Starbucks has been hard hit by the recession as consumers cut back on items such as gourmet coffee. It has closed many locations to save money. But now the company says that demand is starting to pick up.
Chief Executive Howard Schultz said in a conference call that a "more disciplined focus on operations" helped the company increase earnings and that it is seeing improvements in its surveys of customer satisfaction.
During the quarter, Starbucks cut prices on so-called easy-to-make coffees, while lifting prices by as much as 30 cents for larger and more complex drinks, such as a venti caramel macchiato.
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Mr. Schultz said the company is encouraged by the national rollout of its Via instant-coffee product. Via is "resonating with customers" and is having little negative impact on traditional coffee sales at Starbucks, he said.
Starbucks began making Via available in September in all its cafes in the U.S. and Canada, as well as in other locations such as hotels and bookstores. The company created Via, which costs $2.95 for a three pack, to try to reach consumers who aren't inclined to splurge on a regular coffee purchase.
Starbucks, which has about 11,000 U.S. outlets, reported $53.2 million in restructuring charges for its fourth quarter, almost all of which stemmed from store closings. The company said it had shuttered nearly all of the roughly 800 U.S. stores and 100 international stores in its previously announced store-closing plans.
The company is cautiously optimistic about the upcoming holiday season.
