WSJ – Starbucks Corp. is branching out in a new direction with the acquisition of Evolution Fresh Inc., a premium juice brand carried in West Coast supermarkets.

The Seattle-based coffee giant, which is expected to announce on Thursday that it just closed the $30 million all-cash deal, is trying to do with juice what it has done with coffee, by turning a commodity-like product into an experience. To do that, the company plans to open a separate retail concept centered around juice, as well as health foods, next year, a company spokesman says.

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Starbucks CEO Howard Schultz

The company has not yet decided how many juice bars there will be, where the first ones will open or whether they will carry the Starbucks logo. Starbucks earlier this year debuted a new logo featuring a larger siren figure without the words “Starbucks coffee,” a sign of the company’s ambitions to move beyond its signature coffee shops.

Starbucks also is seeking to become more of a consumer products company, selling more items in grocery stores as a way to boost overall sales. Starbucks says its consumer products business will one day rival its coffee shops, in terms of sales.

Evolution Fresh, started by the founder of Naked Juice, is a line of fresh fruit and vegetable juices made using a process called high pressure pasteurization, in which the juice isn’t heated, thus helping it retain the nutrients and flavors. The company peels, presses and squeezes the produce itself rather than using pureed or powdered fruits and vegetables. The brand, which will not feature the Starbucks logo, is currently carried in Whole Foods, Safeway, Costco and Trader Joe’s stores on the West Coast. Starbucks plans to broaden distribution of the juice into other supermarkets and to begin carrying them in Starbucks stores starting next year.

(Jimmy Rosenberg, the Evolution Fresh founder who also founded Naked Juice, is no longer involved in Naked Juice. Starbucks currently carries Naked Juice in its stores but will replace it with Evolution Fresh juice.)

This is the first packaged product Starbucks has acquired since 2005, when it bought Ethos Water, a brand of bottled water carried only in Starbucks stores, for an undisclosed sum. In 1999, Starbucks acquired Tazo Tea Company, also for an undisclosed sum, a line of loose leaf, bagged and bottled teas sold in both Starbucks stores and supermarkets.

“The acquisition of Evolution Fresh supports our growth strategy to innovate with new products, enter new categories, and expand into new channels of distribution,” Jeff Hansberry, president of Channel Development for Starbucks, said in a statement. “Not only are we able to tap into the $1.6 billion super-premium juice market, but the acquisition of Evolution Fresh marks an important milestone for us within the $50 billion Health and Wellness sector.”

On a conference call, Starbucks Chief Financial Officer Troy Alstead said prior acquisitions have ranged in size from less than $10 million to less than $100 million, putting its acquisition of Evolution Fresh in the mid-range.

Starbucks Chief Executive Howard Schultz said, “Even though this is a small acquisition in size, it is a significant and strategic decision for the company.”

San Bernardino, Calif.-based Evolution Fresh will be a wholly owned subsidiary of Starbucks. The deal does not change Starbucks’s 2012 financial targets, disclosed on Nov. 3 when the company reported fourth-quarter and year-end earnings.

Bloomberg – Great Atlantic & Pacific Tea Co., operator of almost 400 supermarkets under names including Waldbaum’s, Food Emporium and Pathmark, filed for bankruptcy after failing to compete with wholesale clubs and drugstores.

The Montvale, New Jersey-based retailer, incorporated 110 years ago, also runs stores under its own name, Super Fresh and Food Basics. It listed assets of $2.5 billion and debt of $3.2 billion yesterday in a Chapter 11 filing in U.S. Bankruptcy Court in White Plains, New York.

A shift in consumer spending to wholesale clubs, drugstores and supercenters hurt sales in the quarter ended Sept. 11, A&P said in a regulatory filing. The retailer had $8.8 billion in sales for the year ended in February, according to its website.

“We have taken this difficult but necessary step to enable A&P to fully implement our comprehensive financial and operational restructuring,” Chief Executive Officer Sam Martin said in a statement. “We could not complete our turnaround without availing ourselves of Chapter 11.”

The company announced a turnaround plan in July that included closing 25 stores in five states. It said in September it would sell another seven stores in northern Connecticut. Restoring competitive margins, remodeling stores and increasing cash flows were all goals, the company has said.

Debt, Customers

“The company couldn’t compensate for the combination of high debt and the suddenly fading purchasing power of the customers,” Karl-Erivan Haub, chief executive officer of Tengelmann Group, A&P’s biggest shareholder, said today in an e- mailed statement. The insolvency will help A&P to get a “solid financial basis, to advance necessary restructuring,” he said.

A bankruptcy is needed to bring costs into line with market reality and shed obligations that include $147 million in pension funding and more than $232 million in liabilities for leases the company doesn’t need and hasn’t been able to escape.

An unfavorable supply agreement obliges A&P to obtain 70 percent of its inventory from C&S Wholesale Grocers, Chief Restructuring Officer Frederic F. Brace said in court papers.

“The combination of falling revenues, a leveraged balance sheet, legacy costs, and unfavorable supply relationships could not be fixed outside of Chapter 11,” Brace said.

Union agreements, including pensions and health care obligations also put the company at a competitive disadvantage and “are unsustainable at existing levels,” he added.

Debt Due in June

Meeting liquidity needs with debt totaling $165 million coming due next June 15 prompted the initial move to restructure out of court, A&P said in regulatory filings.

A&P’s second-largest stockholder is Aletheia Research & Management. Holding more than 5 percent of its voting securities are GAMCO Investors, Bank of America Corp., DBD Cayman Islands and Yucaipa Cos. LLC. Ron Burkle’s Yucaipa Cos. also owns all of A&P’s series A-Y preferred stock.

A Yucaipa spokesman, Frank Quintero, didn’t immediately return a call for comment.

Goldman Sachs Group Inc. is the largest holder of the company’s 6.75 percent notes and 5.125 percent notes due in 2011. Elliott & Page Ltd. is the largest holder of 11.375 percent notes due in 2015, according to Bloomberg data.

Tengelmann, which owns Germany’s biggest home-improvement retailer, OBI, and the Kaiser’s supermarket chain, sees no impact on its other business from A&P’s insolvency, spokeswoman Jutta Meister said in an interview.

A&P Shares

The closely held retailer previously wrote down the value of its A&P stake in the past and will now cut it to zero, she said.

Tengelmann, which has had an A&P stake since 1979, owns about 40 percent of the company. The stake had a value of about $64 million when markets closed Dec. 9, according to data compiled by Bloomberg.

A&P secured $800 million in debtor-in-possession financing from JPMorgan Chase & Co. and will have immediate access to a $187 million loan and $200 million in letters of credit, allowing it to keep stores open, according to the filing.

The loan agreement beat out a proposal by pre-bankruptcy lenders that would have given the company only $675 million. Second-lien lenders have agreed not to object to the financing under an inter-creditor agreement, according to a statement in court documents from Stephen Goldstein, a managing director and restructuring adviser Lazard Freres & Co., hired to help the company secure its loan.

S&P Downgrade

Standard & Poor’s downgraded A&P’s debt in October and said it didn’t expect “material improvements in operating performance.”

According to its most recent quarterly report, A&P had a net loss of $153.7 million for the quarter ended Sept. 11. Shares fell 67 percent to 93 cents on Dec. 10 in New York Stock Exchange trading. The stock has declined 92 percent this year.

The New York Stock Exchange said trading in the company’s common stock and its bonds due 2039 was suspended immediately.

A&P was incorporated in New Jersey in 1900, 41 years after the first store was opened on Vesey Street in New York under the name Great American Tea Co.

It changed its name to the Great Atlantic & Pacific Tea Company in 1869, in honor of the completion of the coast-to- coast transcontinental railroad and its intention to operate stores across the country, according to its website.

The company expanded to California, Washington and Canada in the 1930s, with 15,357 stores across the continent.

Workers, Customers

The retailer yesterday sought court permission to continue paying employees and to maintain customer programs such as refunds and price guarantees.

Without such approval, the company would “risk losing market share and raising unnecessary doubts” about operations, it said in court papers. The law firm Kirkland & Ellis LLP represents A&P in the bankruptcy.

The company has 41,000 employees, 95 percent of whom are covered by union agreements, according to the bankruptcy petition.

In July, A&P hired Sam Martin as its second new chief executive officer this year. He succeeded Ron Marshall, who had held the job since Feb. 8. Company Director Bobbie Gaunt resigned from the board Nov. 28, according to a filing.

Brace, A&P’s chief administrative officer, was named chief restructuring officer Dec. 9, he said in a court document. Brace had been the chief financial officer of UAL Corp., parent of United Airlines, and helped guide the carrier through 38 months of bankruptcy restructuring that ended in 2006.

A&P has an interest payment of $13.4 million due Dec. 15 on unsecured notes, Brace said in his filing.

“Failure to make these payments would cause immediate issues” under the debt agreement, he said.

The case is: Re The Great Atlantic & Pacific Tea Co. 10- 24549. U.S. Bankruptcy Court for the Southern District of New York (White Plains). It is assigned to Judge Robert Drain.

To contact the reporter on this story: Tiffany Kary in New York at tkary@bloomberg.net.

To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.

Monte confirmed Thursday afternoon that it will sell itself to a buyout group led by Kohlberg Kravis Roberts for $5.3 billion, including debt.

As DealBook previously reported, the private equity firms will pay $19 a share. It also includes the assumption of about $1.3 billion in Del Monte debt.

Under the provisions of a so-called go-shop period, the company will have until Jan. 8 to find a better offer. The deal is expected to close in March.

The buyout firms have received financing commitments from Bank of America Merrill Lynch, Barclays Capital, JPMorgan Chase, Morgan Stanley and KKR Capital Markets.

Centerview Partners advised the buyout group, along with Bank of America, JPMorgan, Morgan Stanley and the law firm Simpson Thacher and Bartlett.

Del Monte was advised by Barclays Capital and the law firm Gibson Dunn & Crutcher. Its board was advised by Perella Weinberg Partners.

2:19 p.m. | Original Post On a day when Americans feast on turkey and stuffing, the private equity magnate Henry R. Kravis is doing something even bigger: He is buying a food products company.

Del Monte Foods — the pet foods maker, not the seller of pineapples — has agreed to sell itself for about $5 billion, including debt, to a group of buyout firms led by Kohlberg Kravis Roberts, people briefed on the matter told DealBook on Thursday.

A deal with the buyout consortium, which includes Vestar Capital Partners and Centerview Partners’ private equity division, could be announced as soon as Thursday, these people said.

The firms will pay about $19 a share, roughly a 40 percent premium to the company’s average stock price over the last three months.

Representatives for Del Monte, which is based in San Francisco, and the buyout firms declined to comment or could not be reached for comment.

A takeover of Del Monte would be among the largest leveraged buyouts this year, as well as one of the biggest consumer-goods takeovers since the $3.8 billion acquisition of the vitamin maker NBTY by the Carlyle Group this summer.

Private equity firms have been on a tear this year, buoyed by billions of dollars in their war chests and the bond-market boom that has supplied them with cheap debt to finance their deals.

Earlier this week, TPG Capital and Leonard Green & Partners announced a deal to take over J. Crew for about $3 billion. About $10 billion worth of leveraged buyouts were announced this week, the most in one week since the height of the private equity boom in the summer of 2007, according to data from Capital IQ.

Still, the relatively steady stream of takeovers has topped out at about $5 billion, a far cry from the $10-billion-plus mega-deals of the buyout boom earlier this decade. Private equity firms and banks are still discussing how to get larger deals done, but for now they have adjusted to the “new normal.”

A deal for Del Monte would represent another trip into private ownership — and the company’s latest encounter with K.K.R., which sold off the brand in 1991 as part of the buyout firm’s landmark $25 billion takeover of RJR Nabisco. The company passed through other owners’ hands before being taken public by TPG in 1999.

It would also highlight Centerview’s $500 million private equity arm, which is led by James M. Kilts, the highly regarded former chief executive of Gillette who brokered its sale to Procter & Gamble in 2005. A consumer-goods veteran who has also run Nabisco, Mr. Kilts has won admiration from no less than Warren E. Buffett.

While still associated primarily with fruit like sliced peaches, the Del Monte of today draws roughly half of its $3.7 billion in annual sales from pet food brands like Kibbles ‘n Bits and Snausages. (It no longer has ties to Fresh Del Monte Produce, which carries on the business of selling pineapples and bananas.)

Del Monte is a relatively new entrant in the industry, having built up its pet presence from virtually nothing in the last decade through acquisitions like the 2006 purchases of Meow Mix Holdings and Milk-Bone dog biscuits.

Pet snacks and pet foods are among the fastest-growing parts of the consumer-goods industry. Timothy S. Ramey, an analyst at D.A Davidson & Company, praised Del Monte as a “world-class business” in a research note last week, noting that 65 percent of its earnings before income and taxes arose from the company’s pets business.

Pet food merchants, and food businesses more generally, has also proved attractive for private equity firms, which are drawn to the companies’ stable cash flows. K.K.R. has already struck one buyout in the sector this year, acquiring the British retailer Pets at Home for $1.5 billion in January.

NY Times – Updated Burger King is in advanced talks to sell itself to a little known private investment firm called 3G Capital, people involved in the negotiations told DealBook on Tuesday.

A deal could be reached as soon the coming days, these people said, though they cautioned it was possible that the talks could still collapse.

Leading the deal for 3G is Alexandre Behring, a Brazilian who before joining 3G spent 10 years at GP Investments, one of Latin America’s largest private-equity firms.

He sits on the board of CSX since 2008 after 3G began a proxy fight against the railroad. Mr. Behring is a former railroad executive, serving as the chief executive of America Latina Logistica, Latin America’s largest independent railroad and logistics company, which operates more than 13,000 miles of track in Brazil and Argentina.

3G has taken an interest in fast food chains before: It held a 6.7 stake in Wendy’s in 2008. It could not be determined what price is being discussed.

Burger King currently has a market value of $2.4 billion

A deal for Burger King would mark the second time the company was taken private in the past decade. A consortium of firms — TPG, Bain Capital and Goldman Sachs — took the company private in 2002. Burger King was taken public in 2006, though the consortium still owns about a third of the company.

Shares of Burger King rose 15 percent on Monday after a report in The Wall Street Journal that London-based 3i Group was preparing to buy Burger King. However, 3i Group is not in talks with Burger King and has no interest in the fast-food chain, Katherine van der Kroft, a spokeswoman for 3i based in London, told DealBook.

“The firm is not in discussions with Burger King has no interest in the company,” she said. “We’re not talking to Burger King and we’re not sure where this has come from.”

3i is a mid-market private equity firm, meaning the deals it does are much smaller than the $2 billion or $3 billion required to buy Burger King.

“This would be a much larger deal than something we’d typically do,” Ms. van der Kroft said. She also added that 3i focuses on buying minority stakes in our United States business, so it wouldn’t be doing a leveraged buyout there.

– Andrew Ross Sorkin & Peter Lattman

NEW YORK (Dow Jones) – H.J. Heinz Co. (HNZ) projected first-quarter earnings above analysts’ expectations as the food-processing company benefited from continued growth in emerging markets.

The company’s estimate for first-quarter revenue growth was a notch below Wall Street’s forecast. Speaking at the company’s annual meeting, Chief Executive William Johnson said the slow consumer and economic environment remain a challenge.

The company is scheduled to release first-quarter results Wednesday. In an update to an earlier statement detailing the timing of the earnings, Heinz said Chief Financial Officer Art Winkleblack will not be on the call as previously announced. A spokesman said Winkleblack is dealing with a family emergency.

Heinz said Tuesday earnings for the quarter ended July 28 were 75 cents a share, with total revenue rising 1.6% and growth on an organic basis–which typically excludes acquisitions, divestitures and currency changes–in excess of 3%. Analysts polled by Thomson Reuters recently expected earnings of 73 cents and total revenue growth of 2.4% to $2.53 billion.

Like other food and consumer companies, Heinz has seen earnings grow in emerging markets although continued pressures in developed markets has put pressure on sales. Heinz’s push into China includes a June agreement to acquire Chinese soy-sauce maker Foodstar for $165 million. Heinz said Thursday that it remains interested in such small “bolt on” deals. Johnson noted that since nearly two-thirds of the company’s sales come from abroad it is likely to see currency fluctuation impacts for the fiscal year.

Heinz shares were recently up 0.7% to 46.40.

-By Tess Stynes and Anjali Cordeiro, Dow Jones Newswires; 212-416-2481; Tess.Stynes@dowjones.com

LOUISVILLE, Ky. (AP) — The owner of the Taco Bell, Pizza Hut and KFC fast-food restaurant brands said Tuesday that its second-quarter profit fell slightly because a one-time gain a year ago outpaced its revenue growth.

Yum Brands Inc. gave an upbeat forecast, citing ballooning growth in China, and raised its full-year outlook. But its shares fell in aftermarket trading when investors saw revenue was flat at Yum restaurants in the U.S. that have been open at least a year.

There were “some whisper expectations” of higher sales at established restaurants in China, said Larry Miller, a restaurant analyst with RBC Capital Markets. The market’s tepid reaction also might reflect disappointment in the company upgrading its full-year earnings projection by just 4 cents per share, from $2.39 to $2.43, he said.

Still, Miller said it was basically an “all-around good quarter” for the company. Analysts were expecting $2.42 per share for the current fiscal year.

Louisville-based Yum said it earned $286 million, or 59 cents per share, for the three months that ended June 12. That compares with $303 million, or 63 cents per share, a year earlier — when it recorded a $68 million one-time gain for increasing and consolidating its stake in its KFC business in Shanghai in China.

Excluding such one-time items from both quarters, the company earned 58 cents per share for this year’s second quarter, compared with 50 cents per share a year earlier.

Analysts expected the company to earn 54 cents per share in the most recent quarter on revenue of $2.54 billion.

Yum said its revenue rose 4 percent to $2.57 billion.

The company, whose brands also include Long John Silver’s and A&W All-American Food, operates more than 37,000 restaurants around the world.

The company’s operating profit soared 33 percent in China, where it opened 59 new restaurants during the quarter, for a total of 155 so far this year. Sales there grew 15 percent while sales at restaurants open at least a year — a key barometer for restaurant performance — rose 4 percent.

“The China business is firing on all cylinders,” said Yum spokesman Jonathan Blum.

Across Yum’s U.S. business, its operating profit rose 10 percent as commodity costs fell and revenue rose at Pizza Hut and Taco Bell, offset by a decline at KFC.

Pizza Hut — where revenue at restaurants open at least a year rose 8 percent — benefited from a $10 pizza promotion.

“It’s certainly not as profitable as selling high-priced pizzas, but they’re selling a lot of them,” Miller said.

Taco Bell posted a 1 percent boost in the key revenue figure, while it fell 7 percent at KFC.

Net income in the international division, which doesn’t include China, rose 7 percent, adjusted for currency fluctuations. And revenue at restaurants open at least a year edged up 1 percent.

Yum Chairman and CEO David C. Novak predicted that Yum will open about 1,400 international units this year, consistent with the pace of restaurant openings in the past five years.

Yum expects to open some 475 restaurants in China this year, plus about 1,000 more in its separate international division, Blum said.

The shares fell $1.31, or 3.1 percent, to $40.40 in after-hours trading.

AP Business Writer Sarah Skidmore contributed reporting from Portland, Ore.

General Mills Inc.’s (GIS) fiscal fourth-quarter profit slid 41% as the company reported higher costs and lower sales, while year-earlier results benefited from an extra week and mark-to-market gains.

The packaged-food giant sees earnings for the new year of $2.46 to $2.48 a share on net sales growth in the low single-digits. Analysts polled by Thomson Reuters projected a profit of $2.50 on a 3% increase in sales, to $15.23 billion.

Shares slid 3% to $35.80 in after-hours trading.

The maker of Cheerios, Pillsbury and other brands has benefited from lower commodity prices and higher selling prices in recent quarters. The company has also seen strong sales of household staples such as Hamburger Helper, Multigrain Cheerios and Pillsbury cookie dough as consumers opt to eat more at home rather than going out.

In a sign of strength, the company on Monday boosted its quarterly dividend by 17%, its third increase this fiscal year, while also authorizing a stock repurchase plan of up 15% of the company’s outstanding shares. Many companies in recent months have looked to return value to shareholders, making moves such as implementing or boosting dividends and buying back stock, as the need to hoard cash has waned amid an improving economy.

For the quarter ended May 30, General Mills posted a profit of $211.9 million, or 31 cents a share, down from $358.8 million, or 53 cents a share, a year earlier. Excluding items such mark-to-market adjustments in both quarters and a charged related to the government’s health-care reform in the latest quarter, earnings fell to 41 cents from 43 cents.

Sales slid 2.1% to $3.57 billion as volume was flat.

Wall Street projected a profit of 41 cents on revenue of $3.55 billion.

Gross margin narrowed to 36.2% from 42.4% as costs grew 8.5%.

The company’s U.S. retail business–its biggest by revenue–saw sales fall 1.7% while earnings declined 9.3%. At the bakeries and food-service segments, which has seen recent sales woes, revenue slid 12%, while profit decreased 3.6%.

-By John Kell, Dow Jones Newswires; 212-416-2480; john.kell@dowjones.com

SAN FRANCISCO (MarketWatch) – Ralcorp Holdings made a bigger push into private label foods Monday, saying it plans to acquire American Italian Pasta Co. for $1.2 billion in stock. It also announced separate deals for two small cracker makers.

In addition, Ralcorp (RAH 57.87, -4.30, -6.92%) issued a weak profit forecast for the current quarter, blaming the shortfall on a price war among cereal makers.

By midday, Ralcorp shares fell 7% to $57.75.

Ralcorp intends to pay $53 a share to acquire American Italian (AIPC 52.67, +10.94, +26.22%) . The deal is a 27% premium over American Italian’s Friday closing price. Shares of American Italian surged to $52.57 in trading midday Monday.

Ralcorp plans to commence a tender offer to acquire all of American Italian’s outstanding common shares. The deal, also subject to regulatory approvals, is expected to close before Sept. 30.

Kansas City-based American Italian bills itself as the largest producer of dry pasta in North America. It operates four plants and has 650 employees. Besides making pasta for private label sellers, its regional brands include Golden Grain and Mueller’s.

American Italian posted a profit of $88 million in 2009 compared to $19 million in 2008. Sales climbed to $628 million last year, a gain of 10% from the prior year.

It will operate as an independent division of Ralcorp when the deal closes.

Ralcorp said the other deals were for North American Baking Ltd., formerly PL Foods Ltd., and J.T. Bakeries. Combined, both companies have annual sales of $95 million. Ralcorp said the deals were completed on May 31.

Ralcorp said the trio of deals would boost fiscal 2010 earnings by 50 cents a share.

Cereal price wars

For the quarter ending in June, St. Louis-based Ralcorp said it expects to earn a $1 a share, 31 cents lower than the same period last year.

Analysts had expected Ralcorp to earn $1.29 a share, according to FactSet.

Ralcorp said price promotions for cereal are more frequent and the price gap between private label cereals and name brands has narrowed so much, there is little price difference. The company makes Raisin Bran and Honey Bunches of Oats under the Post cereal brand and manufactures cereals sold under grocery store brands.

Ralcorp acquired Post from Kraft Foods in August 2008. It ran into problems integrating the Post business and had been using promotions to help stoke demand.

While business at Post has improved since last summer, Ralcorp said competition has become stiff. “The cost to regain share and the impact of additional promotional activity has exceeded our initial estimates,” Co-Chief Executive David Skarie said.

Cereal makers Kellogg (K 54.06, -0.41, -0.75%) and General Mills (GIS 37.94, -0.60, -1.55%) fell 1% in midday trading Monday.

Matt Andrejczak is a reporter for MarketWatch in San Francisco.

LOS ANGELES, May 12 (Reuters) – Whole Foods Market Inc (WFMI.O) reported better-than-expected quarterly earnings and raised its full-year profit and sales forecasts due to improving trends, sending its shares up 5 percent.

The Austin, Texas-based seller of organic and natural foods said on Wednesday it earned $67.5 million, or 39 cents per share, for the fiscal second quarter ended April 11. That compared with net income of $35.3 million, or 19 cents per share, in the year-earlier quarter.

Analysts, on average, had expected a profit of 33 cents a share in the latest quarter, according to Thomson Reuters I/B/E/S.

Sales grew to $2.11 billion from $1.86 billion.

The company’s new 2010 forecast calls for identical-store sales growth of 5.5 percent to 6.5 percent and earnings of $1.33 to $1.37 per share. It had previously called for identical-store sales growth of 2.9 percent to 4.9 percent and per-share earnings of $1.20 to $1.25

It also boosted its same-stores sales growth target to 6 percent to 7 percent from 3.5 percent to 5.5 percent.

Same-store sales measure sales at stores open at least a year, while identical-store sales exclude stores that have moved or been renovated.

Shares of Whole Foods, which closed at $40.25 on the Nasdaq, rose to $42.25 in after-hours trade. (Reporting by Lisa Baertlein; Editing by Tim Dobbyn)

CHICAGO (AP) — Starbucks Corp.’s second-quarter profit rose more than eight-fold, thanks to its efforts to cut expenses and boost sales, the coffee company said Wednesday afternoon.

For the three months that ended March 28, the Seattle company earned $217.3 million, or 28 cents per share. That figure includes a one-time charge that amounted to a penny per share.

During the same period last year, Starbucks earned just $25 million, or 3 cents per share, when it was weighed down by hefty charges.

Revenue rose 9 percent to $2.53 billion, up from $2.33 billion.

Both figures were ahead of Wall Street forecasts.

Analysts surveyed by Thomson Reuters, who typically exclude one-time charges from their estimates, expected Starbucks to earn 25 cents per share on revenue of $2.41 billion.

Starbucks said a key performance measure — sales in stores open at least a year — climbed 7 percent in the U.S. That figure, considered key because it isn’t skewed by results from stores that open or close during the year, slid 3 percent during the comparable quarter last year when Starbucks was in the throes of cutting costs and closing stores to shore up its business.

“Starbucks’ second-quarter results demonstrate the impact of innovation and the success of our efforts to dramatically transform our business over the last two years,” CEO Howard Schultz said in a statement. Schultz is also chairman and president of the chain.

It was the fourth consecutive quarter that Starbucks’ profit rose and the second that its revenue did.

Starbucks shares climbed 10 cents to $25.49 in after-hours trading Wednesday. Shares closed at $25.39 in regular activity.