Starbucks Accelerates Growth

In the US for 2006, Starbucks now plans to open approximately 750 company-operated locations and 650 licensed locations. Internationally, it plans to open approximately 200 company-operated stores and 400 licensed stores.

For 2007, the 2,400 stores will include approximately 1,000 company-operated and 700 licensed locations in the US. The remaining 700, which will be opened in international markets, will include 300 company-operated and 400 licensed stores.

The quarterly results, which company officials discussed in conference call with financial analysts, included record quarterly consolidated net revenue of $2 billion, an increase of 23% from the third quarter of last year. Net earnings climbed 16% to $145 million, up to 18 cents a share from 16 cents per share, and comparable store sales rose 4%.

New stores figured significantly in the financial results that Starbucks reported Wednesday, according to Jim Donald, the company's president and CEO. Donald pointed out that Starbucks opened 559 new locations worldwide, the highest number of new stores that the chain has ever opened in a third fiscal quarter. The Starbucks CEO also noted that July marked the chain's 175th consecutive month of comparable store sales growth and said, "We remain comfortable" with the company's previously stated estimate that comp-store sales will rise 3% to 7% for the rest of the fiscal year.

Commenting on international markets during the conference call, Donald said that Starbucks reached "significant milestones" during the third quarter in a number of foreign countries. In Japan, the company passed the 600-store mark, and in the United Kingdom it opened its 500th store.

Starbucks expected to open a maximum of only 50 stores in the Philippines when it entered that market, Donald said, but it has now opened its 100th location there. The experience in the Philippines demonstrates "the depth of our global store opportunities," Donald said.