Seattle -- Starbucks Corp.’s net income surged a better-than-expected 18% in its fiscal second quarter, as its store traffic increased in most parts of the world. The coffee giant also raised its forecast for the year on the results and said it was accelerating its growth.
For the three months ended April 1, the company earned $309.9 million, compared with a profit of $261.6 million in the year-ago quarter. Revenue rose to $3.2 billion, up from $2.79 billion a year ago. Same-store sales increased 7%.
Starbucks’ same-store sales were strongest in China and Asia Pacific, where sales rose 18%. Same-store sales were up 8% in the Americas but down 1% in the region encompassing Europe, Middle East, Russia and Africa. Starbucks executives attributed the weakness to ongoing economic turmoil in parts of Europe. The company said it is taking similar measures in those markets as it did when it was struggling in the United States, such as introducing loyalty programs and improving service to boost sales. It also is continuing to adapt its offerings to local tastes.
"I will tell you unequivocally that we will turn the European business around in the same way we turned the U.S. business around," company founder and CEO Howard Schultz said in a conference call with investors.
Still, he added that the situation is "very, very tough" and varies greatly by region.
Starbucks, which has more than 17,000 stores globally, said it will accelerate new store growth this year to about 1,000 net new stores around the world. The total includes approximately 500 net new stores in the Americas, with licensed stores comprising approximately one-half of the new additions.
In its most recent quarter, Starbucks opened its 3,000th store in the China/Asia Pacific segment and first store in Norway.