Starbucks Shares Heat Up

Solid same-store sales and new expansion plans cause a strong buzz.
Author:
Publish date:

Starbucks'

(SBUX) - Get Report

stock got a big jolt Thursday after the coffee retailing giant posted a strong rise in same-store sales and boosted its planned number of store openings.

Late Wednesday, the company said its same-store sales rose 6% in September, toward the higher end of targeted range of 3% to 7%. Total revenue for the period jumped 20% to $790 million from last year's $656 million.

For Starbucks' entire fiscal year, which ended Oct. 1, the company recorded a 22% rise in revenue to $7.8 billion, while same-store sales jumped 7%.

As part of an analyst day Thursday, the ever-expanding company said it now is targeting having 40,000 locations worldwide, an increase from its previous projection of 30,000 stores. The company plans to have half of its locations in the U.S. and half internationally.

"As we look at the markets in which Starbucks operates,and the unique ways in which we are able to leverage real estate opportunities, we have determined that the long-term growth opportunity is greater than we previously thought," said President and CEO Jim Donald in a statement.

Starbucks currently has about 12,440 locations, consisting of 8,836 stores in the U.S. and 3,604 internationally.

The company's shares recently traded at $38.26, up $2.30, or 6.4%, on volume of more than 20 million shares.

Starbucks also announced an agreement Thursday to provide its "Hear Music" catalog to

Apple's

(AAPL) - Get Report

iTunes store. Hear Music is a line of CDs that Starbucks spotlights and sells at its stores. The company has increasingly been including entertainment-related products in its stores, promoting CDs from new artists and recently making a foray into movie marketing.