Starbucks profit falls as consumer weakens
LOS ANGELES (Reuters) - Starbucks Corp (SBUX.O) on Wednesday reported a 28 percent drop in quarterly profit and announced plans to further cut U.S. store openings, but said it sees international business margins improving.
The coffee shop chain, which is struggling to turn around a slowing U.S. business, had fiscal second-quarter net income of $108.7 million, or 15 cents per share, compared with $150.8 million, or 19 cents per share, a year earlier.
Results from the most recent quarter included restructuring-related charges of about 3 cents per share.
Prior to a company warning last week, analysts had been looking for a second-quarter profit of 21 cents per share. The new result matched lowered estimates, according to Reuters Estimates.
Starbucks last week slashed its 2008 outlook and warned its quarterly earnings would miss Wall Street targets as it faced the weakest economic environment in its history.
Total revenue rose 12 percent to $2.53 billion. The company said the lower-than-expected revenue was due to a mid-single-digit decline in U.S. same-store sales, which delivered 77 percent of total revenue and experienced slower traffic during the quarter.
"Our financial results are clearly being impacted by reduced frequency to our U.S. stores," Chief Executive Howard Schultz said in a statement.
Starbucks said it planned to reduce its fiscal 2008 U.S. store openings to 1,020 from its previously lowered target of 1,175.
Starbucks shares rose 1 percent to $16.40 from their Nasdaq close of $16.23.
(Reporting by Lisa Baertlein; Editing by Braden Reddall)
