Starbucks' Chief Financial Officer Michael Casey, speaking at an analyst conference in Chicago, said the company has been hit in part by higher dairy costs. According to a slideshow accompanying his presentation, dairy commodity costs are estimated to nearly double this year.
Starbucks has forecast a full-year profit of 87 cents to 89 cents a share, and the company still sees earnings within that range. Casey's cautious comments, however, sent shares down 86 cents to $26.46 on heavy volume, since Starbucks is a fast-growth company that often is punished by investors for any performance that is seen as less-than-stellar.
Wall Street was expecting Starbucks to meet the high end of its forecast; according to Thomson Financial, analysts have an average estimate for earnings of 89 cents a share.
Elsewhere within its presentation, Starbucks said it expects full-year same-store sales growth of 3% to 7%, consistent with its long-term expectations. The company anticipates 20% net revenue growth for the fiscal year, which ends in September.
Starbucks expects to open 2,400 new stores in fiscal 2007, bringing its total to roughly 14,840.