Starbucks sees robust growth; focus on China
(Reuters)
Updated: 2006-02-14 19:15

Starbucks Corp. said on Tuesday it would meet market forecasts by delivering annual earnings growth of at least 20 percent over the next three to five years as China becomes a focus for its global strategy.

Starbucks Coffee Corp Chairman Howard Schultz is seen in Tokyo, September 26, 2005. Starbucks Corp. said on Tuesday it could deliver annual growth in earnings per share of at least 20 percent for three years or more. [Reuters]

"Over the next three to five years we can maintain top line growth of 20 percent and earnings per share growth of 20 to 25 percent," Starbucks Chairman Howard Schultz told reporters, referring to company-wide results.

Sixteen analysts polled by Reuters Estimates had an average outlook for the company's revenue growth this year of 21.9 percent and earnings per share (EPS) growth of 31.7 percent.

The company was doing better than expected in China, the market with the biggest potential, Schultz said.

The outlook "demonstrates that we can continue to consistently execute the way we have," he told Reuters.

Starbucks posted on February 1 that its earnings rose 20.4 percent to $174.2 million for its latest quarter, helping to send its share price to a record high of $35.5 last week.

"One of the reasons why the stock has continued to climb, in my view, is that we have demonstrated a consistent ... ability at a minimum to meet expectations," said Schultz, whose company has ambitious plans to expand globally, especially in China.

Starbucks opened its first store in China in 1999 and now has 165. Greater China President Jinlong Wang said the company had last year enjoyed its fastest year of growth in China, helped by Beijing's lifting of restrictions on foreign retailers.