Starbucks (NASDAQ:SBUX) shares fell about 4% in yesterday's after-hours trading and continued to sink in today's very early trading. The coffee purveyor reported stellar same-store numbers for February, with sales rocketing up 13% and revenues up 32%. Despite the good news, CEO Howard Schultz's statement that such growth is "unsustainable" apparently spooked some investors.
We already suspected that the gains of early 2004 might be unsustainable. Starbucks had a great first quarter, riding the success of its gift cards, which were a popular gift over the holidays. Similar to many retailers' gift card sales, it was prognosticated that the benefits would continue to boost sales into February as people used up their credits. In addition, the company's annual brewing event helped sales for the month.
Nothing has really changed here. Starbucks still says that fiscal 2004 same-store sales growth should stay in the range of 3% to 7%, which it said back in November. It also stood by its previous expectation for revenue growth of 20% for the year.
Foolish investors take a buy-and-hold strategy for quality stocks and don't let occasional blips scare them off. Though such strong sales right now might make for a tough comparison next year, this is by no means a reason to believe Starbucks is losing its shine.
Do you think Starbucks will run out of steam anytime soon? Talk to other Foolish venti latte fans on the Starbucks discussion board.
Alyce Lomax does not own shares of Starbucks.
