Starbucks Brews Up Growth


Starbucks is brewing up growth.

Shares have virtually tripled from a year ago.

Last Friday, the stock hit a 52-week high after strong quarterly results and a bullish outlook. Looking at the numbers, Starbucks earned 24 cents per share, more than double the year-ago figure, topping the 21-cent consensus estimate. Revenue fell 3.7% to $2.42 billion, just slightly ahead of the $2.39 billion estimate. For the year, profit is expected to get a jolt. Starbucks said it expects profit of 92 to 96-cents a share.

On our show today, Founder Howard Schultz told Maria Bartiromo they 'overachieved on the cost takeout significantly but the real story is Starbucks customers are returning in the last two quarters.' Schultz said the firm is 'demonstrating the strength of the brand.'

Schultz's revamp of the company has clearly proven profitable. Schultz led Starbucks through major cost-cutting initiatives which included the closing of over 800 US locations. He's implemented technological advances in daily operations. And of course, brand loyalty is making a huge comeback.

On Starbuck's conference call on earnings, it was mentioned that “Starbucks has become part of the daily Chinese ritual.”

Schultz told Bartiromo "we will open 300 stores in 2010. A lot of that will be international."

On the social networking front, Starbucks is also 'brewing up' loyalty. Right now, the company is the most recognizable brand online — the biggest brand on Facebook and the biggest brand category on Twitter.

Donna Burton contributed to this article.

UPDATE: This post has been updated to clarify Starbuck's profit expectations.



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