Starbucks' first-quarter income up 44%, but stock drops on grim 2011 outlook

Starbucks reported Wednesday that it earned $346.6 million, or 45 cents per share, for the quarter that ended Jan. 2 -- up from $241.5 million, or 32 cents per share, a year earlier. Its revenue rose nearly 8 percent to $3 billion. The company warned, though, that higher commodity costs could eat into 2011 profits. That news sent its shares down in after-hours trading. || Read "Starbucks net income up in 1Q"

Comments

[Aaron]

Cocoa prices will continue to climb. Beginning last year it was due to speculators, and now they will go up even more because of the political situation in Ivory Coast. The legitimate president, Ouattara, is asking sellers to stop exporting cocoa and buyers to stop buying it from the country, to cut off part of the money supply of the former President, Gbagbo, who refuses to leave power. He uses money from taxes on cocoa, the biggest export of the country, to fund his troops and militias. Some major companies are complying, others are not.

[adoubleshotofclarity]

The drop won't last. Margins are better than expected. Traffic is through the roof. Give it a few weeks for the institutional investors to digest today's news and you'll start seeing ratings upgrades. Commodities will always fluctuate, and the market still has the kind of jitters that come with even a hint of bad news, but Starbucks is going strong. I'll be holding onto my stock options for at least another quarter. 35+ isn't far away...

[karldotcom]

I had trouble finding parking at my two local Starbucks stores today...went to a third store. That hasnt happened since those stores both opened (past 4 years)

The DM has also prohibited employees from parking in the store lots and making them use street parking also.

[the geek]

Profits are up, and yet they are still holding on to my 2010 401(k) match. Anyone seen yours deposited into Fidelity account this week?

[adoubleshotofclarity]

Its nothing malicious the geek. Common practice to take a few weeks to get final data and do due diligence on eligibility, match rate, etc. last year mine showed up on jan 25 (a monday), so id wager they will be there next monday.

[BAYAREABUX]

I think we found out what the "February surprise" is on the call... a re-lauch of VIA. Sample sample sample and sell your heart into it!

[datedotit]

So, I wonder if Starbucks will look into cost of living increases for Barista's? I mean - they are sqeezing the hell out of us on labor...which accounts for a sizable portion of this profit margin, make no doubt about it.

I bet not....

[harmaa]

I bet Howie got a nice cost of living increase in his pay last year...