Reply #21: Fewer latte runs sends Starbucks 2Q profit down 28 percent [View All]

[UpInArms]

http://news.yahoo.com/s/ap/20080501/ap_on_bi_ge/earns_starbucks

SEATTLE - Starbucks Corp. is dialing back expectations for its U.S. stores in light of economic uncertainty but has a three-year plan for snazzy new drinks and future profit growth fueled by aggressive international expansion.

As expected, the company said Wednesday its fiscal second-quarter profit sank 28 percent as U.S. consumers responded to rising food and gas prices by making fewer latte runs.

The coffee purveyor slashed 30 additional store openings from its already-scaled-back plan for 2008 and said it will open fewer than 400 stores per year in 2009 through 2011.

International openings will increase at a far faster clip, though, with 975 this year and a projected 1,300 in 2011. Starbucks expects to have 21,500 stores worldwide by the end of fiscal 2011.

Starbucks' financial goals for the coming years reflect worries about a protracted U.S. economic downturn and rely on international stores — particularly ones run by licensed partners rather than Starbucks itself — to drive profit.

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