Starbucks Profit Soars by 25% despite Extra UK Tax Payments

US coffee giant Starbucks has reported a surge in quarterly net profits despite making extra payments in Britain following the tax avoidance scandal.

Following a surge in US sales, profits jumped in its fiscal third quarter.

The world's biggest coffee chain reported a net profit of $417.8m (£272.5m, €316.1m) for the quarter ending 30 June, up 25.4% from the year-ago period. Earnings per share increased 28% to $0.55 per share, beating analysts' average forecast by 2 cents per share.

Net revenues for the quarter increased by 13.3% to $3.74bn, as comparable store sales that excludes the effect of new store openings rose 8% driven by a 7% growth in traffic.

Comparable store sales increased 9% in the US, 2% in the Europe, Middle East and Africa (EMEA) region and 9% in China/Asia Pacific.

"Starbucks Q3 results represent the best across-the-board third-quarter performance in our 42-year history," CEO Howard Schultz said in a statement.

"Our powerful Q3 results reflect the outstanding success of our growth platforms both in the US and globally, with all regions delivering an acceleration in comparable store sales and operating margin versus Q2," said CFO Troy Alstead.

"Our ability to grow income at a pace that exceeds revenue growth clearly demonstrates the strategic synergies we generate across our global footprint, which combined with the diversity of our portfolio, enables consistent delivery of excellent results.

Following the strong quarterly results, the company raised its full-year profit forecast, sending its shares rising more than 6% in after-hours trade. Starbucks raised its full-year forecast to $2.22 to $2.23 per share from a previous range of $2.12 to $2.18 per share.

Starbucks has more than 19,200 locations worldwide.

UK Business Overhaul

After facing severe criticism from consumer groups and the British Government over tax avoidance, the coffee chain said in June it paid £5m ($7.7m, €5.9m) in British corporation tax and promised to pay another £15m by the end of next year.

It was for the first time in five years the company had paid UK corporation tax.

The company noted that it continues to make losses in Britain and is making progress in reforming the UK business.

From the EMEA region, the company had an operating margin of 3.2% in the third quarter, compared with 22.3% in Americas and 36.2% in China and Asia Pacific.