Starbucks reports Q3 net loss
July 30, 2008
SEATTLE — Starbucks Corp. has reported financial results for its third quarter ended June 29, 2008, revised its expectations for fiscal year '08 and announced additional financial targets for fiscal year 2009.
Consolidated net revenues increased 9 percent to $2.6 billion for the third quarter of 2008, compared to $2.4 billion for the third quarter of 2007.The increase was heavily influenced by the U.S. business, which contributed 76 percent of total net revenue, according to the company's earnings release.
For the quarter, U.S. total net revenues increased by $107.5 million, or 6 percent, to $1.9 billion.
International total net revenues expanded 24 percent to $535.6 million for the 13 weeks ended June 29, 2008, as the company continued to expand its store presence in 44 markets outside the U.S.
The company reported a net loss of $6.7 million for the quarter compared to net income of $158.3 million for the same period last year. The company estimates that costs associated with its transformation agenda impacted third quarter results.
For the first nine months of fiscal 2008, consolidated net revenues increased 13 percent to $7.9 billion, compared to $7 billion for the same period a year ago.
Recent company actions
Starbucks announced July 1, 2008, the decision to close approximately 600 company-operated stores in the U.S. as a result of the company's evaluation of the U.S. company-operated store portfolio.
On July 29, 2008, Starbucks announced the reduction of approximately 1,000 open and filled positions within its leadership structure and its non-store organization. The company additionallyannounced it will close 61 stores in Australia by Aug. 3, 2008, while 23 stores will remain open in the market.
2009 financial targets
The company has lowered its fiscal 2009 store-opening target in the U.S. to approximately a negative 60 net new stores, which includes a nearly 225 company-operated store decline and approximately 165 licensed net new stores. Internationally, Starbucks is planning to open approximately 900 net new stores, two-thirds of which are expected to be licensed, with a cautious approach in the United Kingdom and Western Europe.
The company will provide additional details on its fiscal 2009 targets during its fiscal year-end conference call in November.
