Starbucks stays hot in U.S., Asia; shares rise
By Lisa Baertlein
(Reuters) - Starbucks Corp (SBUX.O: Quote) reported stronger-than-expected sales in the United States and Asia despite economic uncertainty worldwide, offsetting unexpected costs including the bill for cleaning up after Superstorm Sandy.
Shares in the world's biggest coffee chain rose 1.9 percent in after-hours trade on Thursday, even though the company's first-quarter profit matched but did not exceed Wall Street estimates and it merely repeated its forecasts for the full year. Starbucks often tops profit expectations and raises forecasts.
Seattle-based Starbucks is frequented by affluent consumers with extra money to spend on premium drinks like lattes and mochas, but the chain's executives joined industry peers in adopting a cautious stance for the new year, largely because of concerns that this month's U.S. payroll tax increase could depress consumer spending.
It's too early to tell whether the tax hike that is reducing take-home pay will have an impact on the company's business, Chief Financial Officer Troy Alstead told Reuters.
Starbucks' results landed a day after fellow restaurant bellwether McDonald's Corp (MCD.N: Quote) reported an unexpected rise in December sales at established U.S. restaurants. But McDonald's also warned that its January same-restaurant sales would fall as it follows strong year-ago results and fights for the business of budget-conscious diners.
"We don't know where the consumer is going to shake out this year," Edward Jones analyst Jack Russo said.
U.S. AND ASIA STRONG
Starbucks reported net earnings of $432.2 million, or 57 cents per share, for the fiscal first quarter that ended December 30, meeting the average analyst estimate compiled by Thomson Reuters I/B/E/S. That was up from $382.1 million, or 50 cents per share, a year earlier. Continued...