By Canadian Vending
By Canadian Vending
May 27, 2008, Seattle, WA – Starbucks Corp. said its second-quarter
profit fell 28 per cent as consumers responded to rising food and gas
prices by making fewer latte runs.
May 27, 2008, Seattle, WA – Starbucks Corp. said its second-quarter profit fell 28 per cent as consumers responded to rising food and gas prices by making fewer latte runs.
The company also gave investors a first look at its expected financial performance through 2011, which calls for substantial profit growth, as well as a peek at some new drinks it hopes will help revive consumers' interest.
For the quarter ended March 30, Starbucks' net income sank to US$108.7 million, or 15 cents per share, from $150.8 million, or 19 cents a share in the same period last year.
Revenue rose 12 per cent to $2.53 billion from $2.26 billion in the year-ago quarter, the company said.
Starbucks warned last week that results would fall short of Wall Street's expectations. Analysts, on average, had forecast a profit of 21 cents per share on $2.63 billion in sales, according to a Thomson Financial survey.
U.S. same-store sales, a key measure of retail health, fell in the mid-single digits as traffic declined. Starbucks' past guidance called for three to five per cent growth in same-store sales, or sales at locations open at least a year.
Starbucks added 266 U.S. stores in the quarter, and 470 outside the country, bringing the worldwide total to 16,226.
In a lengthy conference call after the report was released, Schultz and chief financial officer Pete Bocian focused more on the coming months and years than on quarterly results.
Schultz said the company will launch three new types of drinks this summer: a health-conscious smoothie-style line, an icy Italian coffee-based drink and an energy drink that adds extra kick to the existing Starbucks DoubleShot, which is sold in cans, and will also be prepared fresh in stores.
The CEO said new health-conscious foods are planned for fall, and that the company will continue to experiment with new menu items through the holidays and into 2009.
Looking ahead at financial and operational growth, Starbucks again pared back the number of store openings planned for this year by 30 and said it would limit new U.S. stores to 250 per year in 2009 through 2011. International openings will increase at a faster clip, with a projected 1,300 in 2011, as the company increasingly relies on overseas operations to fuel profit and revenue growth. Starbucks expects to have 21,500 stores worldwide by the end of fiscal 2011.
Source: The Associated Press