Skip to main content

Starbucks revenues fall more than 7%


Seattle Starbucks Corp. reported Wednesday that net revenues dropped 7.6% to $2.3 billion for the fiscal second quarter, ended March 29, compared with $2.5 billion for the same period a year ago.

The coffee giant’s net earnings for the quarter were $25.0 million, compared with $108.7 million for the same time frame in 2008. Same-store sales also slipped 8%, a drop that the company blames on a 5% decline in the number of customer transactions, and a 3% decrease in the average value per transaction.

On a positive note, Starbucks is “making good progress,” the company said, to meet its fiscal 2009 target to reduce costs by $500 million. Store closures are among these cost-saving strategies.

During the second quarter, the chain achieved $120 million in cost savings, exceeding the targeted $100 million for the second quarter. This resulted in year-to-date cost savings of approximately $195 million. Starbucks expects to deliver cost savings of approximately $150 million in the third quarter, and about $175 million in fourth quarter fiscal 2009.

The chain is also adhering to its plan to close approximately 800 company-operated stores in the United States, 61 locations in Australia, and shutter another 100 company-operated stores internationally. To date, 507 U.S. stores and 64 international locations have been closed. The remaining store closures are expected to occur by the end of fiscal 2009.

This ad will auto-close in 10 seconds