5:10pm- Added warming to 500 more stores in the quarter, which took the total to about 1,700 new stores.

5:11pm- Expansion in the US continues to drive for new roasting plant. Will be a new roasting plant in South Carolina, which will be operational in 2009. Will be their fourth roasting plant in the US and 5th worldwide.

5:12pm- Music and books business is going great. The company believes it has the perfect environment with presenting customers with these forms of entertainment.

5:14pm- Very excited about opportunities in China after a recent trip to the country. Partners are doing a great job with service and level of commitment the partners had to their local communities. Strong acceptance by customers in China.

5:16pm- International second quarter results showed the company is still in a growth phase for their international business. The company saw international revenues of $327 million, which was up 26%. Internationally, they opened 147 new stores taking their total # to almost 4,000 store internationally. New store was just opened in Bucharest, Romania which is the companies first entry into central Europe.

5:18pm- Company was recognized with sever accolades during the quarter for business ethics, best companies to work for, and environment friendliness. Ranked one of the world's most valuable brands.

5:19pm- Jim's closing remarks - very pleased with the quarter and is very optimistic for what lies ahead for the company due to excellent strategy, execution, and product strength.

moving to Michael Casey

5:21pm- Consolidated top line growth was 20% which was consistent with the target. Higher costs of sales were offset by lower administration and store costs. Consolidated earnings per share were a strong 19 cents compared to 16 cents last year, for a 19% increase.

5:23pm- US operating revenues increased 19% during the quarter to $1.8 billion. US specialty revenues grew by 21%. Food service and other revenues rose by 17%.

5:25pm- October wage increase led to a slightly increase in wage increases during the quarter. Operating margin decreased to 15% of related revenues.

5:28pm- International total revenues increased 30% to 387 million in second quarter. 7% comparable sales growth with a 2% increase in average customer transaction and a 5% growth in # in transactions. Operating income was $21 million in the second quarter compared with $19 million - operating margin decreased to 5.9% from 6.1% last year same quarter.Continue to invest in people and systems to capitalize in the growing international markets in support of rapid international store growth.

5:30pm- Consumer products group: total revenues increased to $79 million due mainly to increase product sales and ready to drink business. Operating income of $38 million was unchanged from same period last year.

5:33pm- During second quarter SBUX repurchased 14.3 million shares for $465 million. For fiscal 2997 YTD the company has repurchased $594 million and plans to repurchase an additional 25 million shares of their stock moving forward.

5:35pm- very strong results, operating margin equal to last years record; expect modest improvement in operating margins the rest of the year, especially in Q$. Achieving both growth and earnings targets. Continue to target open 2,400 stores this year. In the US looking to open 1,700 stores. Expecting net revenue growth in the 20% growth. EPS target for the year expecting 89 cents.

5:38pm- John @ CIBC: Traffic in the US was flat for possibly the first time ever in the company's history... can they talk on that? Do the breakfast items show increase in traffic, or just in tickets? Company had 8% transaction growth in the quarter. Flat traffic can be attributed to the tough comparison from the previous years strong numbers.

5:40pm- Joe @ Bear Stearns: On breakfast sandwiches... in the markets where they have the breakfast is traffic up in those markets? Yes they are seeing an increase in transactions in those markets. Is G&A leveling out or continue to grow? It will continue to grow with the overall business, but you can expect to see it growing at a smaller percentage when compared to overall company revenues.

5:42pm- Jeffery @ Lehman: SBUX clearly in the growth stage, but is there an opportunity to take on a more aggressive leveraging and use of the balance sheet? Main objective is to satisfy the growth of new stores and after that they focus on support infrastructure and then after that they consider the possibility of share repurchase which they have done rather aggressively over the last couple of years. Way too early in their growth phase to consider more aggressive uses of the balance sheet.

5:45pm- Steven @ Goldman - Can we expect incentive compensation to rise? No, there will be normal compensation accrual through the remainder of this year. What markets are really strong internationally? It is more of an overall strength. UK and Canada have both been very strong and are the drivers due to size of the markets. The launch of the Starbucks card in the UK was very well received and will probably lead to using this in other markets. Getting ready to open up their 700th store in Japan. There are no markets in the world where the company has even come close to achieving market saturation. China now has 500 stores and they are only in the embryonic stages in that country.

5:48pm- Matt @ Thomas Weissel : With respect to domestic margins. If we look at the overall basket, is the decline over the last 2 quarters a result of selling more foods that are lower margin, or is there a productivity thing of new stores with higher rents and not so productive? Biggest reason would be cost pressures from wages and extra pressures such as fuel and distribution charges. What was the wage rate increase? Was between 4 and 5% during the quarter

5:50pm- Larry @ RBC: on dairy prices... any chances of hedging on dairy if prices continue to remain high? Probably not, they did a small amount of hedging last year but never saw much advantage from that

5:53pm- Someone @ Citigroup (sorry I missed your name): What is the greatest challenge facing the company in their ability to achieve the company's growth rate going forward? Company wants to make sure that we should not base our growth impressions based just on this quarter. Looking over the next 6 to 8 months specifically they are very well prepared for the summer and into fall operationally. Prepared for a good summer and looking to the Fall and Christmas, those plans have been in place for a while which they will not share with us at this time, but feel like they are in a great place for the remainder of this year.

5:56pm- David Palmer @ UBS: Can they characterize if growth numbers will be more weighted Internationally in the next couple of years? Eventually it will get weighted to the international, but not any time soon. Expect a gradual shift as the company will continue to open stores very rapidly in the United States.

5:55pm- John @ JP Morgan: Store pricing in the US... what do they see as pricing in the future? No plans to do any price lifts in the future and do not feel that raising prices would be ideal at this time. next question: On China.. how is the China market going and how rapidly they can grow it in the future and impact in the next 3 to 5 years? Company has said over the last year or so that as they look around the world that China ultimately could be the second largest market in the world for Starbucks. The level of acceptance and the relevance of the Starbucks experience in China is good and they have a core of about 200 million customers as their core. Are inserting themselves in the Chinese culture very well. Believe that this is going to be a huge payoff for the company at some point and are positioned as well as if not better than most Western Brands that are entering the Chinese market. Are investing heavily in the market and will not make the same mistake they made early in their history in America by under-estimating the total size of the market. Have a goal of about 100 new stores a year going up in China. They will probably under promise and over delivery on those numbers. On a recent trip to China.... CEO Jim Donald spoke with some leaders and stated that they could be doubling stores in some of the areas within the next 18 months and the Chinese leaders replied that this wouldn't be fast enough... Off all the new international stores about 20% will be done in China, and in 2008 they actually just now estimated that there would be about 200 stores in that year.

that is all... hope you enjoyed the coverage. As of the end of today's conference call shares of Starbucks are trading up 1.0% in after hours trading.. so about at the same place where they were before the call got under way an hour ago.