Starbucks profits down 40%, closing 100 stores

Discussion in 'Financial Cents' started by melbo, Jan 31, 2008.

  1. melbo

    melbo Hunter Gatherer Administrator Founding Member

    Maybe J6P can understand this economic indicator?
    40% of Starbucks' customer base didn't buy coffee last year
    International expansion to grow by 900 stores.
    This is what a falling dollar means to the US

    Starbucks cautious on 2008, closing 100 stores

    By Lisa Baertlein,

    2008-01-30 19:08:20

    LOS ANGELES (Reuters) - Starbucks Corp (SBUX.O) said on Wednesday it is closing 100 underperforming U.S. stores and slowing domestic openings in the face of a likely consumer recession and 'cannibalization' from overbuilding.

    Its shares fell nearly 2 percent in after-hours trading.

    The coffee chain -- which is turning its focus to increasing its overseas business that helped the company post a higher quarterly profit -- has been battered in recent months by slower consumer spending, higher milk and labor costs and concerns it may have saturated the U.S. market.

    "There's a macroeconomic headwind that we're all facing that strongly suggests that the (U.S.) consumer is in a recession," Starbucks recently-returned Chief Executive Howard Schultz said in a telephone interview.

    Starbucks cut its forecast for 2008 U.S. store openings to 1,175 from 1,600. Meanwhile, it plans to increase international store openings by 75 outlets to 975.

    "We believe having less openings at this point in time, in addition to the economic environment, gives us an opportunity to have less cannibalization and better use of capital," Starbucks Chief Financial Officer Peter Bocian, said on a conference call.

    Executives said they will discontinue guidance for fiscal 2009 and beyond and cease to issue same-store sales results, saying those will not be effective indicators of the business during the turn-around period.....

    Shares in Starbucks have fallen more than 40 percent over the last 12 months, wiping out roughly $13 billion in market value. In after-hours trade, Starbucks shares fell to $18.90 after closing Nasdaq trade at $19.22.

  2. Blackjack

    Blackjack Monkey+++

    Maybe people are finally starting to realize that it's INSANE to pay that much for a cup of coffee?
  3. CRC

    CRC Survivor of Tidal Waves | RIP 7-24-2015 Moderator Emeritus Founding Member

    Bad coffee at that...

    Seattle's Best is much better..if you're going to spend that kind of money..

    I prefer Raven's Brew.....

    but I drink Maxwell House...;)

    They have a dark , French Roast...and use arabica beans now. :)
  4. hartage

    hartage Monkey+++

    You ever try yuban ? (arabica, 100% columbian) I tried that after my usual maxwell house med roast. To me at least was quite a difference (better). You might want to try the small $3.75 wallywart yuban can and see what you think.
  5. Clyde

    Clyde Jet Set Tourer Administrator Founding Member

    Owner of Seattle's Best Coffee = Starbucks (so, your drinking Starbucks, anyway)

    <table border="0" cellpadding="0" cellspacing="0" width="452"><tbody><tr><td>Starbucks Corporation Completes Acquisition of Seattle Coffee Company</td> </tr> <tr> <td colspan="2">[​IMG] </td> </tr> <tr> <td>[​IMG]</td> <td>July 14, 2003 (SEATTLE, WA) – Starbucks Corporation (Nasdaq: SBUX) today announced that it has completed the acquisition of Seattle Coffee Company from AFC Enterprises, Inc. (Nasdaq: AFCE) announced on April 16, 2003. Seattle Coffee Company includes the Seattle's Best Coffee® (SBC) and Torrefazione Italia® Coffee (TI) brands.

    About Starbucks
    Starbucks Corporation is the leading retailer, roaster and brand of specialty coffee in the world, with more than 6,500 retail locations in North America, Latin America, Europe, the Middle East and the Pacific Rim. The Company is committed to offering the highest quality coffee and the Starbucks Experience while conducting its business in ways that produce social, environmental and economic benefits for communities in which it does business. In addition to its retail operations, the Company produces and sells bottled Frappuccino® coffee drinks, Starbucks DoubleShot™ coffee drink, and a line of superpremium ice creams through its joint venture partnerships. The Company's other brands enhance the Starbucks Experience through best-of-class products: Tazo Tea Company offers a line of innovative premium teas, and Hear Music produces and distributes a line of exceptional compact discs.</td></tr></tbody></table>
  6. CRC

    CRC Survivor of Tidal Waves | RIP 7-24-2015 Moderator Emeritus Founding Member

    Wonder why it's cheaper and tastes better?

    Do they own Raven's Brew as well? Because I love them!
  7. CRC

    CRC Survivor of Tidal Waves | RIP 7-24-2015 Moderator Emeritus Founding Member

    Not in years....But I have to go to Wally World today, I'll pick some up!

    Thanks hartage...
  8. melbo

    melbo Hunter Gatherer Administrator Founding Member

    We can debate the finer points of Starbucks flavor and value all day long but,
    You ever stand in line at a SB and hear this annoying order in front of you?

    "I'll have a Grande Half Caf Latte, Extra Hot, Casi Cielo, Skinny with 11 pumps of of vanilla, 15 pumps of caramel in a Venti cup." "Oh, with whipped cream" Takes a sip after adding more milk and sugar... "Could you please ad one and a half pumps more of caramel"

    Those types of coffee drinkers are not cutting back unless the HELOC has run dry and the H2 payment is 36 days late. I once heard a woman brag that her and her husband spent over $600 a month at Starbucks.

    I think it is a valid economic indicator and all the reason more that this country is not truly ready or able to understand a message like Dr Paul's.
  9. CRC

    CRC Survivor of Tidal Waves | RIP 7-24-2015 Moderator Emeritus Founding Member

    I can't STAND those people.....

    They want "decaf" and "Skim Milk"...hell, why not drink water???

    I get my coffee...and that's what it is. Coffee. Black.

    And I like it.

    Last time I was in a Starbucks, I met someone there..and it was $5.00 for 2 regular coffees!
    That's almost half a CD which I will enjoy waayyy more.

    I do buy a cup of coffee sometimes when I'm at Books A Million...It's $1.50 and free refills....I like to sit , read, and drink coffee...
  10. Tracy

    Tracy Insatiably Curious Moderator Founding Member

    Ya' think?:rolleyes:
    Doesn't look like they're closing anything around here, even with competition at every corner.

    CRC-Dutch Bros. and Coffee People beat Starbucks for both price and flavor (IMH,frugal,O).

    Melbo-I'm not one of those people at Starbucks (the 3 times I've been there). I'm the one standing there looking like I'm waaaay out of my league. "Which one tastes like coffee?" :lol:
  11. Tango3

    Tango3 Aimless wanderer

    ([troll]) agree we have one in the local Barnes and Noble,I hit b&n almost once a week, I ordered once from the overly effeminate kid (with the hair over one eye) behind the starbucks counter:
    "plain coffee please small & black..."
    "um thsir we have vente; guante ;and ginormous..
    "excuse me ?.
    do you want nutmeg in that?
    Why on earth would I want nutmeg in my coffee??? black please none of that "latte"stuff either there, nancy...
    screw that snobbish euro trash for $4.00.[coffee2]
    we have a second one 2miles further down the strip next to a kinkos. Never been in it don't plan to either.([troll][coffee2])
    Playing way too much on a faux high class image..."the starbucks experience"? flustered soccer moms ordering overly expensive snob coffee( "snoffee?") with made up foreign sounding names? no wonder this country's in trouble...

    more Rant:
    quote melbo
    "Those types of coffee drinkers are not cutting back unless the HELOC has run dry and the H2 payment is 36 days late. I once heard a woman brag that her and her husband spent over $600 a month at Starbucks."

    I take a half a handful of beans in my little electric grinder toss the grind in the 1 person percolator potwith the campfire blackened bottom (the one I take to the woods), percolate 10minutes 2 decent cups for maybe .04. I was using too much coffee with the drip.
  12. Tracy

    Tracy Insatiably Curious Moderator Founding Member

    :lol: @ Snoffee! Good one!
  13. hartage

    hartage Monkey+++

    Lol, the "snoffee" term is priceless. [lolol] You just might have just coined the next big anti-starbucks rally cry.
  14. slots

    slots Monkey+++

    Can't say I'll shed any tears. I don't go to starbucks on principle. I know how much the coffee costs for a small retailer, let alone for a company like starbucks...

    Put it this way, the biscuit/mint we served with the coffee costs more than the coffee itself. They're selling hyped up crap.
  15. Blackjack

    Blackjack Monkey+++

    And people wonder why us poor folk get so annoyed at the rich ones.
  16. Quigley_Sharps

    Quigley_Sharps The Badministrator Administrator Founding Member

    So long Star Bucks, good riddance [beer]
    Maybe you can take WalMart with you.
  17. ozarkgoatman

    ozarkgoatman Resident goat herder

    We can only HOPE [winkthumb]

  18. monkeyman

    monkeyman Monkey+++ Moderator Emeritus Founding Member

    I got over the overpriced coffee shop scene before I was legale for the bars. I drink my cream, sugar and ocasionaly some flavoring with some coffee but still would generaly rather have truck stop road tar than most of the stuff from SB, especialy when I get a few pots for the price of a dixie cup of the other stuff.
  19. poacher

    poacher Monkey+++ Founding Member

    Blackjack. I'm willing to bet that the lady that was boasting about her spouse spending that much on coffee is the same lady that got into a brand new Tahoe or somthing similar and drove to her exclusive gated housing area. All of which they have some type of loan on. In other words they aren't rich they just want people to think that. Those that they are trying to convince are the same people whom they run around with and are in the exact same boat.
    Not only that but I'd be willing to bet that they are in a worse situation than any of us here. The reason is because quite frankly we that post here understand the value or lack thereof of a dollar. We also understand that when you have a note on somthing it's not yours, whoever has the note owns it.
    Just a different perspective.
    Take care Be safe Poacher.
  20. Seacowboys

    Seacowboys Senior Member Founding Member

    I really enjoy a cappacino. I wish there was a Starbucks here in the Bahamas.
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