Starbucks income down 53% in year
November 11, 2008
by FoodBusinessNews.net Staff
SEATTLE — Negatively impacted by the announcement to close 600 company-owned stores, income for Starbucks Corp. was down 53% for the year ended Sept. 28. During the year Starbucks had net earnings of $315.5 million, equal to 43c per share on the common stock, compared with $672.6 million, or 87c per share, during the previous year.
Revenue for the year was $10,383 million, up 10% from $9,411.5 million during the previous year.
"With a re-architected cost structure at the close of fiscal 2008, we began the new fiscal year with a healthier store portfolio that will allow for operating margin expansion," said Howard Schultz, chairman, president and chief executive officer. "Despite a global economic environment that shows no immediate signs of improvement, the steps we took in fiscal year 2008 position us to deliver e.p.s. growth in fiscal year 2009."
For the fourth quarter net earnings were $5.4 million, or 1c per share, down 97% from $158.5 million, or 21c per share, during the same quarter of the previous year. Total revenue for the quarter was $2,515.4 million, up 3% from $2,440.9 million during the same quarter of the previous year.
"We appear to be more resilient than many other premium brands," Mr. Schultz said. "And while we cannot call isolated signs of improving sales a trend, we are encouraged by our ability to drive increased traffic at a relatively low cost, as we did on Election Day. As we head into the holiday season and calendar ’09, consumers are looking for value, and we’ve been pleased with the steady progress of our Starbucks Rewards program and the enthusiastic reception of the Starbucks Gold Card. I am optimistic we are well-positioned to weather this challenging economic environment."
Starbucks said its first-quarter 2009 results will not only be impacted by exit costs but also by investments in field organization, and the quarter will be the toughest comparable year-over-year.