Starbucks (NASDAQ: SBUX) put an extra tremor in the steps of caffeine addicted investors this morning when it announced that it expected the rising cost of coffee to derail profits more than previously anticipated. This announcement followed an adjusted earnings forecast that came in below analysts’ expectations. But even with increased coffee prices and decreased earnings, SBUX plans some expansion in 2011, including the opening of 500 new stores globally. Its products’ continued presence on retailers’ shelves also give it some promise this year. After the revised guidance was issued today, SBUX fell 1.72 percent, from $33.65 to $33.07.
SBUX isn’t alone in lowering guidance for 2011. Green Mountain Coffee Roasters’ (NASDAQ: GMCR) stock hit a snag in December when it projected a lower bottom end in its projected profit range. At the time, it fell from $33.81 to $31.96 the day after the announcement. Today, however, it climbed 1.64 percent from $34.80 to $35.37.
Peet’s Coffee & Tea (NASDAQ: PEET) also rose today after SBUX’s news was released. PEET climbed 2.34 percent from $38.46 to $39.36.
Covestor models with exposure to this sector include: MergerArb, Small Cap, Buy and Hold Value, Flexible Value, and High Earnings Momentum.
*Prices and charts courtesy of Yahoo Finance.
