Just two years ago, Starbucks was laying off staff and closing hundreds of US stores in its efforts to slash costs and restore the chain to profitability. Now it's reporting record earnings for the fourth quarter, with profits up 86% compared to a year ago.
Starbucks says its turnaround has ushered in a new phase of growth. Sales in the US and abroad increased by 8% during the quarter.
More people are going to its stores and they're spending more while there. CEO Howard Schultz told analysts in a conference call fiscal 2010 will be a defining year in Starbucks history. He says the company's future has never looked brighter.
"Today's results reflect the great strides we have made over the last few years. But the lessons and the insights from the hard work done in connection with our transformational agenda have not been forgotten," says Schultz
He says the transformation has included very strong sales of the new instant coffee VIA beverages. Customizable Frappachinos and the Starbucks gold loyalty program have also been big hits. The quarter also included a new exclusive reserve coffee line that sold out at $25 per pound.
Schultz announced he's rewarding 100,000 employees with special bonuses. In the year ahead, the coffee chain plans to open 100 new stores in the US and 400 abroad.