Starbucks Hopes a Price Hike Perks Up Profit

That's what makes their same-store sales important. If it's not going to be able to boost its overall revenue simply by opening new outlets, it's going to need to get more sales out of its existing stores. (The company said that the price hike would not affect its guidance for its upcoming fiscal year).

To be sure, existing-store sales haven't been much of a problem to date. Through the end of August, Starbucks' same-store sales this year had grown 11% from the same period last year. Same-store sales compare results of like outlets open 13 months or more.

But Starbucks Chairman Howard Schultz has cautioned investors that the company expects its same-store sales to grow from just 3% to 7% a year over the long term. And the company's sales do seem to be cooling down a bit. In August, for instance, Starbucks' comparable-stores sales grew by 8%, the smallest gain in more than a year.

After the company posted such strong growth over the last year, those month-over-month and year-over-year comparisons are only going to get tougher, Milton noted. "It's going to be more difficult for them to put up the 20% [overall revenue growth] that they've been promising," he said.

The price hike, which affects only company-owned stores, might help the company do that. The question is whether customers will swallow the increase.

Most analysts seem to think the customers will. The company hasn't increased prices since August 2000. And the price hike is relatively modest; the company estimated that on average, its drink prices would increase about 11 cents.

The company didn't respond to a request for comment on average drink costs or the magnitude of the increase on a percentage basis. But Andrew Barish of Banc of America Securities estimated the average price hike was about 3%. (BofA has done investment banking with Starbucks in the last 12 months).

"I think people feel as if Starbucks is a treat for themselves," said Chris Bonavico, a portfolio manager at Transamerica Investment Management. "They're spending a few dollars to treat themselves during the day. An extra few percent is not going be an inhibitor." (Bonavico's fund does not have a position in Starbucks).