December 11, 2009
Shares of Starbucks Corp. (SBUX | Quote | Chart | News | PowerRating) climbed steadily until around 2:00PM on December 11. The stock was range-bound for the remainder of the afternoon, but finished up by $1.01 at $22.31 on above average volume. The coffee shop chain's shares have risen 14% since it reported quarterly profit growth on Nov. 5.
How? Fiscal fourth-quarter net income multiplied twenty-seven times to $150 million, or 20 cents a share, after the company closed stores. Revenue dropped 4% to $2.4 billion. The company's gross margin widened from 13% to 20%, and its operating margin increased from 3% to 9%. Its balance sheet is liquid, with $666 million of cash and $550 million of debt. During the past three years, Starbucks has increased revenue 8% annually, on average, as profit declined.