Starbucks Corp.'s third quarter earnings were reported at slightly above Wall Street estimates, according to an article in the Atlanta Business Chronicle. For the quarter, the company reported earnings of $151.5 million, or 20 cents per share, beating projections of 19 cents per share.
The profits compare with a loss of $6.7 million reported for the same period last year.
Starbucks officials said the company experienced $175 million in cost savings in the third quarter, $25 million more than their original target. They said they plan to save another $180 million in the fourth quarter, and for the full year, will save about $550 million, more than their original target.
Since announcing plans to close about 800 stores last summer, the company has closed 676 U.S. locations, 61 units in Australia and 28 others around the world. Starbucks said it will complete its goal of shutting 800 stores by Sept. 27.
Revenues fell to $2.4 billion for the third quarter, down from $2.6 billion in 2008, which was related to decreased numbers of U.S. stores.
Starbucks CEO Howard Schultz said in the company's third-quarter earnings call that McDonald's huge ad push of its McCafe specialty coffee helped the coffee chain improve Starbucks' same-store sales, according to Advertising Age. McDonald's marketing effort helped bring attention to the coffee category overall, including Starbucks, and boosted the chain's sales rather than the adverse effect industry experts feared, he said.
