(Reuters) – Starbucks Corp (SBUX.O) raised its full-year profit forecast, boosting confidence it has entered a new phase of growth and sending its shares up 2 percent.
Higher drink prices and improving traffic in its stores gave the world’s biggest coffee company leeway to hike its fiscal 2011 outlook. Starbucks in September raised prices on large and labor-intensive drinks to offset surging prices for coffee and other commodities.
U.S. sales at restaurants open at least 13 months jumped 8 percent in the fiscal fourth quarter from a year ago, driven by a 6 percent rise in customer visits and a 2 percent increase in spending per visit.
International same-restaurant sales were up 7 percent, helped by a 4 percent traffic increase and a 3 percent rise in average ticket.
Efficiency efforts and cost controls also had a part in the company increasing its earnings target for the 2011 fiscal year to a range of $1.41 to $1.47 per share, from $1.36 to $1.41 previously. Wall Street’s average forecast was for $1.43, near the low end of the new range.
“The increase really is based on the strength of the quarter we just recorded and the momentum we bring into the new year,” Starbucks Chief Financial Officer Troy Alstead said in a telephone interview.
Shares in Starbucks, which dipped below $8 in 2006, rose 2.1 percent to $30.40 following the company’s earnings report.
The CEO also said Starbucks plans to end its distribution pact with Kraft Foods Inc (KFT.N), which for more than a decade has delivered its bagged coffee to grocery stores and other retailers.
“The details and timing around any transition will be subject to further private dialogue,” said Schultz, who declined to elaborate.
“Starbucks … in recent times has expressed their desire to control their strategic brands,” Kraft Chief Financial Officer Tim McLevish said in a conference call with analysts.
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