brewed stronger-than-expected earnings for its second quarter and raised its expectations for the year.
The java giant said Wednesday that it earned $127 million, or 16 cents a share, for the quarter ended April 2. That marks a 27% increase from the profit of $100 million, or 12 cents a share, it recorded in the same quarter last year. Wall Street analysts, on average, were expecting earnings of 14 cents a share, according to Thomson First Call.
Starbucks began expensing stock options this year, which the company said reduced its second-quarter results by 2 cents a share.
Based on the second-quarter results, the Seattle-based chain said it now expects earnings for all of fiscal 2006 to be 71 cents to 72 cents a share, up from its previous range of 68 cents to 70 cents a share. For the current third quarter, the company sees earnings of 17 cents a share, in line with analysts' mean estimate.
"We started the third quarter with strong 23% revenue growth in April and 6% comparable store sales growth -- near the top of our 3% to 7% target range," Starbucks said in a statement. "These results were driven by continued customer demand for our handcrafted beverages, with particular strength in our spring lineup of Green Tea beverages."
Shares of Starbucks closed Wednesday down 47 cents, or 1.2%, to $37.35. The company reported its results after the bell.
For the second quarter, Starbucks' total sales rose 24% to $1.9 billion, as same-store sales, or comps, rose 10%. The company said its comps were driven by an 8% increase in the number of customer transactions and 2% growth in the average value of those transactions
It opened 424 new company-operated stores in the quarter, and it plans to open 1,800 new stores in 2006. Starbucks also boosted its capital expenditures forecast to $750 million to $775 million for 2006, an increase from its previous target range of $700 million to $725 million.