Starbucks on Wednesday said breaking up with Kraft was hard to do, but worth the high price, a day after an arbitrator ruled it must pay a whopping $2.76 billion for ending the companies' grocery coffee partnership early.
The world's biggest coffee chain on Wednesday said it would restate results for the latest quarter to show an operating loss and issue debt following the bigger-than-expected break-up fee.
The payment resolves a three-year spat between the two U.S. brand titans and illustrates how costly it can be to sever a contract.
"It's difficult when a decision like this goes against you. But it is a one-time charge in a single moment in time, and now it's behind us,'' Starbucks Chief Executive Howard Schultz said on a conference call with analysts on Wednesday.
Starbucks has been posting strong revenue and profit gains despite the lackluster U.S. economy, and Schultz said the costly break-up cleared the way for the chain to significantly expand packaged coffee product sales in the grocery aisle.
It "was, without question, the right strategic decision for Starbucks, our brand and our shareholders," Schultz said.
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Shares of Starbucks last rose 0.9 percent in midday trading.
Kraft Foods split into two companies in October 2012, Kraft Foods Group and Mondelez International. Under an agreement between those two companies, Mondelez will receive all proceeds from the resolution of the three-year dispute between Starbucks and Kraft, two U.S. brand titans.
Shares of Mondelez, which makes Cadbury chocolates, Oreo cookies and Trident gum, last rose 2.7 percent.
An arbitrator ruled on Tuesday that Starbucks must pay $2.23 billion in damages plus $527 million for interest and legal fees for terminating its retail packaged coffee sales, marketing and distribution agreement with Kraft at least three years early.