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Starbucks Posts First Loss

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http://www.guardian.co.uk/business/2008/ju...ucks.fooddrinks

Coffee giant Starbucks has reported its first ever quarterly loss but fighting talk about its future prospects impressed investors who drove up its shares more than 4% in after-hours trading in the US late last night.

In the UK, the company admitted that Britons are not frequenting its stores as often as they did earlier this year, but said it will press ahead with its recently announced deal with food service company SSP to open 150 Starbucks outlets in airports and train stations in the UK and elsewhere in western Europe.

Comparable sales fell in the UK from the second quarter to its latest quarter and chief executive Howard Schultz said the company was very nervous about prospects for the UK economy. It will be cautious about opening too many stores in its next fiscal year, starting in October, as it doesn't want those stores to suffer the same fate as those in the US, where 600 are being closed, and Australia, where the company is reducing two-thirds of its footprint to only 23 stores.

"The UK is difficult to predict," said Schultz on a conference call last night. "Signs bode downward in consumer spending," he added, though he was pleased with the reception to Starbucks' Vivanno smoothie drink, which is being tested-market in the UK in a bid to drive afternoon traffic.

Generally though, the international market was the bright spot of Starbucks' third quarter with revenues up 24%. The weak US dollar helped boost those figures.

Total worldwide sales in the three months through June 29 climbed 9.1% to $2.6bn. However comparable store sales across the company declined by a mid-single-digit percentage, the fourth straight quarterly decline.

The company announced a loss on the quarter of $6.7m or 1 cent per share after spending $168m in costs associated with shutting its US stores. In 2007 the company made a $158m profit, or 21 cents per share. Both third-quarter top and bottom line results were shy of Wall Street expectations.

Fighting talk from Schultz about the future direction of the company and the fact it kept its guidance for 2009 impressed investors. For fiscal 2009 Starbucks held firm to its previous profit forecast of between 90 cents to $1 per share. Consequently its shares rose 4.4% to $15.32 in late trading. Earlier, they had dipped 32 cents to $14.67. The shares have been pummelled this year dropping 28%.

A temporary blip or is over priced coffee finished?

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have to agree,this has been coming for a while.Was in leicester a few weeks back and the amount of sandwich/ coffee shops has to be seen to be believed.most were empty,subway was busy.

I used to live in Beckenham, which is a nice little London suburb with a few little local café's. However, recently they've put in a massive costa coffee and a Nero. Somehow they're often very busy while the local café's (which do a very reasonable priced coffee and friendly staff) seem to be dying. I don't get why people want to spend £2 on a bloody cup of coffee when they have the choice not to.

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Over priced sh*t coloured water finished???

I sincerely hope so! The thought of not being able to get from A to B without a fu#king Cafe Latte in your hand is an American fad I can't wait to see the back of. :angry: :lol:

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It's not even as if they make decent coffee - it's shit!

Just another one of those "lifestyle" choices that people make to give themselves some sort of self-worth.

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It's not even as if they make decent coffee - it's shit!

Just another one of those "lifestyle" choices that people make to give themselves some sort of self-worth.

Gimme the free Nescafé in the office kitchen any day

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I hate all these cafe's not because of the coffee which I think is quite nice, but because they are often so dirty and scruffy.

The ones in central london are nearly always really manky inside.

But there are always plenty of people sitting amongst all the uncollected cups on stained sofa's perhaps convincing themselves that it's okay because it's cosmopolitan shabby chic as opposed to just inner city shabby shit.

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i dont use them, never have never will.

Yeah.

I did briefly step over their threshold once, only to be assailed by the overpowering, unpleasant stench of coffee (and I love the smell of coffee).

OK, you'd expect the place to smell of coffee but blehhhh, it was 'orible.

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Starbucks is a has-been, even the name is naff now. It should get a multi-million dollar brand makeover and rename itself something like 'S', with the slogan 'S for Coffee' !!! :lol::lol:

Edited by blankster

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have to agree,this has been coming for a while.Was in leicester a few weeks back and the amount of sandwich/ coffee shops has to be seen to be believed.most were empty,subway was busy.

Remember part of Frank Skinner's routine ? He walks through China Town and sees a sign saying "new restaurant opening soon" and thinks "I wonder were the inspiration came for that?" 'kin coffee shops, glad to see the back of them, nothing's gonna replace the empty units though.

Edited by Converted Lurker

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there are always plenty of people sitting amongst all the uncollected cups on stained sofa's perhaps convincing themselves that it's okay because it's cosmopolitan shabby chic as opposed to just inner city shabby shit.

Classic!

Edited by quine

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Starbucks has to be one of the most exposed to a slowdown, the 3£ coffee is one of the first things you will forgo in an economy drive.

I read somewhere most of the Starbucks shops in Australia have already closed down.

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Starbucks has to be one of the most exposed to a slowdown, the 3£ coffee is one of the first things you will forgo in an economy drive.

I read somewhere most of the Starbucks shops in Australia have already closed down.

Yes the 'latte run' in my office appears to have died a sudden death. Not that I was ever part of it - black coffee filter coffee / glass of water for me.

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Starbucks has to be one of the most exposed to a slowdown, the 3£ coffee is one of the first things you will forgo in an economy drive.

Not at all, I've read on heard many times that people won't give up their over priced coffee beacuse they NEED their little pick-me-ups even in the darkest of times...

:lol:

No more pretentious coffees, nail bars, estate agent minis, champagne in the pub, leased bmws, this season's ipod, to name but a few.

happy days

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If something costs 5 cents to make and you sell it for $3.50 how exactly do you make a loss? Creative accounting?

Maybe the commodities boom doubles your costs to 10 cents, $3.40 a cup should still be enough to pay minimum wage to a couple of teenagers.

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No more pretentious coffees, nail bars, estate agent minis, champagne in the pub, leased bmws, this season's ipod, to name but a few.

Maybe it's just me being a miserable git but I quite like the idea of a more austere, financially responsible Britain.

Hell yeah. They've just announced they are to close 61 out of their 84 Australian outlets.

Good link.

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