Starbucks, which discussed its latest results in a conference call with financial analysts Wednesday, also reported on sales for January, in which comparable store sales rose 10%. That followed an increase of 7% for the quarter that ended Jan. 1.
Howard Schultz, Starbucks' chairman, called the period ended Jan. 1 "the most successful first quarter in Starbucks history." Encouraged by those results, the company raised its estimate of full year earnings per share by five cents and now says it expects to earn 68 to 70 cents per share.
Jim Donald, Starbucks president and CEO, commented during the conference call that, although the company is "very pleased" with the 10% comparable store sales in January, "We also recognize that same store sales growth at this level is not sustainable." For the year, Donald said, comparable store sales increases will more likely settle in at 3% to 7%.
Donald also commented on a recent trip to China to examine Starbucks operations there, noting that the company ended the quarter with 221 stores in China and sees great promise for the Chinese market. In China and in other international markets, Starbucks plans to open approximately 150 company-operated stores and 350 licensed stores in 2006.
The number of new Starbucks locations in 2006 will total at least 1,800 in fiscal 2006, with Starbucks planning to open approximately 700 company-operated locations and 600 licensed operations domestically, while the rest will open abroad. Starbucks Corp. finished the first quarter with more than 10,500 retail locations in North America, Latin America, Europe, the Middle East and the Pacific Rim.
In addition to its coffee sales, Starbucks has been branching into a number of other retailing ventures within its stores, including music CDs through efforts like its Starbucks Hear Music. Schultz focused on another new avenue Wednesday, pointing out that Starbucks will team with the Lion's Gate film studio to market the studio's upcoming film "Akeelah and the Bee" in a marketing agreement that was announced in January.
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