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No price hike planned at Starbucks: CEO

Coffee drinkers, rejoice! Or have another cup of joe, anyway.

Despite rising coffee prices, Starbucks CEO Howard Schultz told CNBC on Wednesday he does not plan to raise prices at its roughly 10,000 company-operated stores.

"I think this is a time in America where raising prices is not the right strategy," Schultz said on "Squawk on the Street." "We have to provide value. We have to provide trust with our customers. I want to manage through this without raising prices in our retail stores. We may need to raise prices in the grocery business, which is a different story."

Rising coffee prices had put a bad taste in the mouths of some analysts on Wall Street, though. Some analysts have expressed concern about 2015 prices and argued so long as coffee prices remain high, Starbucks' stock will remain in a rut.

But Schultz, speaking to CNBC's Jim Cramer from the company's shareholders' meeting in Seattle, played down such concerns.

"I think the market, unfortunately, has completely overreacted and misread the coffee situation," Schultz said, noting the coffee company has already purchased nearly 18 months' worth of coffee. He added that coffee accounts for less than 20 percent of its cost of goods, and over the last 40 years, his company has encountered higher prices many times before.

"The truth of the matter is that dairy is probably a bigger issue for us going forward than coffee, but we will be able to maintain our guidance, our EPS and absolutely manage through and negotiate through any rise in coffee costs," Schultz said. "So I think the market should realize that is a nonevent."

Starbucks' stock traded higher in afternoon trading on Wednesday.

(What's Starbucks' stock doing now? Click here for real-time quote of Starbucks)

—By CNBC's Drew Sandholm. Follow him on Twitter @DrewSandholm.

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