Price of your caffeine fix at Starbucks could be headed higher

Is another price increase in the works at Starbucks?

The company, which raised the price of coffee drinks by a nickel in October, declined Thursday to comment on speculation from an analyst who said there was a "strong likelihood" Starbucks would raise prices to improve operating margins.

"We don't comment on analysts' notes or rumors, but we are always monitoring the cost environment we are operating in," Brandon Borrman, a spokesman for Starbucks, said.

CIBC World Markets analyst John Glass made his remarks to investors as margins for Starbucks have dropped because of rising prices for commodities such as milk.

Michael Casey, Starbucks' chief financial officer, last month warned that the company would have difficulty meeting the top end of its 2007 profit target because of rising dairy costs and soft growth.

Starbucks shares have dropped nearly 22 percent for the year, while the S&P 500 Index has increased 9.5 percent this year.