Starbucks returns to profitability in third quarter

by FoodBusinessNews.net Staff
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SEATTLE — With the help of cost-cutting initiatives, Starbucks Corp. posted third-quarter net earnings of $151.5 million, equal to 20c per share on the common stock. The results compared with a loss of $6.7 million during the same quarter of the previous year.

Net revenue for the quarter ended June 28 was $2,403.9 million, down 7% from $2,574 million during the same quarter of the previous year.

"The transformation of Starbucks business — including the success of our consumer-facing initiatives and the permanent changes to our cost structure — is delivering improvements in comparable store sales trends and is beginning to be reflected in our financial performance," said Howard Schultz, chairman, president and chief executive officer. "The entire Starbucks organization is committed to continually improving our customer experience as the roadmap to renewed growth and increasing profitability. At the same time, we will continue to innovate and differentiate."

The company said it is making good progress on its fiscal 2009 target to reduce cost structure by $500 million. In the third quarter alone the company achieved about $175 million in cost savings for a year-to-date total cost savings of about $370 million.

For the nine months ended June 28, the company had net earnings of $240.8 million, or 32c per share, down 22% from $310.1 million, or 42c per share, during the same period of the previous year. Total revenue for the period was $7,352.4 million, down 7% from $7,867.6 million during the same period of the previous year.

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