday, however, it was Starbucks getting the headlines after the market close, as the company's stock jumped in after-hours trading following its strong earnings report.
Starbucks' net income for the period ending July 3 increased to $279.1 million, or 36 cents a share, from $207.9 million, or 27 cents a share, a year earlier.
The Seattle-based company's stock rose 2.48 percent in after-hours trading on the news, to $40.97, after trading up 2.59 percent (up $1.01) during the NYSE composite trading day.
"Store traffic gains and sales leverage helped mitigate the impact of higher commodity costs," said Starbucks chief financial officer Troy Alstead, in a statement.
Starbucks also said earnings for the full fiscal year excluding some items will be as much as $1.51 a share, up from a previous forecast of $1.48. Analysts are predicting in consensus $1.50.
Sales at Starbucks' U.S. stores open for at least 13 months rose eight percent in the quarter, while sales at Starbucks' international stores rose five percent in the quarter, helping the company offset an increase in prices for goods.
Analysts expected same-store sales increases for Starbucks of 5.3 percent in the U.S. and 4.9 percent abroad.
One reason Starbucks increased sales domestically was a 17 percent price increase beginning in May on bagged coffee, sold in its retail stores and other retail outlets.