Starbucks Falls Despite EPS Beat; Margins Slip

Starbucks (SBUX) is falling 1.4% after hours despite beating analysts’ earnings and revenue expectations, as commodity costs pinched the company’s operating margin.

Stabrucks posted 50 cents of EPS, a penny better than expectations. Revenue of $3.44 billion beat analysts’ expectations for $3.29 billion. Operating margin slid to 16.2% from 17%. Same-store-sales rose 9% worldwide and in the U.S.

“The margin contraction was due to higher commodity costs,” the company said. “The increase in commodity costs, primarily coffee, negatively impacted Q1 FY12 operating income and operating margin by approximately $105 million and 300 basis points, respectively, compared to the same period in the prior year.”