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.