Higher Dairy Costs a Potential Concern at Starbucks

| About: Starbucks Corporation (SBUX)
This article is now exclusive for PRO subscribers.

Peter Bocian, CFO at Starbucks Corp., said that the company expects dairy prices to be a "negative" in 2008 while speaking at the Goldman Sachs retail conference on Wednesday. He noted the company has tried to offset the higher prices of dairy and other commodities through two price increases over the last 12 months. "We're still doing fairly strong. The macroeconomic factors have had some impact but not a huge one on our sales," Bocia said. He also backed the company's 2007 earnings forecast between $0.87 and $0.89 and net revenue growth of 20%, but admitted that hitting the high end of the estimate would be "challenging." The company expects revenue growth of about 18% in 2008 as well. Starbucks closed down 1% to $27.44 on Wednesday.

Sources: MarketWatch, CNN
Commentary: Starbucks to Raise Beverage PricesBook Review: Grande Expectations - A Year in the Life of Starbucks' Stock
Stocks/ETFs to watch: SBUX. Competitors: THI, MCD. ETFs: VCR, IYC
Earnings call transcript: Starbucks F3Q07 (Qtr End 7/1/07)

Seeking Alpha's news briefs are combined into a pre-market summary called Wall Street Breakfast. Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.