Starbucks perking up
AP
Starbucks’ cost-cutting strategy is starting to pay off.
The company spent the past year slashing expenses, laying off workers and reinventing the food it sells. It closed roughly 800 locations and tweaked prices for some drinks.
Those efforts and an increase in consumer spending helped the chain boost profits in its fiscal fourth quarter.
Starbucks reported its earnings rose to 20 cents per share from a penny a share a year earlier.
Starbucks also raised its profit outlook. It now expects earnings per share to climb between 15 percent and 20 percent in 2010.
Consumers are feeling better about buying upscale coffee, and they’re responding to the company’s menu changes too. More people are visiting Starbucks shops, and they’re spending more money when they do.
In trading for the day, Starbucks shares rose $1.42, or 7.2 percent, to $21.12.
Associated Press
