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SBUX: Anyone for Coffee?

By Jordan Kahn

About this article:
Starbucks reported a very solid fiscal fourth quarter. EPS topped estimates by coming in 3 cents ahead of expectations at $0.24 for the three months ended September and top-line revenues also beat guidance, ringing in at $2.42 billion. Same-store sales were also better than expected, declining 1.0% vs. 5.0% last quarter. And operating margins rose nicely to 10.4%, even though some whisper numbers on the Street were looking for 11%. Management noted that same-store sales saw linear improvement throughout the quarter, implying that business has continue to strengthen in recent months. The CEO said, "We are seeing broad-based improvement across our global business and are cautiously optimistic about the upcoming holiday period." The company also indicated that cost savings finished FY2009 ahead of plan, realizing $580 million in savings vs. the stated goal of $550 million. Food items contributed nicely to the average ticket size during the...

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