Shares Of Starbucks Slide, After Company Warns That Commodity Inflation Will Whack Earnings

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A strong quarter from Starbucks is marred by this jolt of reality

  • The company now expects EPS of $1.43 to $1.47, reflecting 15% to 20% growth over fiscal 2010 non-GAAP EPS on a 52-week basis. No restructuring charges are anticipated in fiscal 2011.
  • The company also expects EPS for fiscal Q2 and Q3 to be in the range of $0.32 to $0.33 in each period, and EPS in fiscal Q4 is expected to be approximately $0.35.
  • Commodity costs, which are now expected to have an unfavorable impact on EPS of approximately $0.20 for the full fiscal year attributable primarily to higher coffee costs, are reflected in the revised EPS target.

Current estimates had been at $1.49. The stock is off about 2% after hours.

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