Starbucks Corporation (SBUX) has been in a turnaround mode the last few quarters. Last week it posted its third earnings surprise in a row. Its turnaround strategy appears to be paying off for shareholders as the stock is now trading at new 52-week highs.

Founded in 1971 in Seattle, Starbucks is one of the largest coffee retailers in the world.

Starbucks Beat by 14.29% in the Fiscal Fourth Quarter

On Nov 5, Starbucks reported its fiscal fourth quarter 2009 results and beat the Zacks Consensus Estimate by 3 cents. Earnings per share were 24 cents compared to the Zacks Consensus of 21 cents. That is a 140% increase over the 10 cents a share reported in the year ago quarter.

Revenue, however, fell 4% to $2.42 billion from $2.52 billion in the fourth quarter of fiscal 2008. Both the U.S. and International segments each saw a 4% decline in net sales. Comparable U.S. store sales slid 1% in the quarter.

By the end of fiscal 2009, the company had completed the majority of its previously announced store closings which included about 800 U.S. stores, 61 stores in Australia and 40 stores in other international markets.

Outlook for Fiscal 2010

With the majority of its store closings behind it, Starbucks appears more optimistic about the coming year. It is projecting revenue growth for fiscal 2010 in the low-to-mid single digits primarily due to what the company hopes is positive comparable store sales, a 53rd fiscal week and about 300 planned net new stores.

Starbucks is still looking overseas for its growth as it plans to open about 200 net new stores in the international market. In the United States, it will be looking to add about 100 net new stores.

Zacks Consensus Estimates Rise

Given the company’s fourth quarter earnings surprise, analysts have moved to adjust estimates higher. The first quarter 2010 Zacks Consensus Estimate has jumped 3 cents to 26 cents in the last 7 days, with 5 analysts raising and 1 analyst lowering out of 15 total analysts.

Similarly, fiscal 2010 estimates rose 5 cents to 97 cents in the last week. Analysts expect 2010 earnings growth of 21.79%. Looking ahead, analysts are also bullish about fiscal 2011, projecting 15.41% earnings growth.

SBUX at 2-Year High

Starbucks’ stock has been on quite a run. The Zacks #1 Rank (strong buy) stock has recently been hitting 52-week and 2-year highs.

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