Guess I've been going to Starbucks a little too much.
Starbucks Corp. perked up its net income by 18 percent in its fiscal second quarter, as more customers visited its cafes in most parts of the world. The coffee giant also raised its forecast for the year on the better-than-expected results.
The Seattle-based company's stock nevertheless slid 5 percent in after-market trading as sales showed weakness in parts of Europe.
For the quarter, Starbucks said Thursday that global revenue at cafes open at least a year increased by 7 percent, as a result of more customers and higher spending per visit. The figure is a key metric because it excludes the impact of newly opened or closed stores.
The gains were strongest in China and Asia Pacific, where the figure rose 18 percent. The region is a critical expansion area for Starbucks; by 2014, the company says China will become its second largest market behind the U.S.
Revenue at cafes open at least a year rose 8 percent in the Americas but slipped 1 percent in the region encompassing Europe, Middle East, Russia and Africa.
Chief Financial Officer Troy Alstead said the dip was largely the result of select regions of Europe that were hard hit by economic turmoil. He said the company is "not immune" from high unemployment and fragile consumer confidence in the region.
"It's not unlike what we experiences in the U.S. a few years ago," he noted.
Alstead said Starbucks is taking similar measures in those markets as it did when it was struggling in U.S., such as introducing loyalty programs and improving service to boost sales. The company is also focusing on adapting its offerings to local tastes. In France, for example, a second espresso option was added in response to consumer demand.
In a conference call with investors, CEO Howard Schultz expressed confidence that the measures would prove successful.