Starbucks Completes Accounting Review

The company reaffirms its 2005 earnings guidance.
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Starbucks (SBUX) - Get Report has reviewed its lease-related accounting and determined that its current method of accounting for tenant improvement allowances and rent holidays isn't consistent with generally accepted accounting principles.

The company said after the bell Wednesday that it corrected its accounting for both items, and there is no effect on previously reported fiscal 2004 or first-quarter 2005 earnings, as well as its fiscal 2005 earnings per share target of $1.15 to $1.17 a share, excluding stock option expenses.

In addition, Starbucks said its long-term goal to boost earnings per share by 20% to 25% per year for the next three to five years is similarly unaffected.

Shares of Stabucks closed down 12 cents to $50.39.