Print

Email story

Comment

Email editor

Starbucks jacks up new store goal

By ASSOCIATED PRESS
Published October 6, 2006

SEATTLE - Starbucks Corp., its stock surging amid healthy sales at existing locations, on Thursday set a new long-term goal to have 40,000 coffee stores worldwide, 10,000 more than its previous target and more than triple the current number.

Starbucks also announced at an analyst meeting in its hometown of Seattle a deal to feature the music it sells in its stores on Apple Computer Inc.'s iTunes online music service.

The coffee retailer did not give a time line for its long-term growth plans but said it expects to have more than 14,000 stores worldwide by the close of its fiscal year ending in the fall of 2007. There are currently about 12,000 Starbucks stores around the world.

Starbucks said half of the eventual 40,000 stores will be outside the United States. The company said Thursday it plans to expand into Brazil, Egypt, Russia and India by the end of next year, giving Starbucks a presence in 40 countries worldwide.

"We've seen the Starbucks experience become universally accepted around the world," Starbucks chief executive Jim Donald told analysts and journalists.

Starbucks said late Wednesday that sales at stores open at least 13 months increased 6 percent for the five weeks ended Oct. 1, compared with the same period ended Oct. 2, 2005. Analysts polled by Thomson Financial had predicted same-store sales would increase 3.3 percent.

Starbucks' shares climbed $2.73 to close at $38.69, up 7.6 percent, Thursday on the Nasdaq Stock Market. The stock had jumped 5.7 percent on Wednesday before the sales report. The stock has traded between $24.86 and $39.88 over the past year.

The expansion plans are being fueled in part by a customer base that is broadening to include people with lower incomes and education levels, said Anne Saunders, senior vice president of global brand strategy and communications.

Five years ago, Starbucks estimated the average income for a person visiting one of its U.S. locations for the first time was $92,000. Now, the company says the average income for first-time customers is $80,000.

Starbucks also said it is seeing more new customers without a college degree, and is seeing an increase in first-time visitors who are Hispanic.

The average age of first-time customers has increased over the five-year period, from 40 to 42 years old, which Saunders attributed in part to an aging U.S. population.

[Last modified October 5, 2006, 22:53:30]