SEATTLE — Impacted by business changes, charges related to the rationalization of its store portfolio and less frequent customer visits, net earnings for Starbucks Corp. were down 28% for the second quarter ended March 30.
Net earnings for the quarter were $108.7 million, equal to 15c per share on the common stock, which compared with $150.8 million, or 19c per share, during the same quarter of the previous year. Total net revenue for the quarter was $2,526 million, up 12% from $2,255.6 million during the same quarter of 2007.
"Fiscal 2008 is a transitional year for Starbucks, and while our financial results are clearly being impacted by reduced frequency to our U.S. stores, we believe that as we continue to execute on the initiatives generated by our transformation agenda we will reinvigorate the Starbucks experience for our customers and in doing so deliver increased value to our shareholders," said Howard Schultz, chairman, president and chief executive officer. "Over the past several months, we have evaluated our business to assess the opportunities to better leverage resources and gain efficiencies in our cost structure while continuing to invest in our innovation pipeline to create consumer demand.
"We believe this balanced approach, which includes substantially reducing our planned U.S. store openings and lowering our capital spending, will allow us to set the stage for the next evolution of Starbucks and lead to significant improvement in our long-term financial performance."
The company also announced it is launching a cold beverage platform this summer. Looking forward, the company plans to open significantly fewer new stores in the United States during the 2009 to 2011 period but continue to grow international business. Starbucks also lowered its U.S. store opening targets for 2008 to about 1,020 new stores. It anticipates full-year earnings per share to be slightly lower than 87c, which was reported in fiscal 2007.
For the six months ended March 30, the company posted net earnings of $316.8 million, down 11% from $355.8 million during the same period of 2007. Total net revenue for the period was $5,293.6 million, up 15% from $4,611.3 million during the same period of the previous year.
"Despite the challenges of the current operating environment, we are focused on the parts of the business we can control such as store count, use of capital and controlling expenses while still investing for the long term," said Pete Bocian, executive vice-president and chief financial officer. "We believe our plan balances these key objectives and drives long-term shareholder value."