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The solid quarterly performance was followed by a full-year forecast that was slightly below Wall Street expectations as Starbucks acknowledged that it continues to struggle with higher costs for coffee beans, dairy products and other ingredients it needs. Starbucks said these costs were $105 million higher for the quarter than this time last year, sending its operating margins down from 17 percent to 16.2 percent for the quarter. Starbucks said commodity costs will add up to $230 million in costs for the full fiscal year but it anticipates the pressure will lesson in the second-half of the year. Starbucks nudged up the lower-end of its earnings guidance. It now expects to earn $1.78 to $1.82 per share for the full year, up from prior guidance of $1.75 to $1.82 for the year. But it falls just short of analyst expectations of $1.83 per share, according to FactSet. Jack Russo, an analyst with Edward Jones, said the modest outlook and lower margins drove some investors away in after-hours trading. On the news, the company's shares fell 54 cents to $47.80 after the markets closed. Starbucks remains a strong growth company, Russo said, but the stock is already rich. It has hovered near record highs this week. Its shares have traded between $30.75 and $48.39 in the past 52 weeks.
[Associated
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